Wal-Mart Stores, Inc. (NYSE: WMT) today reported financial results for
the third quarter ended Oct. 31, 2013. Net sales were $114.9 billion, an
increase of 1.6 percent over last year. This quarter included the
negative impact of approximately $1.6 billion from currency exchange
rate fluctuations. On a constant currency basis,1 net
sales would have increased 2.7 percent to $116.2 billion. Membership and
other income increased 12.3 percent versus last year. Total revenue was
$115.7 billion, an increase of $1.9 billion, or 1.7 percent over last
year.
Consolidated net income attributable to Walmart was $3.7 billion, up 2.8
percent. Diluted earnings per share from continuing operations
attributable to Walmart were $1.14, a 6.5 percent increase, compared to
$1.07 last year, which reflects $0.01 per share from Vips restaurants in
Mexico now in discontinued operations. In our financial statements, Vips
operating results are presented in discontinued operations, both in the
current and prior periods.
|
Solid earnings performance
|
"Walmart delivered solid earnings growth that was within our guidance
range. We had strong operating income across our segments, with Walmart
U.S. growing almost 6 percent, Sam's Club increasing more than 9
percent, and International up 8 percent on a constant currency1
basis," said Mike Duke, Wal-Mart Stores, Inc. president and chief
executive officer.
"Our most important priority is growing top line sales, including comp
sales," Duke added. "The retail environment, both in stores and online,
remains competitive. Walmart has aggressive plans to help our customers
enjoy the holiday season, and there is no doubt that we plan to win for
our customers and shareholders throughout the holidays."
Two years ago, Walmart committed to reduce operating expenses as a
percentage of net sales by 100 basis points by fiscal year 2017. Duke
said the company remains committed to that goal.
"The company's expense leverage metric improved from last quarter.
Walmart U.S. delivered strong expense leverage, and International made
good progress on reducing costs in key markets," said Duke. "Throughout
the company, we constantly focus on managing our costs so we can provide
the low prices our customers count on."
"We managed our business well and delivered solid returns to
shareholders," said Charles Holley, executive vice president and chief
financial officer.
During the third quarter, the company repurchased approximately 23
million shares for $1.7 billion. In addition, the company paid $1.5
billion in dividends. In total, the company returned $3.2 billion to
shareholders through dividends and share repurchases in the quarter.
Return on investment1 (ROI) for the trailing 12-months
ended Oct. 31, 2013 was 17.5 percent, compared to 18.0 percent for the
prior period. The decline was principally due to investments in fixed
assets, growth in working capital, and the impact of acquisitions.
Free cash flow1 was $3.8 billion for the nine months
ended Oct. 31, 2013, compared to $7.0 billion in the prior year. Timing
of payments associated with taxes and payables, as well as higher
capital expenditures were the primary drivers of the reduction.
1 See additional information at the end of this
release regarding non-GAAP financial measures.
The company's guidance reflects a view of global economic trends,
including ongoing headwinds from currency exchange rate fluctuations, a
competitive holiday season, and a full-year effective tax rate that is
expected to range between 31 and 33 percent.
"For the fourth quarter, we expect EPS to range between $1.50 and $1.60.
Our guidance includes the impact of approximately $0.10 per share for
certain items described below. Accounting for these factors, we believe
our fourth quarter underlying1 EPS will range between
$1.60 and $1.70," said Holley.
"For the full year, we are updating our EPS guidance to range between
$5.01 and $5.11. Accounting for the $0.10 of certain items that will
impact the fourth quarter, our full year underlying1
EPS will range between $5.11 and $5.21," added Holley.
Two items impact our guidance by approximately $0.10 per share.
-
The company is closing approximately 50 under-performing stores in
Brazil and China. The impact of these closures will be dilutive to EPS
by about $0.06.
-
The company will independently own and operate the wholesale format in
India and will end its franchise agreement with Bharti Retail for the
retail business. This transaction is subject to regulatory approval.
The net impact is expected to be dilutive to EPS by approximately
$0.04.
