Walmart reports a 4.6 percent increase for Q1 EPS of $1.14; U.S. businesses forecast positive comp sales for Q2
Wal-Mart Stores, Inc. (NYSE: WMT) today reported financial results for
the first quarter ended April 30, 2013.
Net sales for the first quarter were $113.4 billion, an increase of 1.0
percent over last year. Net sales last year benefited by 1.0 percent
from the extra day due to leap year. On a constant currency basis1,
net sales would have increased 1.8 percent to $114.2 billion. Membership
and other income increased 1.6 percent versus last year, due primarily
to an increase in membership income. Total revenue for the first quarter
was $114.2 billion, a 1.0 percent increase over last year.
Consolidated net income attributable to Walmart for the first quarter
was $3.8 billion, up 1.1 percent. Diluted earnings per share
attributable to Walmart (EPS) were $1.14, a 4.6 percent increase,
compared to $1.09 last year.
|
Solid earnings performance
|
"In a quarter marked by considerable headwinds to top line sales,
Walmart delivered solid EPS growth of 4.6 percent," said Mike Duke,
Wal-Mart Stores, Inc. president and chief executive officer. "Walmart's
mission is simple and focused -- to help people save money so they can
live better. When we simplify and focus our execution against this
mission, it's easy for our associates to prioritize what they have to do
to serve our customers.
"I'm confident about our long-term strategy and the direction Walmart is
headed," Duke added. "Our expectations about our U.S. businesses'
performance, coupled with more discipline in International, will allow
us to improve our performance throughout the year."
Duke also noted that e-commerce sales grew more than 30 percent in the
first quarter versus last year.
"There is no doubt that our company is making the right investments in
e-commerce to differentiate ourselves and become a better Walmart," said
Duke. "And with our sales growth in the first quarter, we believe our
investments are paying off."
The company's operating expense leverage was relatively flat for the
first quarter, but the commitment to leverage for the full year remains
a priority.
"We are proud that our U.S. segments leveraged operating expenses in the
first quarter, and we expect them to continue leveraging," said Duke.
"To operate in a difficult sales environment requires disciplined
expense and productivity management, the core of EDLC and EDLP. We are
committed to have the total company achieve expense leverage for the
year."
"Although we believe our company will leverage expenses for the year,
the second quarter will be challenging, given expense pressures in
International and our corporate area," said Charles Holley, executive
vice president and chief financial officer. "Expense leverage may not be
delivered evenly across the quarters, but we believe that by executing
our plans, we will continue to reduce expenses and improve productivity."
1 See additional information at the end of this
release regarding non-GAAP financial measures
"We deployed cash to grow our business and return value to
shareholders," said Holley. "Despite the multiple headwinds during the
quarter, we grew operating profits ahead of sales growth. Our balance
sheet is strong, and we continue to grow."
During the first quarter, the company repurchased approximately 30
million shares for $2.2 billion. In addition, the company paid $1.6
billion in dividends. As previously announced, the company increased its
dividend by 18 percent for fiscal 2014 to $1.88 per share.
Return on investment1 (ROI) for the trailing 12 months
ended April 30, 2013 was 17.8 percent, compared to 18.1 percent for the
prior trailing 12 months ended April 30, 2012. The decline was primarily
the result of acquisitions, along with an increase in fixed assets
within Walmart's base business.
Walmart ended the quarter with free cash flow1 of $1.9
billion, compared to $3.1 billion in the prior year. An increase in
income tax payments due primarily to changes in federal bonus
depreciation rules and an increase in capital expenditures contributed
to the free cash flow decline.
"Given current business and economic trends, including currency, we
expect second quarter EPS to be in the range of $1.22 to $1.27," said
Holley. "Investments in Global eCommerce initiatives were forecast to
have an incremental $0.09 impact for fiscal 2014, and this remains in
our guidance. We expect the Q2 impact to be in line with the $0.02 per
share we had in the first quarter. In addition to eCommerce initiatives,
expenses related to FCPA matters are expected to range from $65 to $70
million for the second quarter."
Last year, Walmart delivered $1.18 in EPS for the second quarter.
Net sales, including fuel, were as follows:
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
April 30,
|
|
|
(dollars in billions)
|
|
|
|
|
2013
|
|
|
2012
|
|
|
Percent
Change
|
|
Walmart U.S.
|
|
|
|
|
$
|
66.553
|
|
|
|
$
|
66.333
|
|
|
|
0.3
|
%
|
|
Walmart International
|
|
|
|
|
33.005
|
|
|
|
32.077
|
|
|
|
2.9
|
%
|
|
Sam’s Club
|
|
|
|
|
13.871
|
|
|
|
13.854
|
|
|
|
0.1
|
%
|
|
Consolidated
|
|
|
|
|
$
|
113.429
|
|
|
|
$
|
112.264
|
|
|
|
1.0
|
%
|
The following explanations provide additional context to the above table.
