Wal-Mart Stores, Inc. (NYSE: WMT) today reported financial results for
the second quarter ended Jul. 31, 2013. Net sales were $116.2 billion,
an increase of 2.4 percent over last year. On a constant currency basis,1
net sales would have increased 2.8 percent to $116.7 billion. Membership
and other income decreased 4.3 percent versus last year. Total revenue
was $116.9 billion, an increase of $2.7 billion, or 2.3 percent over
last year.
Consolidated net income attributable to Walmart was $4.1 billion, up 1.3
percent. Diluted earnings per share attributable to Walmart (EPS) were
$1.24, a 5.1 percent increase, compared to $1.18 last year. EPS for the
quarter was impacted by approximately $0.01 due to a charge for a
certain non-income tax matter recorded in operating expenses within
Walmart International.
|
Solid earnings performance
|
"We delivered a solid increase in earnings per share for the second
quarter," said Mike Duke, Wal-Mart Stores, Inc. president and chief
executive officer. "Consolidated net sales and our Walmart U.S. comp
were below expectations. While the retail environment was challenging
across all of our markets, the Walmart U.S. and Sam's Club businesses
improved comp sales from the first quarter, and the growth of
International sales was consistent.
"I'm encouraged by our position to execute in the second half of the
year, particularly with the steps we're taking to improve performance,"
said Duke. "There are areas of our business where we can do a better
job, and we will. I'm confident in our associates' abilities to deliver
for our customers with EDLP and for shareholders with improved expense
savings."
The company did not leverage operating expenses during the second
quarter, due to softer than expected sales and higher investment in key
areas.
"We are pleased that our U.S. segments leveraged expenses for the first
half," said Duke. "While it will be difficult, we believe the steps
we're taking to control costs, especially in International, will bring
us closer to our full-year leverage goal. We will continue to invest in
leverage initiatives, compliance and e-commerce as we focus on future
growth."
"We were pleased with our Q2 growth in earnings per share, especially in
light of the current retail environment," said Charles Holley, executive
vice president and chief financial officer. "The company generated solid
cash flows from operations, and we continue to deliver strong consistent
returns to shareholders."
During the second quarter, the company repurchased approximately 24
million shares for $1.9 billion. In addition, the company paid $1.5
billion in dividends.
Return on investment1 (ROI) for the trailing 12-months
ended Jul. 31, 2013 was 17.9 percent, compared to 18.1 percent for the
prior trailing 12-months ended Jul. 31, 2012. The decline was primarily
the result of acquisitions, along with an increase in fixed assets
within Walmart's base business.
Free cash flow1 was $5.2 billion for the six months
ended Jul. 31, 2013, compared to $6.1 billion in the prior year. The
timing of the tax payments and growth of capital expenditures were the
primary drivers of the decline.
1 See additional information at the end of this
release regarding non-GAAP financial measures.
"The retail environment remains challenging in the U.S. and our
international markets, as customers are cautious in their spending. Net
sales in the first six months were below our expectations, so we are
updating our forecast for net sales to grow between 2 and 3 percent for
the full year versus our previous range of 5 to 6 percent," said Holley.
"This revision reflects our view of current global business trends, and
significant ongoing headwinds from anticipated currency exchange rate
fluctuations."
"Diluted earnings per share for the third quarter of fiscal year 2014
are expected to range between $1.11 and $1.16. This compares to $1.08
per share last year," said Holley. "For the full year, we are updating
our EPS guidance to range between $5.10 and $5.30 per share. This
compares to our previous range of $5.20 to $5.40. This guidance takes
into account the challenging sales and operating environment. As we've
seen in the past, discrete tax items have had a meaningful impact on our
effective tax rate and reported results in the back half of our fiscal
years. We anticipate that a wider range of between 31 and 33 percent is
now possible for our full year effective tax rate, versus our previous
range of 32 to 33 percent. In addition, we believe expenses for FCPA
matters and compliance programs will be between $75 and $80 million for
both the third and fourth quarters."
Net sales, including fuel, were as follows:
|
|
|
|
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
July 31,
|
|
|
|
July 31,
|
|
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(dollars in billions)
|
|
|
|
2013
|
|
|
2012
|
|
|
Percent
Change
|
|
|
2013
|
|
|
2012
|
|
|
Percent
Change
|
|
Walmart U.S.
|
|
|
|
$
|
68.728
|
|
|
|
$
|
67.343
|
|
|
|
2.1
|
%
|
|
|
$
|
135.281
|
|
|
|
$
|
133.676
|
|
|
|
1.2
|
%
|
|
Walmart International
|
|
|
|
32.956
|
|
|
|
32.016
|
|
|
|
2.9
|
%
|
|
|
65.961
|
|
|
|
64.093
|
|
|
|
2.9
|
%
|
|
Sam’s Club
|
|
|
|
14.532
|
|
|
|
14.161
|
|
|
|
2.6
|
%
|
|
|
28.403
|
|
|
|
28.015
|
|
|
|
1.4
|
%
|
|
Consolidated
|
|
|
|
$
|
116.216
|
|
|
|
$
|
113.520
|
|
|
|
2.4
|
%
|
|
|
$
|
229.645
|
|
|
|
$
|
225.784
|
|
|
|
1.7
|
%
|
The following explanations provide additional context to the above table.