The company agreed to the sale of its Vips restaurants in Mexico, which
is still subject to regulatory approval and is now recorded in
discontinued operations. Outside of diluted earnings per share from
continuing operations, discontinued operations for the fourth quarter is
expected to include an estimated gain of $0.06 per share from the sale
of Vips.
|
U.S. comparable store sales results
|
The company reported U.S. comparable store sales based on its 13-week
and 39-week retail calendar for the periods ended Oct. 25, 2013 and Oct.
26, 2012 as follows:
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|
|
|
|
|
|
|
|
|
|
|
|
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Without Fuel
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With Fuel
|
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Fuel Impact
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13 Weeks Ended
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13 Weeks Ended
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13 Weeks Ended
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10/25/2013
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10/26/2012
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10/25/2013
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10/26/2012
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10/25/2013
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10/26/2012
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Walmart U.S.
|
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-0.3%
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1.5%
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-0.3%
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1.5%
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0.0%
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0.0%
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Sam’s Club
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1.1%
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2.7%
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0.1%
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3.8%
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-1.0%
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1.1%
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Total U.S.
|
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-0.1%
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1.7%
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-0.2%
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1.9%
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-0.1%
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0.2%
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Without Fuel
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With Fuel
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Fuel Impact
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39 Weeks Ended
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39 Weeks Ended
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39 Weeks Ended
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10/25/2013
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10/26/2012
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10/25/2013
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10/26/2012
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10/25/2013
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10/26/2012
|
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Walmart U.S.
|
|
|
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-0.7%
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|
2.1%
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-0.7%
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|
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2.1%
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0.0%
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0.0%
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Sam’s Club
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1.0%
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4.1%
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0.5%
|
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4.4%
|
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-0.5%
|
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0.3%
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Total U.S.
|
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|
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-0.4%
|
|
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2.4%
|
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|
-0.5%
|
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|
2.5%
|
|
|
-0.1%
|
|
|
0.1%
|
|
|
|
|
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|
|
|
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During the 13-week period, Walmart U.S. comp traffic decreased 0.4
percent, while average ticket increased 0.1 percent. E-commerce sales
positively impacted comp sales by approximately 0.2 percent for the
13-week period.
1 See additional information at the end of this
release regarding non-GAAP financial measures.
In the third quarter period, excluding fuel,1 Sam's
Club comp traffic was up 2.4 percent, while ticket was down 1.3 percent.
E-commerce sales positively impacted comp sales by approximately 0.2
percent for the 13-week period.
The company's e-commerce sales impact includes those sales initiated
through the company's websites and fulfilled through the company's
dedicated e-commerce distribution facilities, as well as an estimate for
sales initiated online, but fulfilled through the company's stores and
clubs.
Net sales, including fuel, were as follows:
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Three Months Ended
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Nine Months Ended
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October 31,
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October 31,
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(dollars in billions)
|
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2013
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|
2012
|
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Percent
Change
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2013
|
|
2012
|
Percent
Change
|
|
Walmart U.S.
|
|
|
|
|
$
|
67.692
|
|
|
$
|
66.113
|
|
|
2.4
|
%
|
|
$
|
202.973
|
|
|
$
|
199.789
|
|
1.6
|
%
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Walmart International
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|
|
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33.109
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33.046
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0.2
|
%
|
|
98.839
|
|
|
96.922
|
|
2.0
|
%
|
|
Sam’s Club
|
|
|
|
|
14.075
|
|
|
13.918
|
|
|
1.1
|
%
|
|
42.478
|
|
|
41.933
|
|
1.3
|
%
|
|
Consolidated
|
|
|
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|
$
|
114.876
|
|
|
$
|
113.077
|
|
|
1.6
|
%
|
|
$
|
344.290
|
|
|
$
|
338.644
|
|
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 $34.4 billion, an increase
of 4.1 percent over last year. Currency exchange fluctuations
negatively impacted net sales by approximately $1.6 billion in the
quarter and an acquisition favorably impacted sales by $314 million.
-
Sam's Club net sales, excluding fuel,1 were $12.4
billion, an increase of 2.1 percent from last year.