-
Last year's net sales included an extra day for leap year, which added
approximately 1.0 percent growth in the first quarter of last year.
-
On a constant currency basis,1 Walmart
International's net sales would have been $33.8 billion, an increase
of 5.4 percent over last year.
-
Net sales for Sam's Club, excluding fuel, were $12.2 billion, an
increase of 0.5 percent from last year.
1 See additional information at the end of this
release regarding non-GAAP financial measures.
-
Consolidated net sales, on a constant currency basis,1
would have increased 1.8 percent to $114.2 billion.
"On a constant currency basis,1 Walmart
International's first quarter sales were $33.8 billion, up 5.4 percent.
Our stores in the U.K., Africa, Mexico, Central America, Brazil, Chile,
Argentina, China and India delivered positive comp sales," said Doug
McMillon, Walmart International president and CEO. "Comps in Canada and
Japan declined. We grew our share2 in seven of our
eleven markets."
Segment operating income was as follows:
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
April 30,
|
|
|
(dollars in billions)
|
|
|
|
|
2013
|
|
|
2012
|
|
|
Percent
Change
|
|
|
Walmart U.S.
|
|
|
|
|
$
|
5.329
|
|
|
|
$
|
5.033
|
|
|
|
5.9
|
%
|
|
Walmart International
|
|
|
|
|
1.256
|
|
|
|
1.318
|
|
|
|
-4.7
|
%
|
|
Sam’s Club
|
|
|
|
|
0.525
|
|
|
|
0.489
|
|
|
|
7.4
|
%
|
|
Sam's Club (excluding fuel)
|
|
|
|
|
0.519
|
|
|
|
0.487
|
|
|
|
6.6
|
%
|
|
U.S. comparable store sales review and guidance
|
The company reported U.S. comparable store sales based on its 13-week
retail calendar for the periods ended April 26, 2013 and April 27, 2012
as follows:
|
|
|
|
|
|
Without Fuel
|
|
|
|
With Fuel
|
|
|
|
Fuel Impact
|
|
|
|
|
|
|
Thirteen Weeks Ended
|
|
|
|
Thirteen Weeks Ended
|
|
|
|
Thirteen Weeks Ended
|
|
|
|
|
|
|
4/26/2013
|
|
|
|
4/27/2012
|
|
|
|
4/26/2013
|
|
|
|
4/27/2012
|
|
|
|
4/26/2013
|
|
|
|
4/27/2012
|
|
Walmart U.S.
|
|
|
|
|
-1.4%
|
|
|
|
2.6%
|
|
|
|
-1.4%
|
|
|
|
2.6%
|
|
|
|
0.0%
|
|
|
|
0.0%
|
|
Sam’s Club
|
|
|
|
|
0.2%
|
|
|
|
5.3%
|
|
|
|
-0.2%
|
|
|
|
6.2%
|
|
|
|
-0.4%
|
|
|
|
0.9%
|
|
Total U.S.
|
|
|
|
|
-1.2%
|
|
|
|
3.0%
|
|
|
|
-1.2%
|
|
|
|
3.2%
|
|
|
|
0.0%
|
|
|
|
0.2%
|
During the 13-week period, the Walmart U.S. comp was negatively impacted
by a delay in tax refund checks, challenging weather conditions, less
grocery inflation than expected and the payroll tax increase. Comp
traffic was down 1.8 percent, while average ticket increased 0.4 percent.
"Despite comps being lower than expected, we continued to generate
market share gains," said Bill Simon, Walmart U.S. president and CEO.
"According to The Nielsen Company, we gained 20 basis points of market
share3 in the measured category of 'food, consumables
and health & wellness/OTC' during the 13-weeks ended Apr. 27, 2013."
For the 13-week period ending Jul. 26, Walmart U.S. expects comp store
sales to increase from flat to 2.0 percent. Last year, Walmart's comp
sales rose 2.2 percent for the comparable period.
1 See additional information at the end of this
release regarding non-GAAP financial measures.
2 Sources: Africa: Statistics South Africa, Argentina:
The Nielsen Company, Canada: The Nielsen Company, Central America: The
Nielsen Company, Chile: National Statistics Institute (INE), China:
National Bureau of Statistics of China (NBSC), Japan: Ministry of
Economy, Trade and Industry (METI).
3 Sources: The Nielsen Company, 13 weeks ended Apr.
27, 2013.
"The second quarter is off to a good start, with positive comps," Simon
said. "We continue to believe in the strength of our strategic plan to
deliver a broad assortment with EDLP. We also continue to monitor the
impact of the 2 percent payroll tax increase, along with other factors,
like fuel prices."
In the first quarter, Sam's Club comp traffic was up 1.3 percent, while
ticket was down 1.1 percent for the 13-week period ended Apr. 26.