-
On a constant currency basis,1 Walmart
International's net sales would have been $33.4 billion, an increase
of 4.4 percent over last year.
-
Net sales for Sam's Club, excluding fuel,1 were
$12.8 billion, an increase of 2.4 percent from last year.
-
Consolidated net sales, on a constant currency basis,1
would have increased 2.8 percent to $116.7 billion.
"Across our International markets, growth in consumer spending is under
pressure," said Doug McMillon, Walmart International president and CEO.
"Consumers in both mature and emerging markets curbed their spending
during the second quarter, and this led to softer than expected sales.
While this creates a challenging sales environment, we are the best
equipped retailer to address the needs of our customers and help them
save money.
"We expect the third and fourth quarters to be better than our results
in the first half, and we are working hard to deliver operating expense
leverage for Walmart International," added McMillon.
1 See additional information at the end of this
release regarding non-GAAP financial measures.
Segment operating income was as follows:
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Three Months Ended
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Six Months Ended
|
|
|
|
|
|
|
|
July 31,
|
|
|
|
|
July 31,
|
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|
(dollars in billions)
|
|
|
|
2013
|
|
|
2012
|
|
|
Percent
Change
|
|
|
|
|
2013
|
|
|
2012
|
|
|
Percent
Change
|
|
|
|
Walmart U.S.
|
|
|
|
$
|
5.521
|
|
|
|
$
|
5.248
|
|
|
|
5.2
|
%
|
|
|
|
$
|
10.850
|
|
|
|
$
|
10.281
|
|
|
|
5.5
|
%
|
|
|
Walmart International
|
|
|
|
1.465
|
|
|
|
1.484
|
|
|
|
-1.3
|
%
|
|
|
|
2.721
|
|
|
|
2.802
|
|
|
|
-2.9
|
%
|
|
|
Sam’s Club
|
|
|
|
0.551
|
|
|
|
0.535
|
|
|
|
3.0
|
%
|
|
|
|
1.076
|
|
|
|
1.024
|
|
|
|
5.1
|
%
|
|
|
Sam's Club (excluding fuel)
|
|
|
|
0.552
|
|
|
|
0.511
|
|
|
|
8.0
|
%
|
|
|
|
1.071
|
|
|
|
0.998
|
|
|
|
7.3
|
%
|
|
|
U.S. comparable store sales review and guidance
|
The company reported U.S. comparable store sales based on its 13-week
and 26-week retail calendar for the periods ended Jul. 26, 2013 and Jul.
27, 2012 as follows:
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|
|
Without Fuel
|
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With Fuel
|
|
|
Fuel Impact
|
|
|
|
|
|
Thirteen Weeks Ended
|
|
|
Thirteen Weeks Ended
|
|
|
Thirteen Weeks Ended
|
|
|
|
|
|
7/26/2013
|
|
|
|
7/27/2012
|
|
|
|
7/26/2013
|
|
|
|
7/27/2012
|
|
|
|
7/26/2013
|
|
|
|
7/27/2012
|
|
|
Walmart U.S.
|
|
|
|
-0.3
|
%
|
|
|
2.2
|
%
|
|
|
-0.3
|
%
|
|
|
2.2
|
%
|
|
|
0.0
|
%
|
|
|
0.0
|
%
|
|
Sam’s Club
|
|
|
|
1.7
|
%
|
|
|
4.2
|
%
|
|
|
1.7
|
%
|
|
|
3.4
|
%
|
|
|
0.0
|
%
|
|
|
-0.8
|
%
|
|
Total U.S.
|
|
|
|
0.0
|
%
|
|
|
2.5
|
%
|
|
|
0.1
|
%
|
|
|
2.4
|
%
|
|
|
0.1
|
%
|
|
|
-0.1
|
%
|
|
|
|
|
|
Without Fuel
|
|
|
With Fuel
|
|
|
Fuel Impact
|
|
|
|
|
|
Twenty-Six Weeks Ended
|
|
|
Twenty-Six Weeks Ended
|
|
|
Twenty-Six Weeks Ended
|
|
|
|
|
|
7/26/2013
|
|
|
|
7/27/2012
|
|
|
|
7/26/2013
|
|
|
|
7/27/2012
|
|
|
|
7/26/2013
|
|
|
|
7/27/2012
|
|
|
Walmart U.S.