-
Consolidated net sales on a constant currency basis1
would have increased 2.7 percent to $116.2 billion.
"A challenging global economy and negative currency exchange rate
fluctuations impacted our sales growth in the third quarter," said Doug
McMillon, Walmart International president and CEO. "In the fourth
quarter, we will continue our progress on managing expenses well and
staying focused on growing sales, including e-commerce. Still, the
slow-growth macroeconomic environment is persisting through the first
month of this quarter, and the markets continue to be competitive."
Segment operating income was as follows:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
October 31,
|
|
|
October 31,
|
|
|
(dollars in billions)
|
|
|
|
|
2013
|
|
2012
|
|
Percent
Change
|
|
|
2013
|
|
2012
|
|
Percent
Change
|
|
Walmart U.S.
|
|
|
|
|
$
|
5.123
|
|
|
$
|
4.841
|
|
|
5.8
|
%
|
|
|
$
|
15.973
|
|
|
$
|
15.122
|
|
|
5.6
|
%
|
|
Walmart International
|
|
|
|
|
1.457
|
|
|
1.432
|
|
|
1.7
|
%
|
|
|
4.144
|
|
|
4.201
|
|
|
-1.4%
|
|
Sam’s Club
|
|
|
|
|
0.474
|
|
|
0.434
|
|
|
9.2
|
%
|
|
|
1.550
|
|
|
1.458
|
|
|
6.3
|
%
|
|
Sam's Club (excluding fuel)
|
|
|
|
|
0.466
|
|
|
0.426
|
|
|
9.4
|
%
|
|
|
1.537
|
|
|
1.424
|
|
|
7.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 See additional information at the end of this
release regarding non-GAAP financial measures.
|
|
|
"Walmart U.S. delivered almost $68 billion in net sales, and we
continued to deliver strong bottom line results in a difficult sales
environment," said Bill Simon, Walmart U.S. president and CEO.
"Operating income grew by 5.8 percent to over $5.1 billion in the
quarter."
"We're pleased with our third quarter results, especially our positive
comp sales and steady increase in traffic," said Rosalind Brewer, Sam's
Club president and CEO. "This led to strong growth in operating income,
increasing 9.2 percent to $474 million."
|
U.S. comp sales forecasts
|
"The team has developed our best holiday plan ever. We are committed to
being the number one retail destination," said Simon. "We're making sure
our shelves are well-stocked with the most popular toys, and we're
guaranteeing low prices all season in the store through the Christmas Ad
Match Program."
For the 14-week period ending Jan. 31, 2014, Walmart U.S. expects comp
store sales to be relatively flat. Last year, Walmart's comp sales rose
0.3 percent for the 14-week period ended Feb. 1, 2013.
"At Sam's Club, the holiday season is well under way, and we're
investing in price for the fourth quarter," said Brewer. "Our members
will be rewarded with two Instant Savings Books and an exclusive VIP
event, and we've collaborated with e-commerce to provide the best online
program we've ever had."
Sam's Club expects comp sales, excluding fuel,1 for
the 14-week period ending Jan. 31, 2014 to range between flat and 2
percent. Last year comp sales, excluding fuel,1
increased 1.8 percent for the 14-week period ended Feb. 1, 2013.
Walmart U.S. and Sam's Club will report comparable sales for the 14-week
period ending Jan. 31, 2014 on Feb. 20, 2014, when the company reports
fourth 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 11,096 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.
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 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 from continuing operations attributable to Walmart for the
three months and fiscal year ending Jan. 31, 2014, the company’s
underlying diluted earnings per share from continuing operations
attributable to Walmart for the three months and fiscal year ending Jan.
31, 2014 calculated by adjusting for the anticipated effect on the
company’s diluted earnings per share from continuing operations
attributable to Walmart for the three months ending Jan. 31, 2014 of the
ending of the company’s retail franchise agreement in India and the
closure of certain stores in Brazil and China, which are expected to
occur during the three months ending Jan 31, 2014, the anticipated
amount of the impact of such items on the company’s diluted earnings per
share from continuing operations attributable to Walmart for the three
months ending Jan. 31, 2014, the estimated amount by which the sale of
the Vips restaurant business will be accretive to diluted earnings per
share from discontinued operations for the three months ending Jan. 31,
2014, the company’s effective tax rate for the fiscal year ending Jan.