"Comp sales for the first quarter were impacted by unfavorable weather
and less than expected inflation," said Rosalind Brewer, Sam's Club
president and CEO. "Our business member is an integral part of our
business, and comp sales and traffic patterns indicated that they
remained pressured in the first quarter. Small business optimism remains
at historically low levels, as businesses adapt to higher payroll taxes
and cautious consumers."
As of May 15, Sam's Club increased its membership fee to $45 nationwide
for both Advantage and Business base memberships, reflecting a $5 and
$10 increase, respectively. The fee for Plus membership remains $100.
This is Sam's Club's first fee increase since Jan. 2006.
"The combination of our strategies, including our membership fee
increase, positions us well for the second quarter, and we have a number
of events to drive sales," said Brewer. "Members will experience
exciting merchandise, heightened by local brands, all displayed with a
new level of visual excitement."
Sam's Club expects comp sales, excluding fuel, for the current 13-week
period ending Jul. 26, 2013, to increase from 1.0 to 3.0 percent. Last
year, for the 13-week period, comp sales, excluding fuel, increased 4.2
percent.
Walmart U.S. and Sam's Club will report comparable sales for the 13-week
period ending Jul. 26 on Aug. 15, when the company reports second
quarter results. For fiscal year 2014, Walmart will report comparable
store sales on a 53-week basis, with 4-5-5 week reporting for the fourth
quarter.
Wal-Mart Stores, Inc. (NYSE: WMT) helps people around the world save
money and live better -- anytime and anywhere -- in retail stores,
online, and through their mobile devices. Each week, more than 245
million customers and members visit our 10,857 stores under 69 banners
in 27 countries and e-commerce websites in 10 countries. With fiscal
year 2013 sales of approximately $466 billion, Walmart employs more than
2 million associates worldwide. Walmart continues to be a leader in
sustainability, corporate philanthropy and employment opportunity.
Additional information about Walmart can be found by visiting http://corporate.walmart.com,
and on Facebook at http://facebook.com/walmart
and on Twitter at http://twitter.com/walmart.
Online merchandise sales are available at http://www.walmart.com
and http://www.samsclub.com.
After this earnings release has been furnished to the Securities and
Exchange Commission (SEC), a pre-recorded call offering additional
comments on the quarter will be available to all investors. Please note:
Walmart has a new phone number for accessing the pre-recorded call. The
conference call can also be accessed via webcast by clicking here.
Callers within the U.S. and Canada may dial 877-523-5612 and enter
passcode 9256278. All other callers can access the call by dialing
201-689-8483 and entering passcode 9256278. Information included in this
release, including reconciliations, and the pre-recorded phone call are
available in the investor information area on the company's website at www.stock.walmart.com.
High resolution photos of Walmart's U.S., Sam's Club and International
operations are available for download at www.stock.walmart.com.
Forward Looking Statements
This release contains statements as to Wal-Mart Stores, Inc.
management's forecasts or estimates of the company's diluted earnings
per share from continuing operations attributable to Walmart for the
fiscal quarter ending Jul. 31, 2013 (and statements of certain
assumptions underlying such forecasts), of the incremental impact of the
company's investments in Global eCommerce initiatives on earnings per
share for the quarter ending Jul. 31, 2013 and the year ending January
31, 2014, of the comparable store sales of the Walmart U.S. segment of
the company and the comparable club sales, excluding fuel, of the Sam's
Club segment of the company for the 13-week period from April 27, 2013
through Jul. 26, 2013 and of the costs in the second quarter of fiscal
year 2014 associated with the FCPA and compliance matters and
management's expectations that Walmart will leverage expenses for the
year ending January 31, 2014, that the company's U.S. operations will
continue to leverage expenses and that the company will continue to
reduce expenses and improve productivity that the company believes are
"forward- looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, as amended. These statements
are intended to enjoy the protection of the safe harbor for