|
|
|
|
-0.8
|
%
|
|
|
2.4
|
%
|
|
|
-0.8
|
%
|
|
|
2.4
|
%
|
|
|
0.0
|
%
|
|
|
0.0
|
%
|
|
Sam’s Club
|
|
|
|
0.9
|
%
|
|
|
4.7
|
%
|
|
|
0.8
|
%
|
|
|
4.8
|
%
|
|
|
-0.1
|
%
|
|
|
0.1
|
%
|
|
Total U.S.
|
|
|
|
-0.6
|
%
|
|
|
2.8
|
%
|
|
|
-0.6
|
%
|
|
|
2.8
|
%
|
|
|
0.0
|
%
|
|
|
0.0
|
%
|
During the 13-week period, the Walmart U.S. comp was negatively impacted
by lower consumer spending due to the payroll tax increase and lower
inflation than expected. Comp traffic decreased 0.5 percent, while
average ticket increased 0.2 percent.
"While I'm disappointed in our comp sales decline, I'm encouraged by the
improvement in traffic and comp sales as we progressed through the
quarter. The 2 percent payroll tax increase continues to impact our
customer," said Bill Simon, Walmart U.S. president and CEO.
"Furthermore, we also expected an increase in the level of grocery
inflation, which did not materialize in a meaningful way. We were
pleased that both home and apparel had positive comps.
"We also continued to gain market share across several categories.
According to The Nielsen Company, we gained 14 basis points of market
share in the measured category of 'food, consumables and health &
wellness/OTC' during the 13-weeks ending July 20," added Simon.
For the 13-week period ending Oct. 25, Walmart U.S. expects comp store
sales to be relatively flat. Last year, Walmart's comp sales rose 1.5
percent for the comparable period.
"We continue to execute on initiatives to drive our business," said
Simon. "Our strategy is sound, our pricing position is solid and our
ability to leverage operating expenses is strong."
In the second quarter, Sam's Club comp traffic was up 2.7 percent, while
ticket was down 1.0 percent.
"Sam's Club generated a comp of 1.7 percent, without fuel,1
for the 13-week period," said Rosalind Brewer, Sam's Club president and
CEO. "Sales were up, traffic continued to improve, and comp sales were
within our guidance. Response to our recent membership enhancements has
been favorable, resulting in solid membership income growth and positive
response to our Instant Savings Book. We were pleased with our
improvement in business member traffic, reversing the decrease from the
prior quarter."
Sam's Club expects comp sales, excluding fuel,1 for
the current 13-week period ending Oct. 25, to range between flat and 2
percent. Last year for the 13-week period, comp sales, excluding fuel,1
increased 2.7 percent.
"The core business at Sam's Club is strong," added Brewer. "I'm
confident that the steps we are executing today to strengthen our value
proposition will benefit Sam's over the long term."
Walmart U.S. and Sam's Club will report comparable sales for the 13-week
period ending Oct. 25 on Nov. 14, when the company reports third 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 10,955 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,
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. Information
included in this release, including reconciliations, and the
pre-recorded phone call can be accessed via webcast by visiting the
investor information area on the company's website at www.stock.walmart.com,
or 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.
High resolution photos of Walmart's U.S., Sam's Club and International
operations are available for download at www.stock.walmart.com.
1 See additional information at the end of this
release regarding non-GAAP financial measures.