31, 2014, 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 14-week period from Oct. 26, 2013 through
Jan. 31, 2014, and certain assumptions on which those forecasts and
estimates are based, as well as statements of the company’s objective to
reduce its operating expenses as a percentage of net sales by 100 basis
points by Jan 31, 2017 and of management's expectations for the
company’s Walmart International segment continuing its progress in
managing its expenses well and staying focused on growing sales,
including e-commerce, and the company’s Sam’s Club segment providing
Instant Savings Books and a VIP event to certain of its members in the
2013 holiday season 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 updating," "anticipate," “estimated,” "expect,"
“expected,” "expects," "forecast," “goal,” "guidance," “is expected,”
"will be," "will continue," and "will range" 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
levels, spending patterns and debt levels; consumer demand for certain
merchandise in the 2013 holiday season; customer traffic in Walmart's
stores and clubs and average ticket size; consumer acceptance of the
company’s merchandise offerings; the disruption of 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;
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, including enhancements to Walmart's compliance program and
ongoing investigations; currency exchange rate fluctuations; changes in
market interest rates; conditions and events affecting domestic and
global financial and capital markets; the company not obtaining in the
three months ending Jan. 31, 2014 the necessary approvals for the sale
of the Vips restaurant business and the ending of the company’s retail
franchise agreement in India; failure of the purchaser of the Vips
restaurant business to perform its obligations regarding the purchase of
the Vips restaurant business; delays in the closure of the stores in
Brazil and China proposed to be closed in the quarter ending Jan. 31,
2014; and other risks. Factors that may affect the company’s effective
tax rate include changes in the company’s assessment of certain tax
contingencies, valuation allowances, changes in law, outcomes of
administrative audits, the impact of 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
|
|
|
Nine Months Ended
|
|
SUBJECT TO RECLASSIFICATION
|
|
|
|
|
October 31,
|
|
|
October 31,
|
|
(Dollars in millions, except share data)
|
|
|
|
|
2013
|
|
|
2012
|
|
|
Percent
Change
|
|
|
2013
|
|
|
2012
|
|
|
Percent
Change
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
|
$
|
114,876
|
|
|
|
$
|
113,077
|
|
|
|
1.6
|
%
|
|
|
$
|
344,290
|
|
|
|
$
|
338,644
|
|
|
|
1.7
|
%
|
|
Membership and other income
|
|
|
|
|
812
|
|
|
|
723
|
|
|
|
12.3
|
%
|
|
|
2,298
|
|
|
|
2,231
|
|
|
|
3.0
|
%
|
|
Total revenues
|
|
|
|
|
115,688
|
|
|
|
113,800
|
|
|
|
1.7
|
%
|
|
|
346,588
|
|
|
|
340,875
|
|
|
|
1.7
|
%
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
|
|
86,687
|
|
|
|
85,470
|
|
|
|
1.4
|
%
|
|
|
260,098
|