forward-looking statements provided by that act. Those statements can be
identified by the use of the word or phrase "expect," “expects,'
"forecast," "given," "guidance," “will be,” "will continue," and "will
leverage" in the statements or relating to such statements. These
forward-looking statements are subject to risks, uncertainties and other
factors, domestically and internationally, including: general economic
conditions; economic conditions affecting specific markets in which we
operate; competitive pressures; inflation and deflation; consumer
confidence, disposable income, credit availability, spending patterns
and debt levels; customer traffic in Walmart's stores and clubs, average
ticket size, the seasonality of Walmart's business and seasonal buying
patterns in the United States and other markets; geo-political
conditions and events; weather conditions and events and their effects;
catastrophic events and natural disasters and their effects on Walmart's
business; public health emergencies; civil unrest and disturbances and
terrorist attacks; commodity prices; the cost of goods Walmart sells;
transportation costs; the cost of diesel fuel, gasoline, natural gas and
electricity; the selling prices of gasoline; disruption of Walmart's
supply chain, including transport of goods from foreign suppliers; trade
restrictions; changes in tariff and freight rates; labor costs; the
availability of qualified labor pools in Walmart's markets; changes in
employment laws and regulations, the cost of healthcare and other
benefits; casualty and other insurance costs; accident-related costs;
the availability of investment opportunities relating to Walmart's
Global eCommerce initiatives, adoption of or changes in tax and other
laws and regulations that affect Walmart's business, including changes
in corporate tax rates; developments in, and the outcome of, legal and
regulatory proceedings to which Walmart is a party or is subject and the
costs associated therewith; currency exchange rate fluctuations; changes
in market interest rates; conditions and events affecting domestic and
global financial and capital markets; and other risks. The company
discusses certain of the factors described above more fully in certain
of its filings with the SEC, including its most recent annual report on
Form 10-K filed with the SEC (in which the company also discusses other
factors that may affect its operations, results of operations and
comparable store and club sales) and this release should be read in
conjunction with that annual report on Form 10-K, together with all of
the company's other filings, including its quarterly reports on Form
10-Q and current reports on Form 8-K, made with the SEC through the date
of this release. The company urges readers to consider all of these
risks, uncertainties and other factors carefully in evaluating the
forward-looking statements contained in this release. As a result of
these matters, changes in facts, assumptions not being realized or other
circumstances, the company's actual results may differ materially from
the expected results discussed in the forward-looking statements
contained in this release. The forward-looking statements contained in
this release are as of the date of this release, and Walmart undertakes
no obligation to update these forward-looking statements to reflect
subsequent events or circumstances.
|
|
|
Wal-Mart Stores, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
SUBJECT TO RECLASSIFICATION
|
|
|
|
|
April 30,
|
|
|
(Dollars in millions, except share data)
|
|
|
|
|
2013
|
|
|
|
2012
|
|
|
|
Percent
Change
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
|
$
|
113,429
|
|
|
|
|
$
|
112,264
|
|
|
|
|
1.0
|
%
|
|
Membership and other income
|
|
|
|
|
758
|
|
|
|
|
746
|
|
|
|
|
1.6
|
%
|
|
Total revenues
|
|
|
|
|
114,187
|
|
|
|
|
113,010
|
|
|
|
|
1.0
|
%
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
|
|
86,027
|
|
|
|
|
85,178
|
|
|
|
|
1.0
|
%
|
|
Operating, selling, general and administrative expenses
|
|
|
|
|
21,704
|
|
|
|
|
21,445
|
|
|
|
|
1.2
|
%
|
|
Operating income
|
|
|
|
|
6,456
|
|
|
|
|
6,387
|
|
|
|
|
1.1
|
%
|
|
Interest:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt
|
|
|
|
|
507
|
|
|
|
|
503
|
|
|
|
|
0.8
|
%
|
|
Capital leases
|
|
|
|
|
67
|
|
|
|
|
70
|
|
|
|
|
-4.3%
|
|
Interest income
|
|
|
|
|
(44
|
)
|
|
|
|
(38
|
)
|
|
|
|
15.8
|
%
|
|
Interest, net
|
|
|
|
|
530
|
|
|
|
|
535
|
|
|
|
|
-0.9%
|
|