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 attributable to Walmart for the fiscal quarter ending Oct. 31,
2013 and for the fiscal year to end Jan. 31, 2014, of the consolidated
net sales growth of the company for the fiscal year to end Jan. 31,
2014, and 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 Jul. 27, 2013
through Oct. 25, 2013 (and statements of certain assumptions underlying
certain of such forecasts), management's expectation that it is possible
for the company's effective tax rate for all of the fiscal year to end
Jan. 31, 2014 to be within a certain range, management's expectations
regarding the costs to be incurred in each of the third and fourth
quarters of the fiscal year to end Jan. 31, 2014 associated with the
FCPA matters and compliance programs, and management's expectations that
the company will continue to invest in leverage initiatives, compliance
and e-commerce, that the steps being taken by the company will bring the
company closer to its goal of leveraging expenses for the full fiscal
year to end Jan. 31, 2014 and that the third and fourth quarter results
of the Walmart International segment will be better than the results of
the Walmart International segment for the first half of the fiscal year
to end Jan. 31, 2014, 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 "are expected," "are updating," "anticipate,"
"expect," "expects," "forecast," "guidance," "will be," "will bring,"
and "will continue" 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; business trends in the company's markets; economic
conditions affecting specific markets in which we operate; competitive
pressures; the amount of inflation or deflation that occurs, both
generally and in certain product categories; 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; the requirements for expenditures in
connection with the FCPA matters and compliance programs; currency
exchange rate fluctuations; changes in market interest rates; conditions
and events affecting domestic and global financial and capital markets;
and other risks. Management's expectation regarding the company's
effective tax rate for the fiscal year to end Jan. 31, 2013 discussed
above is subject to management's expectation the company's effective tax
rate may fluctuate and be impacted by a number of factors, including
changes in the company's assessment of certain tax contingencies,
valuation allowances, tax law changes, audit results, discrete items and
the mix of earnings among the company's U.S. and International
operations. 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
|
|
|
|
Six Months Ended
|
|
|
SUBJECT TO RECLASSIFICATION
|
|
|
|
July 31,
|
|
|
|
July 31,
|
|
|
(Dollars in millions, except share data)
|
|
|
|
2013
|
|
|
|
2012
|
|
|
|
Percent
Change
|
|
|
2013
|
|
|
2012
|
|
|
Percent
Change
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
$
|
116,216
|
|
|
|
|
$
|
113,520
|
|
|
|
|
2.4
|
%
|
|
|
$
|
229,645
|
|
|
|
$
|
225,784
|
|
|
|
1.7
|
%
|
|
Membership and other income
|
|
|
|
729
|
|
|
|
|
762
|
|
|
|
|
(4.3
|
)%
|
|
|
1,487
|
|
|
|
1,508
|
|
|
|
(1.4
|
)%
|
|
Total revenues
|
|
|
|
116,945
|
|
|
|
|
114,282
|
|
|
|
|
2.3
|
%
|
|
|
231,132
|
|
|
|
227,292
|
|
|
|
1.7
|
%
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
|
87,455
|
|
|
|
|
85,643
|
|
|
|
|
2.1
|
%
|
|
|
173,482
|
|
|
|
170,821
|
|
|
|
1.6
|
%
|
|
Operating, selling, general and administrative expenses
|
|
|
|
22,697
|
|
|
|
|
21,941
|
|
|
|
|
3.4
|
%
|
|
|
44,401
|
|
|
|
43,386
|
|
|
|
2.3
|
%
|
|
Operating income
|
|
|
|
6,793
|
|
|
|
|
6,698
|
|
|
|
|
1.4
|
%
|
|
|
13,249
|
|
|
|
13,085
|
|
|
|
1.3
|
%
|
|
Interest:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt
|
|
|
|
522
|
|
|
|
|
487
|
|
|
|
|
7.2
|
%
|
|
|
1,029
|
|
|
|
990
|
|
|
|
3.9
|
%
|
|
Capital leases
|
|
|
|
67
|
|
|
|
|
68
|
|
|
|
|
(1.5
|
)%
|
|
|
134
|
|
|
|
138
|
|
|
|
(2.9
|
)%
|
|
Interest income
|
|
|
|
(36
|
)
|
|
|
|
(50
|
)
|
|
|
|
(28.0
|
)%
|
|
|
(80
|
)
|
|
|
(88
|
)
|
|
|
(9.1
|
)%
|
|
Interest, net
|
|
|
|
553
|
|
|
|
|
505
|
|
|
|
|
9.5
|
%
|
|
|
1,083
|
|
|
|
1,040
|
|
|
|
4.1
|
%
|
|
Income before income taxes
|
|
|
|
6,240
|
|
|
|
|
6,193
|
|
|
|
|
0.8
|
%
|
|
|
12,166
|
|
|
|
12,045
|
|
|
|
1.0
|
%
|
|
Provision for income taxes
|
|
|
|
2,025
|
|
|
|
|
2,032
|
|
|
|
|
(0.3
|
)%
|
|
|
4,006
|
|
|
|
3,990
|
|
|
|
0.4
|
%
|
|
Consolidated net income
|
|
|
|
4,215
|
|
|
|
|
4,161
|
|
|
|
|
1.3
|
%
|
|
|
8,160
|
|
|
|
8,055
|
|
|
|
1.3
|
%
|
|
Less consolidated net income attributable to noncontrolling interest
|
|
|
|
(146
|
)
|
|
|
|
(145
|
)
|
|
|
|
0.7
|
%
|
|
|
(307
|
)
|
|
|
(297
|
)
|
|
|
3.4
|
%
|
|
Consolidated net income attributable to Walmart
|
|
|
|
$
|
4,069
|
|
|
|
|
$
|
4,016
|
|
|
|
|
1.3
|
%
|
|
|
$
|
7,853
|
|
|
|
$
|
7,758
|
|
|
|
1.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per common share attributable to Walmart
|
|
|
|
$
|
1.24
|
|
|
|
|
$
|
1.19
|
|
|
|
|
4.2
|
%
|
|
|
$
|
2.39
|
|
|
|
$
|
2.28
|
|
|
|
4.8
|
%
|
|
Diluted net income per common share attributable to Walmart
|
|
|
|
1.24
|
|
|
|
|
1.18
|
|
|
|
|
5.1
|
%
|
|
|
2.38
|
|
|
|
2.27
|
|
|
|
4.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
3,278
|
|
|
|
|
3,384
|
|
|
|
|
|
|
|
3,290
|
|
|
|
3,396
|
|
|
|
|
|
Diluted
|
|
|
|
3,291
|
|
|
|
|
3,398
|
|
|
|
|
|
|
|
3,305
|
|
|
|
3,411
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common share
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
$
|
1.88
|
|
|
|
$
|
1.59
|
|
|
|
|
|
Wal-Mart Stores, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUBJECT TO RECLASSIFICATION
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in millions)
|
|
|
|
July 31,
|
|
|
January 31,
|
|
|
July 31,
|
|
ASSETS
|
|
|
|
2013
|
|
|
2013
|
|
|
2012
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
9,016
|
|
|
|
$
|
7,781
|
|
|
|
$
|
7,935
|
|
|
Receivables, net
|
|
|
|
5,996
|
|
|
|
6,768
|
|
|
|
5,365
|
|
|
Inventories
|
|
|
|
42,793
|
|
|
|
43,803
|
|
|
|
40,558
|
|
|
Prepaid expenses and other
|
|
|
|
2,197
|
|
|
|
1,588
|
|
|
|
2,401
|
|
|
Total current assets
|
|
|
|
60,002
|
|
|
|
59,940
|
|
|
|
56,259
|
|
|
Property and equipment:
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment
|
|
|
|
168,086
|
|
|
|
165,825
|
|
|
|
159,919
|
|
|
Less accumulated depreciation
|
|
|
|
(54,724
|
)
|
|
|
(51,896
|
)
|
|
|
(48,961
|
)
|
|
Property and equipment, net
|
|
|
|
113,362
|
|
|
|
113,929
|
|
|
|
110,958
|
|
|
Property under capital leases:
|
|
|
|
|
|
|
|
|
|
|
|
Property under capital leases
|
|
|
|
5,763
|
|
|
|
5,899
|
|
|
|
5,859
|
|
|
Less accumulated amortization
|
|
|
|
(3,131
|
)
|
|
|
(3,147
|
)
|
|
|
(3,170
|
)
|
|
Property under capital leases, net
|
|
|
|
2,632
|
|
|
|
2,752
|
|
|
|
2,689
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
|
19,280
|
|
|
|
20,497
|
|
|
|
20,081
|
|
|
Other assets and deferred charges
|
|
|
|
5,693
|
|
|
|
5,987
|
|
|
|
5,674
|
|
|
Total assets
|
|
|
|
$
|
200,969
|
|
|
|
$
|
203,105
|
|
|
|
$
|
195,661
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Short-term borrowings
|
|
|
|
$
|
8,639
|
|
|
|
$
|
6,805
|
|
|
|
$
|
6,091
|
|
|
Accounts payable
|
|
|
|
36,701
|
|
|
|
38,080
|
|
|
|
36,067
|
|
|
Dividends payable
|
|
|
|
3,141
|
|
|
|
—
|
|
|
|
2,717
|
|
|
Accrued liabilities
|
|
|
|
18,616
|
|
|
|
18,808
|
|
|
|
17,777
|
|
|
Accrued income taxes
|
|
|
|
116
|
|
|
|
2,211
|
|
|
|
1,308
|
|
|
Long-term debt due within one year