|
|
|
256,226
|
|
|
|
1.5
|
%
|
|
Operating, selling, general and administrative expenses
|
|
|
|
|
22,691
|
|
|
|
22,237
|
|
|
|
2.0
|
%
|
|
|
66,965
|
|
|
|
65,504
|
|
|
|
2.2
|
%
|
|
Operating income
|
|
|
|
|
6,310
|
|
|
|
6,093
|
|
|
|
3.6
|
%
|
|
|
19,525
|
|
|
|
19,145
|
|
|
|
2.0
|
%
|
|
Interest:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt
|
|
|
|
|
527
|
|
|
|
522
|
|
|
|
1.0
|
%
|
|
|
1,556
|
|
|
|
1,512
|
|
|
|
2.9
|
%
|
|
Capital leases
|
|
|
|
|
65
|
|
|
|
68
|
|
|
|
(4.4
|
)%
|
|
|
198
|
|
|
|
205
|
|
|
|
(3.4
|
)%
|
|
Interest income
|
|
|
|
|
(12
|
)
|
|
|
(44
|
)
|
|
|
(72.7
|
)%
|
|
|
(92
|
)
|
|
|
(131
|
)
|
|
|
(29.8
|
)%
|
|
Interest, net
|
|
|
|
|
580
|
|
|
|
546
|
|
|
|
6.2
|
%
|
|
|
1,662
|
|
|
|
1,586
|
|
|
|
4.8
|
%
|
|
Income from continuing operations before income taxes
|
|
|
|
|
5,730
|
|
|
|
5,547
|
|
|
|
3.3
|
%
|
|
|
17,863
|
|
|
|
17,559
|
|
|
|
1.7
|
%
|
|
Provision for income taxes
|
|
|
|
|
1,860
|
|
|
|
1,738
|
|
|
|
7.0
|
%
|
|
|
5,856
|
|
|
|
5,718
|
|
|
|
2.4
|
%
|
|
Income from continuing operations
|
|
|
|
|
3,870
|
|
|
|
3,809
|
|
|
|
1.6
|
%
|
|
|
12,007
|
|
|
|
11,841
|
|
|
|
1.4
|
%
|
|
Income from discontinued operations, net of income taxes
|
|
|
|
|
15
|
|
|
|
16
|
|
|
|
6.3
|
%
|
|
|
38
|
|
|
|
39
|
|
|
|
2.6
|
%
|
|
Consolidated net income
|
|
|
|
|
3,885
|
|
|
|
3,825
|
|
|
|
1.6
|
%
|
|
|
12,045
|
|
|
|
11,880
|
|
|
|
1.4
|
%
|
|
Less consolidated net income attributable to noncontrolling interest
|
|
|
|
|
(147
|
)
|
|
|
(190
|
)
|
|
|
(22.6
|
)%
|
|
|
(454
|
)
|
|
|
(487
|
)
|
|
|
(6.8
|
)%
|
|
Consolidated net income attributable to Walmart
|
|
|
|
|
$
|
3,738
|
|
|
|
$
|
3,635
|
|
|
|
2.8
|
%
|
|
|
$
|
11,591
|
|
|
|
$
|
11,393
|
|
|
|
1.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations attributable to Walmart:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
|
|
$
|
3,870
|
|
|
|
$
|
3,809
|
|
|
|
1.6
|
%
|
|
|
$
|
12,007
|
|
|
|
$
|
11,841
|
|
|
|
1.4
|
%
|
|
Less income from continuing operations attributable to
noncontrolling interest
|
|
|
|
|
(143
|
)
|
|
|
(185
|
)
|
|
|
(22.7
|
)%
|
|
|
(443
|
)
|
|
|
(475
|
)
|
|
|
(6.7
|
)%
|
|
Income from continuing operations attributable to Walmart
|
|
|
|
|
$
|
3,727
|
|
|
|
$
|
3,624
|
|
|
|
2.8
|
%
|
|
|
$
|
11,564
|
|
|
|
$
|
11,366
|
|
|
|
1.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per common share from continuing operations
attributable to Walmart
|
|
|
|
|
$
|
1.14
|
|
|
|
$
|
1.08
|
|
|
|
5.6
|
%
|
|
|
$
|
3.52
|
|
|
|
$
|
3.35
|
|
|
|
5.1
|
%
|
|
Basic net income per common share from discontinued operations
attributable to Walmart
|
|
|
|
|
$
|
0.01
|
|
|
|
—
|
|
|
|
100.0
|
%
|
|
|
0.01
|
|
|
|
0.02
|
|
|
|
(50.0
|
)%
|
|
Basic net income per common share attributable to Walmart
|
|
|
|
|
$
|
1.15
|
|
|
|
$
|
1.08
|
|
|
|
6.5
|
%
|
|
|
$
|
3.53
|
|
|
|
$
|
3.37
|
|
|
|
4.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per common share from continuing operations
attributable to Walmart
|
|
|
|
|
$
|
1.14
|
|
|
|
$
|
1.07
|
|
|