Income before income taxes
|
|
|
|
|
5,926
|
|
|
|
|
5,852
|
|
|
|
|
1.3
|
%
|
|
Provision for income taxes
|
|
|
|
|
1,981
|
|
|
|
|
1,958
|
|
|
|
|
1.2
|
%
|
|
Consolidated net income
|
|
|
|
|
3,945
|
|
|
|
|
3,894
|
|
|
|
|
1.3
|
%
|
|
Less consolidated net income attributable to noncontrolling interest
|
|
|
|
|
(161
|
)
|
|
|
|
(152
|
)
|
|
|
|
5.9
|
%
|
|
Consolidated net income attributable to Walmart
|
|
|
|
|
$
|
3,784
|
|
|
|
|
$
|
3,742
|
|
|
|
|
1.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per common share attributable to Walmart
|
|
|
|
|
$
|
1.15
|
|
|
|
|
$
|
1.10
|
|
|
|
|
4.5
|
%
|
|
Diluted net income per common share attributable to Walmart
|
|
|
|
|
1.14
|
|
|
|
|
1.09
|
|
|
|
|
4.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
3,301
|
|
|
|
|
3,409
|
|
|
|
|
|
|
Diluted
|
|
|
|
|
3,318
|
|
|
|
|
3,425
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common share
|
|
|
|
|
$
|
1.88
|
|
|
|
|
$
|
1.59
|
|
|
|
|
|
|
|
|
Wal-Mart Stores, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUBJECT TO RECLASSIFICATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in millions)
|
|
|
|
|
April 30,
|
|
|
|
January 31,
|
|
|
|
April 30,
|
|
ASSETS
|
|
|
|
|
2013
|
|
|
|
2013
|
|
|
|
2012
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
$
|
8,855
|
|
|
|
|
$
|
7,781
|
|
|
|
|
$
|
8,117
|
|
|
Receivables, net
|
|
|
|
|
6,191
|
|
|
|
|
6,768
|
|
|
|
|
5,574
|
|
|
Inventories
|
|
|
|
|
43,138
|
|
|
|
|
43,803
|
|
|
|
|
41,284
|
|
|
Prepaid expenses and other
|
|
|
|
|
1,992
|
|
|
|
|
1,588
|
|
|
|
|
2,301
|
|
|
Total current assets
|
|
|
|
|
60,176
|
|
|
|
|
59,940
|
|
|
|
|
57,276
|
|
|
Property and equipment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment
|
|
|
|
|
167,087
|
|
|
|
|
165,825
|
|
|
|
|
158,329
|
|
|
Less accumulated depreciation
|
|
|
|
|
(53,395
|
)
|
|
|
|
(51,896
|
)
|
|
|
|
(47,600
|
)
|
|
Property and equipment, net
|
|
|
|
|
113,692
|
|
|
|
|
113,929
|
|
|
|
|
110,729
|
|
|
Property under capital leases:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property under capital leases
|
|
|
|
|
5,893
|
|
|
|
|
5,899
|
|
|
|
|
5,978
|
|
|
Less accumulated amortization
|
|
|
|
|
(3,154
|
)
|
|
|
|
(3,147
|
)
|
|
|
|
(3,235
|
)
|
|
Property under capital leases, net
|
|
|
|
|
2,739
|
|
|
|
|
2,752
|
|
|
|
|
2,743
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
|
|
19,734
|
|
|
|
|
20,497
|
|
|
|
|
21,003
|
|
|
Other assets and deferred charges
|
|
|
|
|
5,846
|
|
|
|
|
5,987
|
|
|
|
|
5,349
|
|
|
Total assets
|
|
|
|
|
$
|
202,187
|
|
|
|
|
$
|
203,105
|
|
|
|
|
$
|
197,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term borrowings
|
|
|
|
|
$
|
6,255
|
|
|
|
|
$
|
6,805
|
|
|
|
|
$
|
5,799
|
|
|
Accounts payable
|
|
|
|
|
36,770
|
|
|
|
|
38,080
|
|
|
|
|
37,068
|
|
|
Dividends payable
|
|
|
|
|
4,649
|
|
|
|
|
—
|
|
|
|
|
4,059
|
|
|
Accrued liabilities
|
|
|
|
|
17,282
|
|
|
|
|
18,808
|
|
|
|
|
16,661
|
|
|
Accrued income taxes
|
|
|
|
|
2,318
|
|
|
|
|
2,211
|
|
|
|
|
2,560
|
|
|
Long-term debt due within one year
|
|
|
|
|
5,967
|
|
|
|
|
5,587
|
|
|
|
|
2,509
|
|
|
Obligations under capital leases due within one year
|
|
|
|
|
311
|
|
|
|
|
327
|
|
|
|
|
322
|
|
|
Total current liabilities
|
|
|
|
|
73,552
|
|
|
|
|
71,818
|
|
|
|
|
68,978
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
|
41,536
|
|
|
|
|
38,394
|
|
|
|
|
42,956
|
|
|
Long-term obligations under capital leases
|
|
|
|
|
3,015
|
|
|
|
|
3,023
|
|
|
|
|
3,040
|
|
|
Deferred income taxes and other
|
|
|
|
|
7,694
|
|
|
|
|
7,613
|
|
|
|
|
7,735
|
|
|
Redeemable noncontrolling interest
|
|
|
|
|
549
|
|
|
|
|
519
|
|
|
|
|
456
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
|
|
329
|
|
|
|
|
332
|
|
|
|
|
339
|
|
|
Capital in excess of par value
|
|
|
|
|
3,399
|
|
|
|
|
3,620
|
|
|
|
|
3,625
|
|
|
Retained earnings
|
|
|
|
|
68,489
|
|
|
|
|
72,978
|
|
|
|
|
65,463
|
|
|
Accumulated other comprehensive income (loss)
|
|
|
|
|
(1,968
|
)
|
|
|
|
(587
|
)
|
|
|
|
(463
|
)
|
|
Total Walmart shareholders’ equity
|
|
|
|
|
70,249
|
|
|
|
|
76,343
|
|
|
|
|
68,964
|
|
|
Nonredeemable noncontrolling interest
|
|
|
|
|
5,592
|
|
|
|
|
5,395
|
|
|
|
|
4,971
|
|
|
Total equity
|
|
|
|
|
75,841
|
|
|
|
|
81,738
|
|
|
|
|
73,935
|
|
|
Total liabilities and equity
|
|
|
|
|
$
|
202,187
|
|
|
|
|
$
|
203,105
|
|
|
|
|
$
|
197,100
|
|
|
|
|
Wal-Mart Stores, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
SUBJECT TO RECLASSIFICATION
|
|
|
|
|
April 30,
|
|