|
|
|
|
4,692
|
|
|
|
5,587
|
|
|
|
4,029
|
|
|
Obligations under capital leases due within one year
|
|
|
|
309
|
|
|
|
327
|
|
|
|
326
|
|
|
Total current liabilities
|
|
|
|
72,214
|
|
|
|
71,818
|
|
|
|
68,315
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
40,678
|
|
|
|
38,394
|
|
|
|
41,202
|
|
|
Long-term obligations under capital leases
|
|
|
|
2,907
|
|
|
|
3,023
|
|
|
|
2,975
|
|
|
Deferred income taxes and other
|
|
|
|
7,989
|
|
|
|
7,613
|
|
|
|
8,028
|
|
|
Redeemable noncontrolling interest
|
|
|
|
495
|
|
|
|
519
|
|
|
|
440
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
|
327
|
|
|
|
332
|
|
|
|
338
|
|
|
Capital in excess of par value
|
|
|
|
3,432
|
|
|
|
3,620
|
|
|
|
3,739
|
|
|
Retained earnings
|
|
|
|
70,791
|
|
|
|
72,978
|
|
|
|
67,732
|
|
|
Accumulated other comprehensive income (loss)
|
|
|
|
(2,889
|
)
|
|
|
(587
|
)
|
|
|
(1,531
|
)
|
|
Total Walmart shareholders’ equity
|
|
|
|
71,661
|
|
|
|
76,343
|
|
|
|
70,278
|
|
|
Nonredeemable noncontrolling interest
|
|
|
|
5,025
|
|
|
|
5,395
|
|
|
|
4,423
|
|
|
Total equity
|
|
|
|
76,686
|
|
|
|
81,738
|
|
|
|
74,701
|
|
|
Total liabilities and equity
|
|
|
|
$
|
200,969
|
|
|
|
$
|
203,105
|
|
|
|
$
|
195,661
|
|
|
Wal-Mart Stores, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
SUBJECT TO RECLASSIFICATION
|
|
|
|
|
July 31,
|
|
(Dollars in millions)
|
|
|
|
|
2013
|
|
|
|
2012
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
Consolidated net income
|
|
|
|
|
$
|
8,160
|
|
|
|
|
$
|
8,055
|
|
|
Adjustments to reconcile consolidated net income to net cash
provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
4,417
|
|
|
|
|
4,233
|
|
|
Deferred income taxes
|
|
|
|
|
475
|
|
|
|
|
(159
|
)
|
|
Other operating activities
|
|
|
|
|
(204
|
)
|
|
|
|
(404
|
)
|
|
Changes in certain assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
Receivables, net
|
|
|
|
|
445
|
|
|
|
|
628
|
|
|
Inventories
|
|
|
|
|
569
|
|
|
|
|
237
|
|
|
Accounts payable
|
|
|
|
|
(324
|
)
|
|
|
|
(685
|
)
|
|
Accrued liabilities
|
|
|
|
|
(209
|
)
|
|
|
|
(456
|
)
|
|
Accrued income taxes
|
|
|
|
|
(2,078
|
)
|
|
|
|
146
|
|
|
Net cash provided by operating activities
|
|
|
|
|
11,251
|
|
|
|
|
11,595
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
Payments for property and equipment
|
|
|
|
|
(6,066
|
)
|
|
|
|
(5,522
|
)
|
|
Proceeds from the disposal of property and equipment
|
|
|
|
|
112
|
|
|
|
|
158
|
|
|
Other investing activities
|
|
|
|
|
158
|
|
|
|
|
(334
|
)
|
|
Net cash used in investing activities
|
|
|
|
|
(5,796
|
)
|
|
|
|
(5,698
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
Net change in short-term borrowings
|
|
|
|
|
1,869
|
|
|
|
|
2,061
|
|
|
Proceeds from issuance of long-term debt
|
|
|
|
|
5,326
|
|
|
|
|
150
|
|
|
Payments of long-term debt
|
|
|
|
|
(3,386
|
)
|
|
|
|
(589
|
)
|
|
Dividends paid
|
|
|
|
|
(3,092
|
)
|
|
|
|
(2,698
|
)
|
|
Purchase of Company stock
|
|
|
|
|
(4,096
|
)
|
|
|
|
(3,429
|
)
|
|
Other financing activities
|
|
|
|
|
(738
|
)
|
|
|
|
(273
|
)
|
|
Net cash used in financing activities
|
|
|
|
|
(4,117
|
)
|
|
|
|
(4,778
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rates on cash and cash equivalents
|
|
|
|
|
(103
|
)
|
|
|
|
266
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents
|
|
|
|
|
1,235
|
|
|
|
|
1,385
|
|
|
Cash and cash equivalents at beginning of year
|
|
|
|
|
7,781
|
|
|
|
|
6,550
|
|
|
Cash and cash equivalents at end of period
|
|
|
|
|
$
|
9,016
|
|
|
|
|
$
|
7,935
|
|
|
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 17.9 percent and 18.1 percent for the trailing twelve months
ended July 31, 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.