|
6.5
|
%
|
|
|
$
|
3.51
|
|
|
|
$
|
3.34
|
|
|
|
5.1
|
%
|
|
Diluted net income per common share from discontinued operations
attributable to Walmart
|
|
|
|
|
—
|
|
|
|
0.01
|
|
|
|
(100.0
|
)%
|
|
|
0.01
|
|
|
|
0.01
|
|
|
|
—
|
%
|
|
Diluted net income per common share attributable to Walmart
|
|
|
|
|
$
|
1.14
|
|
|
|
$
|
1.08
|
|
|
|
5.6
|
%
|
|
|
$
|
3.52
|
|
|
|
$
|
3.35
|
|
|
|
5.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
3,257
|
|
|
|
3,364
|
|
|
|
|
|
|
3,279
|
|
|
|
3,385
|
|
|
|
|
|
Diluted
|
|
|
|
|
3,271
|
|
|
|
3,379
|
|
|
|
|
|
|
3,293
|
|
|
|
3,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common share
|
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
|
|
|
$
|
1.88
|
|
|
|
$
|
1.59
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wal-Mart Stores, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUBJECT TO RECLASSIFICATION
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in millions)
|
|
|
|
|
October 31,
|
|
|
January 31,
|
|
|
October 31,
|
|
ASSETS
|
|
|
|
|
2013
|
|
|
2013
|
|
|
2012
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
$
|
8,736
|
|
|
|
$
|
7,781
|
|
|
|
$
|
8,643
|
|
|
Receivables, net
|
|
|
|
|
6,206
|
|
|
|
6,768
|
|
|
|
5,567
|
|
|
Inventories
|
|
|
|
|
49,673
|
|
|
|
43,803
|
|
|
|
47,487
|
|
|
Prepaid expenses and other
|
|
|
|
|
2,160
|
|
|
|
1,588
|
|
|
|
1,654
|
|
|
Current assets of discontinued operations
|
|
|
|
|
367
|
|
|
|
—
|
|
|
|
80
|
|
|
Total current assets
|
|
|
|
|
67,142
|
|
|
|
59,940
|
|
|
|
63,431
|
|
|
Property and equipment:
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment
|
|
|
|
|
170,967
|
|
|
|
165,825
|
|
|
|
163,011
|
|
|
Less accumulated depreciation
|
|
|
|
|
(56,313
|
)
|
|
|
(51,896
|
)
|
|
|
(50,450
|
)
|
|
Property and equipment, net
|
|
|
|
|
114,654
|
|
|
|
113,929
|
|
|
|
112,561
|
|
|
Property under capital leases:
|
|
|
|
|
|
|
|
|
|
|
|
|
Property under capital leases
|
|
|
|
|
5,668
|
|
|
|
5,899
|
|
|
|
5,900
|
|
|
Less accumulated amortization
|
|
|
|
|
(3,095
|
)
|
|
|
(3,147
|
)
|
|
|
(3,208
|
)
|
|
Property under capital leases, net
|
|
|
|
|
2,573
|
|
|
|
2,752
|
|
|
|
2,692
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
|
|
19,729
|
|
|
|
20,497
|
|
|
|
20,572
|
|
|
Other assets and deferred charges
|
|
|
|
|
5,778
|
|
|
|
5,987
|
|
|
|
6,562
|
|
|
Total assets
|
|
|
|
|
$
|
209,876
|
|
|
|
$
|
203,105
|
|
|
|
$
|
205,818
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term borrowings
|
|
|
|
|
$
|
12,817
|
|
|
|
$
|
6,805
|
|
|
|
$
|
8,740
|
|
|
Accounts payable
|
|
|
|
|
39,221
|
|
|
|
38,080
|
|
|
|
40,272
|
|
|
Dividends payable
|
|
|
|
|
1,573
|
|
|
|
—
|
|
|
|
1,381
|
|
|
Accrued liabilities
|
|
|
|
|
18,606
|
|
|
|
18,808
|
|
|
|
18,536
|
|
|
Accrued income taxes
|
|
|
|
|
255
|
|
|
|
2,211
|
|
|
|
1,010
|
|
|
Long-term debt due within one year
|
|
|
|
|
4,147
|
|
|
|
5,587
|
|
|
|
6,550
|
|
|
Obligations under capital leases due within one year
|
|
|
|
|
315
|
|
|
|
327
|
|
|
|
331
|
|
|
Current liabilities of discontinued operations