(Dollars in millions)
|
|
|
|
|
2013
|
|
|
|
2012
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
Consolidated net income
|
|
|
|
|
$
|
3,945
|
|
|
|
|
$
|
3,894
|
|
|
Adjustments to reconcile consolidated net income to net cash
provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
2,194
|
|
|
|
|
2,106
|
|
|
Deferred income taxes
|
|
|
|
|
128
|
|
|
|
|
(149
|
)
|
|
Other operating activities
|
|
|
|
|
(370
|
)
|
|
|
|
(413
|
)
|
|
Changes in certain assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
Receivables, net
|
|
|
|
|
567
|
|
|
|
|
494
|
|
|
Inventories
|
|
|
|
|
584
|
|
|
|
|
(150
|
)
|
|
Accounts payable
|
|
|
|
|
(743
|
)
|
|
|
|
(21
|
)
|
|
Accrued liabilities
|
|
|
|
|
(1,527
|
)
|
|
|
|
(1,714
|
)
|
|
Accrued income taxes
|
|
|
|
|
116
|
|
|
|
|
1,387
|
|
|
Net cash provided by operating activities
|
|
|
|
|
4,894
|
|
|
|
|
5,434
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
Payments for property and equipment
|
|
|
|
|
(2,968
|
)
|
|
|
|
(2,375
|
)
|
|
Proceeds from the disposal of property and equipment
|
|
|
|
|
35
|
|
|
|
|
50
|
|
|
Other investing activities
|
|
|
|
|
(63
|
)
|
|
|
|
(111
|
)
|
|
Net cash used in investing activities
|
|
|
|
|
(2,996
|
)
|
|
|
|
(2,436
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
Net change in short-term borrowings
|
|
|
|
|
(551
|
)
|
|
|
|
1,763
|
|
|
Proceeds from issuance of long-term debt
|
|
|
|
|
4,977
|
|
|
|
|
5
|
|
|
Payments of long-term debt
|
|
|
|
|
(1,088
|
)
|
|
|
|
(545
|
)
|
|
Dividends paid
|
|
|
|
|
(1,549
|
)
|
|
|
|
(1,352
|
)
|
|
Purchase of Company stock
|
|
|
|
|
(2,246
|
)
|
|
|
|
(1,589
|
)
|
|
Other financing activities
|
|
|
|
|
(284
|
)
|
|
|
|
(89
|
)
|
|
Net cash used in financing activities
|
|
|
|
|
(741
|
)
|
|
|
|
(1,807
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rates on cash and cash equivalents
|
|
|
|
|
(83
|
)
|
|
|
|
376
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents
|
|
|
|
|
1,074
|
|
|
|
|
1,567
|
|
|
Cash and cash equivalents at beginning of year
|
|
|
|
|
7,781
|
|
|
|
|
6,550
|
|
|
Cash and cash equivalents at end of period
|
|
|
|
|
$
|
8,855
|
|
|
|
|
$
|
8,117
|
|
|
|
|
Wal-Mart Stores, Inc.
|
|
Reconciliations of and Other Information Regarding Non-GAAP
Financial Measures
|
|
(Unaudited)
|
|
(In millions, except per share data)
|
The following information provides reconciliations of certain non-GAAP
financial measures presented in the press release to which this
reconciliation is attached to the most directly comparable financial
measures calculated and presented in accordance with generally accepted
accounting principles ("GAAP"). The company has provided the non-GAAP
financial information presented in the press release, which is not
calculated or presented in accordance with GAAP, as information
supplemental and in addition to the financial measures presented in the
press release that are calculated and presented in accordance with GAAP.
Such non-GAAP financial measures should not be considered superior to,
as a substitute for, or as an alternative to, and should be considered
in conjunction with the GAAP financial measures presented in the press
release. The non-GAAP financial measures in the press release may differ
from similar measures used by other companies.
Calculation of Return on Investment and Return on Assets
Management believes return on investment ("ROI") is a meaningful metric
to share with investors because it helps investors assess how
effectively Walmart is deploying its assets. Trends in ROI can fluctuate
over time as management balances long-term potential strategic
initiatives with any possible short-term impacts.
ROI was 17.8 percent and 18.1 percent for the trailing twelve months
ended April 30, 2013 and 2012, respectively. The decline was primarily
the result of acquisitions, along with an increase in fixed assets
within our base business.
We define ROI as adjusted operating income (operating income plus
interest income, depreciation and amortization, and rent expense) for
the fiscal year divided by average invested capital during that period.
We consider average invested capital to be the average of our beginning
and ending total assets, plus accumulated depreciation and amortization
less accounts payable and accrued liabilities for that period, plus a
rent factor equal to the rent for the fiscal year multiplied by a factor
of eight. When we have discontinued operations, we exclude the impact of
the discontinued operations.