Our calculation of ROI is considered a non-GAAP financial measure under
the SEC's rules because we calculate ROI using financial measures that
exclude and include amounts that are included and excluded in the most
directly comparable GAAP financial measure. Our calculation of ROI also
incorporates a factor of eight for rent expense that estimates the
hypothetical capitalization of our operating leases. 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
|
|
|
|
|
|
|
|
July 31,
|
|
(Dollars in millions)
|
|
|
|
|
|
2013
|
|
|
2012
|
|
CALCULATION OF RETURN ON INVESTMENT
|
|
Numerator
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
|
|
$
|
27,965
|
|
|
|
$
|
27,364
|
|
|
+ Interest income
|
|
|
|
|
|
179
|
|
|
|
185
|
|
|
+ Depreciation and amortization
|
|
|
|
|
|
8,685
|
|
|
|
8,336
|
|
|
+ Rent
|
|
|
|
|
|
2,664
|
|
|
|
2,570
|
|
|
Adjusted operating income
|
|
|
|
|
|
$
|
39,493
|
|
|
|
$
|
38,455
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator
|
|
|
|
|
|
|
|
|
|
|
Average total assets1 |
|
|
|
|
|
$
|
198,315
|
|
|
|
$
|
194,767
|
|
|
+ Average accumulated depreciation and amortization1 |
|
|
|
|
|
54,993
|
|
|
|
50,314
|
|
|
- Average accounts payable1 |
|
|
|
|
|
36,384
|
|
|
|
35,492
|
|
|
- Average accrued liabilities1 |
|
|
|
|
|
18,197
|
|
|
|
17,810
|
|
|
+ Rent x 8
|
|
|
|
|
|
21,312
|
|
|
|
20,560
|
|
|
Average invested capital
|
|
|
|
|
|
$
|
220,039
|
|
|
|
$
|
212,339
|
|
|
Return on investment (ROI)
|
|
|
|
|
|
17.9
|
%
|
|
|
18.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
CALCULATION OF RETURN ON ASSETS
|
|
Numerator
|
|
|
|
|
|
|
|
|
|
|
Consolidated net income
|
|
|
|
|
|
$
|
17,861
|
|
|
|
$
|
16,994
|
|
|
Denominator
|
|
|
|
|
|
|
|
|
|
|
Average total assets1 |
|
|
|
|
|
$
|
198,315
|
|
|
|
$
|
194,767
|
|
|
Return on assets (ROA)
|
|
|
|
|
|
9.0
|
%
|
|
|
8.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of July 31,
|
|
Certain Balance Sheet Data
|
|
|
|
2013
|
|
2012
|
|
|
2011
|
|
Total assets
|
|
|
|
$
|
200,969
|
|
|
$
|
195,661
|
|
|
|
$
|
193,872
|
|
|
Accumulated depreciation and amortization
|
|
|
|
57,855
|
|
|
52,131
|
|
|
|
48,497
|
|
|
Accounts payable
|
|
|
|
36,701
|
|
|
36,067
|
|
|
|
34,917
|
|
|
Accrued liabilities
|
|
|
|
18,616
|
|
|
17,777
|
|
|
|
17,843
|
|
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 $5.2 billion and $6.1 billion for the six months
ended July 31, 2013 and 2012, respectively. The timing of the tax
payments and growth of capital expenditures were the primary drivers of
the 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.
|
|
|
|
|
Six Months Ended
|
|
|
|
|
|
July 31,
|
|
(Dollars in millions)
|
|
|
|
2013
|
|
|
2012
|
|
Net cash provided by operating activities
|
|
|
|
$
|
11,251
|
|
|
|
$
|
11,595
|
|
|
Payments for property and equipment
|
|
|
|
(6,066
|
)
|
|
|
(5,522
|
)
|
|
Free cash flow
|
|
|
|
$
|
5,185
|
|
|
|
$
|
6,073
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities1 |
|
|
|
$
|
(5,796
|
)
|
|
|
$
|
(5,698
|
)
|
|
Net cash used in financing activities
|
|
|
|
$
|
(4,117
|
)
|
|
|
$
|
(4,778
|
)
|
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 and six months ended July 31,
2013.
|
|
|
|
|
|
Three Months Ended
July 31, 2013
|
|
|
|
|
Six Months Ended
July 31, 2013
|
|
|
|
|
|
|
|
International
|
|
|
|
|
Consolidated
|
|
|
|
|
International
|
|
|
|
|
Consolidated
|
|
|
(Dollars in millions)
|
|
|
|
|
2013
|
|
|
Percent
Change
|
|
|
|
2013
|
|
|
Percent
Change
|
|
|
|
2013
|
|
|
Percent
Change
|
|
|
|
2013
|
|
|
Percent
Change
|
|
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported
|
|
|
|
|
$
|
32,956
|
|
|
|
2.9
|
%
|
|
|
|
$
|
116,216
|
|
|
|
2.4
|
%
|
|
|
|
$
|
65,961
|
|
|
|
2.9
|
%
|
|
|
|
$
|
229,645
|
|
|
|
1.7
|
%
|
|
Currency exchange rate fluctuations1 |
|
|
|
|
680
|
|
|
|
|
|
|
|
680
|
|
|
|
|
|
|
|
1,690
|
|
|
|
|
|
|
|
1,690
|
|
|
|
|
|
|
|
|
|
|
33,636
|
|
|
|
|
|
|
|
116,896
|
|
|
|
|
|
|
|
67,651
|
|
|
|
|
|
|
|
231,335
|
|
|
|
|
|
Net sales from acquisitions
|
|
|
|
|
(216
|
)
|
|
|
|
|
|
|
(216
|
)
|
|
|
|
|
|
|
(416
|
)
|
|
|
|
|
|
|
(416
|
)
|
|
|
|
|
Constant currency net sales
|
|