|
|
|
|
|
87
|
|
|
|
—
|
|
|
|
25
|
|
|
Total current liabilities
|
|
|
|
|
77,021
|
|
|
|
71,818
|
|
|
|
76,845
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
|
41,702
|
|
|
|
38,394
|
|
|
|
38,872
|
|
|
Long-term obligations under capital leases
|
|
|
|
|
2,841
|
|
|
|
3,023
|
|
|
|
2,964
|
|
|
Deferred income taxes and other
|
|
|
|
|
8,298
|
|
|
|
7,613
|
|
|
|
8,044
|
|
|
Redeemable noncontrolling interest
|
|
|
|
|
1,492
|
|
|
|
519
|
|
|
|
492
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
|
|
324
|
|
|
|
332
|
|
|
|
336
|
|
|
Capital in excess of par value
|
|
|
|
|
2,364
|
|
|
|
3,620
|
|
|
|
3,861
|
|
|
Retained earnings
|
|
|
|
|
72,888
|
|
|
|
72,978
|
|
|
|
70,256
|
|
|
Accumulated other comprehensive income (loss)
|
|
|
|
|
(2,183
|
)
|
|
|
(587
|
)
|
|
|
(562
|
)
|
|
Total Walmart shareholders’ equity
|
|
|
|
|
73,393
|
|
|
|
76,343
|
|
|
|
73,891
|
|
|
Nonredeemable noncontrolling interest
|
|
|
|
|
5,129
|
|
|
|
5,395
|
|
|
|
4,710
|
|
|
Total equity
|
|
|
|
|
78,522
|
|
|
|
81,738
|
|
|
|
78,601
|
|
|
Total liabilities and equity
|
|
|
|
|
$
|
209,876
|
|
|
|
$
|
203,105
|
|
|
|
$
|
205,818
|
|
|
|
|
|
|
|
|
|
Wal-Mart Stores, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
SUBJECT TO RECLASSIFICATION
|
|
|
|
|
October 31,
|
|
(Dollars in millions)
|
|
|
|
|
2013
|
|
|
|
2012
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
Consolidated net income
|
|
|
|
|
$
|
12,045
|
|
|
|
|
$
|
11,880
|
|
|
Income from discontinued operations, net of income taxes
|
|
|
|
|
(38
|
)
|
|
|
|
(39
|
)
|
|
Income from continuing operations
|
|
|
|
|
12,007
|
|
|
|
|
11,841
|
|
|
Adjustments to reconcile consolidated net income to net cash
provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
6,600
|
|
|
|
|
6,304
|
|
|
Deferred income taxes
|
|
|
|
|
594
|
|
|
|
|
279
|
|
|
Other operating activities
|
|
|
|
|
465
|
|
|
|
|
138
|
|
|
Changes in certain assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
Receivables, net
|
|
|
|
|
191
|
|
|
|
|
501
|
|
|
Inventories
|
|
|
|
|
(6,230
|
)
|
|
|
|
(6,459
|
)
|
|
Accounts payable
|
|
|
|
|
2,089
|
|
|
|
|
3,545
|
|
|
Accrued liabilities
|
|
|
|
|
(95
|
)
|
|
|
|
(82
|
)
|
|
Accrued income taxes
|
|
|
|
|
(2,301
|
)
|
|
|
|
(160
|
)
|
|
Net cash provided by operating activities
|
|
|
|
|
13,320
|
|
|
|
|
15,907
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
Payments for property and equipment
|
|
|
|
|
(9,506
|
)
|
|
|
|
(8,921
|
)
|
|
Proceeds from the disposal of property and equipment
|
|
|
|
|
521
|
|
|
|
|
343
|
|
|
Investments and business acquisitions, net of cash acquired
|
|
|
|
|
(15
|
)
|
|
|
|
(716
|
)
|
|
Other investing activities
|
|
|
|
|
58
|
|
|
|
|
(58
|
)
|
|
Net cash used in investing activities
|
|
|
|
|
(8,942
|
)
|
|
|
|
(9,352
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
Net change in short-term borrowings
|
|
|
|
|
6,046
|
|
|
|
|
4,700
|
|
|
Proceeds from issuance of long-term debt
|
|
|
|
|
7,053
|
|
|
|
|
199
|
|
|
Payments of long-term debt
|
|
|
|
|
(4,943