ROI is considered a non-GAAP financial measure under the SEC's rules. We
consider return on assets ("ROA") to be the financial measure computed
in accordance with GAAP that is the most directly comparable financial
measure to ROI as we calculate that financial measure. ROI differs from
ROA (which is consolidated net income for the period divided by average
total assets for the period) because ROI: adjusts operating income to
exclude certain expense items and adds interest income; adjusts total
assets for the impact of accumulated depreciation and amortization,
accounts payable and accrued liabilities; and incorporates a factor of
rent to arrive at total invested capital.
Although ROI is a standard financial metric, numerous methods exist for
calculating a company's ROI. As a result, the method used by Walmart's
management to calculate ROI may differ from the methods other companies
use to calculate their ROI. We urge you to understand the methods used
by other companies to calculate their ROI before comparing our ROI to
that of such other companies.
The calculation of ROI, along with a reconciliation to the calculation
of ROA, the most comparable GAAP financial measure, is as follows:
|
Wal-Mart Stores, Inc.
|
|
Return on Investment and Return on Assets
|
|
|
|
|
|
|
|
|
Trailing Twelve Months Ended
|
|
|
|
|
|
|
|
|
April 30,
|
|
(Dollars in millions)
|
|
|
|
|
|
|
2013
|
|
|
|
2012
|
|
CALCULATION OF RETURN ON INVESTMENT
|
|
|
|
Numerator
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
|
|
|
$
|
27,870
|
|
|
|
|
$
|
27,049
|
|
|
+ Interest income
|
|
|
|
|
|
|
193
|
|
|
|
|
157
|
|
|
+ Depreciation and amortization
|
|
|
|
|
|
|
8,589
|
|
|
|
|
8,251
|
|
|
+ Rent
|
|
|
|
|
|
|
2,631
|
|
|
|
|
2,515
|
|
|
Adjusted operating income
|
|
|
|
|
|
|
$
|
39,283
|
|
|
|
|
$
|
37,972
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator
|
|
|
|
|
|
|
|
|
|
|
|
|
Average total assets1 |
|
|
|
|
|
|
$
|
199,644
|
|
|
|
|
$
|
191,663
|
|
|
+ Average accumulated depreciation and amortization1 |
|
|
|
|
|
|
53,692
|
|
|
|
|
49,761
|
|
|
- Average accounts payable1 |
|
|
|
|
|
|
36,919
|
|
|
|
|
35,775
|
|
|
- Average accrued liabilities1 |
|
|
|
|
|
|
16,972
|
|
|
|
|
16,334
|
|
|
+ Rent x 8
|
|
|
|
|
|
|
21,048
|
|
|
|
|
20,120
|
|
|
Average invested capital
|
|
|
|
|
|
|
$
|
220,493
|
|
|
|
|
$
|
209,435
|
|
|
Return on investment (ROI)
|
|
|
|
|
|
|
17.8
|
%
|
|
|
|
18.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CALCULATION OF RETURN ON ASSETS
|
|
|
|
Numerator
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated net income
|
|
|
|
|
|
|
$
|
17,807
|
|
|
|
|
$
|
16,770
|
|
|
Denominator
|
|
|
|
|
|
|
|
|
|
|
|
|
Average total assets1 |
|
|
|
|
|
|
$
|
199,644
|
|
|
|
|
$
|
191,663
|
|
|
Return on assets (ROA)
|
|
|
|
|
|
|
8.9
|
%
|
|
|
|
8.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of April 30,
|
|
Certain Balance Sheet Data
|
|
|
|
|
2013
|
|
2012
|
|
|
|
2011
|
|
Total assets
|
|
|
|
|
$
|
202,187
|
|
|
$
|
197,100
|
|
|
|
|
$
|
186,225
|
|
|
Accumulated depreciation and amortization
|
|
|
|
|
56,549
|
|
|
50,835
|
|
|
|
|
48,686
|
|
|
Accounts payable
|
|
|
|
|
36,770
|
|
|
37,068
|
|
|
|
|
34,481
|
|
|
Accrued liabilities
|
|
|
|
|
17,282
|
|
|
16,661
|
|
|
|
|
16,006
|
|
1 The average is based on the addition of the account
balance at the end of the current period to the account balance at the
end of the prior period and dividing by 2.
Free Cash Flow
We define free cash flow as net cash provided by operating activities in
a period minus payments for property and equipment made in that period.
Free cash flow was $1.9 billion and $3.1 billion for the three months
ended April 30, 2013 and 2012, respectively. An increase in income tax
payments due primarily to changes in federal bonus depreciation rules
and an increase in capital expenditures contributed to the free cash
flow decline.
Free cash flow is considered a non-GAAP financial measure. Management
believes, however, that free cash flow, which measures our ability to
generate additional cash from our business operations, is an important
financial measure for use in evaluating the company's financial
performance. Free cash flow should be considered in addition to, rather
than as a substitute for consolidated net income as a measure of our
performance and net cash provided by operating activities as a measure
of our liquidity.