|
|
|
$
|
33,420
|
|
|
|
4.4
|
%
|
|
|
|
$
|
116,680
|
|
|
|
2.8
|
%
|
|
|
|
$
|
67,235
|
|
|
|
4.9
|
%
|
|
|
|
$
|
230,919
|
|
|
|
2.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported
|
|
|
|
|
$
|
1,465
|
|
|
|
(1.3
|
)%
|
|
|
|
$
|
6,793
|
|
|
|
1.4
|
%
|
|
|
|
$
|
2,721
|
|
|
|
(2.9
|
)%
|
|
|
|
$
|
13,249
|
|
|
|
1.3
|
%
|
|
Currency exchange rate fluctuations1 |
|
|
|
|
(20
|
)
|
|
|
|
|
|
|
(20
|
)
|
|
|
|
|
|
|
(27
|
)
|
|
|
|
|
|
|
(27
|
)
|
|
|
|
|
|
|
|
|
|
1,445
|
|
|
|
|
|
|
|
6,773
|
|
|
|
|
|
|
|
2,694
|
|
|
|
|
|
|
|
13,222
|
|
|
|
|
|
Operating loss from acquisitions
|
|
|
|
|
45
|
|
|
|
|
|
|
|
45
|
|
|
|
|
|
|
|
82
|
|
|
|
|
|
|
|
82
|
|
|
|
|
|
Constant currency operating income
|
|
|
|
|
$
|
1,490
|
|
|
|
0.4
|
%
|
|
|
|
$
|
6,818
|
|
|
|
1.8
|
%
|
|
|
|
$
|
2,776
|
|
|
|
(0.9
|
)%
|
|
|
|
$
|
13,304
|
|
|
|
1.7
|
%
|
1 Excludes currency exchange rate fluctuations related
to acquisitions until the acquisitions are included in both comparable
periods.
Comparable Sales Measures and Sam's Club Measures
The following financial measures presented in the press release to which
this reconciliation is attached are non-GAAP financial measures as
defined by the SEC's rules:
-
the comparable club sales of the company's Sam's Club operating
segment ("Sam's Club") for the thirteen-week and twenty-six week
periods ended Jul. 26, 2013 and Jul. 27, 2012, projected comparable
club sales of Sam's Club for the thirteen weeks ending Oct. 25, 2013
and comparable club sales of Sam's Club for the thirteen weeks ended
Oct. 26, 2012, in each case calculated by excluding Sam's Club's fuel
sales for such periods (the "Comparable Sales Measures");
-
the net sales of Sam's Club for the three months ended Jul. 31, 2013
and the percentage increase in the net sales of Sam's Club for the
three months ended Jul. 31, 2013 over the net sales Sam's Club for the
three months ended Jul. 31, 2012, in each case calculated by excluding
Sam's Club's fuel sales for the relevant period; and
-
the segment operating income of Sam's Club for the three months and
six months ended Jul. 31, 2013 and 2012 and the percentage increase in
the segment operating income of Sam's Club for the three months and
six months ended Jul. 31, 2013 over the segment operating income of
Sam's Club for the three months and six months ended Jul. 31, 2012, in
each case calculated by excluding Sam's Club's fuel sales for the
relevant period.
The measures described in the second and third bullet points above are
referred to herein as the "Sam's Club Measures."
We believe the Sam's Club's comparable club sales for the historical
periods for which the corresponding Comparable Sales Measures are
presented calculated by including fuel sales and their effects are the
financial measures computed in accordance with GAAP most directly
comparable to the respective Comparable Sales Measures. We believe the
Sam's Club's projected comparable club sales for the 13 weeks ending
Oct. 25, 2013 calculated by including fuel sales and their effects is
the financial measure computed in accordance with GAAP most directly
comparable to the projected comparable club sales of Sam's Club for the
13 weeks ending Oct. 25, 2013 calculated by excluding fuel sales. We
believe the reported Sam's Club's net sales, percentage increase in net
sales, segment operating income and percentage increase in segment
operating income for the periods for which the corresponding Sam's Club
Measures are presented are the most directly comparable financial
measures computed in accordance with GAAP to the respective Comparable
Sales Measures.
We believe that the presentation of the Comparable Sales Measures and
the Sam's Club Measures provides useful information to investors
regarding the company's financial condition and results of operations
because that information permits investors to understand the effect of
the fuel sales of Sam's Club, which are affected by the volatility of
fuel prices, on Sam's Club's comparable club sales and on Sam's Club's
net sales and operating income for the periods presented.
Copyright Business Wire 2013