Additionally, Walmart's definition of free cash flow is limited, in that
it does not represent residual cash flows available for discretionary
expenditures due to the fact that the measure does not deduct the
payments required for debt service and other contractual obligations or
payments made for business acquisitions. Therefore, we believe it is
important to view free cash flow as a measure that provides supplemental
information to our condensed consolidated statements of cash flows.
Although other companies report their free cash flow, numerous methods
may exist for calculating a company's free cash flow. As a result, the
method used by our management to calculate our free cash flow may differ
from the methods other companies use to calculate their free cash flow.
We urge you to understand the methods used by other companies to
calculate their free cash flow before comparing our free cash flow to
that of such other companies.
The following table sets forth a reconciliation of free cash flow, a
non-GAAP financial measure, to net cash provided by operating
activities, which we believe to be the GAAP financial measure most
directly comparable to free cash flow, as well as information regarding
net cash used in investing activities and net cash used in financing
activities.
|
|
|
|
|
|
For the three months ended
|
|
|
|
|
|
|
April 30,
|
|
(Dollars in millions)
|
|
|
|
|
2013
|
|
|
|
2012
|
|
Net cash provided by operating activities
|
|
|
|
|
$
|
4,894
|
|
|
|
|
$
|
5,434
|
|
|
Payments for property and equipment
|
|
|
|
|
(2,968
|
)
|
|
|
|
(2,375
|
)
|
|
Free cash flow
|
|
|
|
|
$
|
1,926
|
|
|
|
|
$
|
3,059
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities1 |
|
|
|
|
$
|
(2,996
|
)
|
|
|
|
$
|
(2,436
|
)
|
|
Net cash used in financing activities
|
|
|
|
|
$
|
(741
|
)
|
|
|
|
$
|
(1,807
|
)
|
1 "Net cash used in investing activities" includes
payments for property and equipment, which is also included in our
computation of free cash flow.
Constant Currency
In discussing our operating results, the term currency exchange rates
refers to the currency exchange rates we use to convert the operating
results for all countries where the functional currency is not the U.S.
dollar. We calculate the effect of changes in currency exchange rates as
the difference between current period activity translated using the
current period's currency exchange rates, and the comparable prior year
period's currency exchange rates. Throughout our discussion, we refer to
the results of this calculation as the impact of currency exchange rate
fluctuations. When we refer to constant currency operating results, this
means operating results without the impact of the currency exchange rate
fluctuations and without the impact of acquisitions until the
acquisitions are included in both comparable periods. The disclosure of
constant currency amounts or results permits investors to understand
better Walmart's underlying performance without the effects of currency
exchange rate fluctuations or acquisitions.
The table below reflects the calculation of constant currency for net
sales and operating income for the three months ended April 30, 2013.
|
|
|
|
|
|
Three Months Ended
April 30, 2013
|
|
|
|
|
|
|
|
International
|
|
|
|
|
Consolidated
|
|
|
(Dollars in millions)
|
|
|
|
|
2013
|
|
|
Percent
Change
|
|
|
|
2013
|
|
|
Percent
Change
|
|
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported
|
|
|
|
|
$
|
33,005
|
|
|
|
2.9
|
%
|
|
|
|
$
|
113,429
|
|
|
|
1.0
|
%
|
|
Currency exchange rate fluctuations1 |
|
|
|
|
1,010
|
|
|
|
|
|
|
|
1,010
|
|
|
|
|
|
|
|
|
|
|
34,015
|
|
|
|
|
|
|
|
114,439
|
|
|
|
|
|
Net sales from acquisitions
|
|
|
|
|
(200
|
)
|
|
|
|
|
|
|
(200
|
)
|
|
|
|
|
Constant currency net sales
|
|
|
|
|
$
|
33,815
|
|
|
|
5.4
|
%
|
|
|
|
$
|
114,239
|
|
|
|
1.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported
|
|
|
|
|
$
|
1,256
|
|
|
|
-4.7%
|
|
|
|
$
|
6,456
|
|
|
|
1.1
|
%
|
|
Currency exchange rate fluctuations1 |
|
|
|
|
(7
|
)
|
|
|
|
|
|
|
(7
|
)
|
|
|
|
|
|
|
|
|
|
1,249
|
|
|
|
|
|
|
|
6,449
|
|
|
|
|
|
Operating loss from acquisitions
|
|
|
|
|
37
|
|
|
|
|
|
|
|
37
|
|
|
|
|
|
Constant currency operating income
|
|
|
|
|
$
|
1,286
|
|
|
|
-2.4%
|
|
|
|
$
|
6,486
|
|
|
|
1.6
|
%
|
1 Excludes currency exchange rate fluctuations related
to acquisitions until the acquisitions are included in both comparable
periods.
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