|
)
|
|
|
|
(639
|
)
|
|
Dividends paid
|
|
|
|
|
(4,625
|
)
|
|
|
|
(4,034
|
)
|
|
Purchase of Company stock
|
|
|
|
|
(5,806
|
)
|
|
|
|
(4,657
|
)
|
|
Other financing activities
|
|
|
|
|
(960
|
)
|
|
|
|
(263
|
)
|
|
Net cash used in financing activities
|
|
|
|
|
(3,235
|
)
|
|
|
|
(4,694
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rates on cash and cash equivalents
|
|
|
|
|
(188
|
)
|
|
|
|
232
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents
|
|
|
|
|
955
|
|
|
|
|
2,093
|
|
|
Cash and cash equivalents at beginning of year
|
|
|
|
|
7,781
|
|
|
|
|
6,550
|
|
|
Cash and cash equivalents at end of period
|
|
|
|
|
$
|
8,736
|
|
|
|
|
$
|
8,643
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 17.5 percent and 18.0 percent for the trailing twelve months
ended October 31, 2013 and 2012, respectively. The decline was
principally due to investments in fixed assets, growth in working
capital, and the impact of acquisitions.
We define ROI as adjusted operating income (operating income plus
interest income, depreciation and amortization, and rent expense) for
the trailing twelve months 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 average accumulated
depreciation and average amortization less average accounts payable and
average accrued liabilities for that period, plus a rent factor equal to
the rent for the fiscal year or trailing twelve months 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
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. For example, we exclude the impact of
depreciation and amortization from our reported operating income in
calculating the numerator of our calculation of ROI. In addition, we
include 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 generally accepted accounting principles ("GAAP") that is the most
directly comparable financial measure to our calculation of ROI. 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
|
|
|
|
|
|
|
|
|
October 31,
|
|
(Dollars in millions)
|
|
|
|
|
|
|
2013
|
|
|
|
2012
|
|
CALCULATION OF RETURN ON INVESTMENT
|
|
Numerator
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
|
|
|
$
|
28,181
|
|
|
|
|
$
|
27,546
|
|
|
+ Interest income
|
|
|
|
|
|
|
148
|
|
|
|
|
162
|
|
|
+ Depreciation and amortization
|
|
|
|
|
|
|
8,797
|
|
|
|
|
8,367
|
|
|
+ Rent
|
|
|
|
|
|
|
2,688
|
|
|
|
|
2,560
|
|
|
Adjusted operating income
|
|
|
|
|
|
|
$
|
39,814
|
|
|
|
|
$
|
38,635
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator
|
|
|
|
|
|
|
|
|
|
|
|
|
Average total assets of continuing operations1
|
|
|
|
|
|
|
$
|
207,624
|
|
|
|
|
$
|
200,447
|
|
|
+ Average accumulated depreciation and amortization1
|
|
|
|
|
|
|
56,533
|
|
|
|
|
50,382
|
|
|
- Average accounts payable1
|
|
|
|
|
|
|
39,747
|
|
|
|
|
38,914
|
|
|
- Average accrued liabilities1
|
|
|
|
|
|
|
18,571
|
|
|
|
|
17,713
|
|
|
+ Rent x 8
|
|
|
|
|
|
|
21,504
|
|
|
|
|
20,480
|
|
|
Average invested capital
|
|
|
|
|
|
|
$
|
227,343
|
|
|
|
|
$
|
214,682
|
|
|
Return on investment (ROI)
|
|
|
|
|
|
|
17.5
|
%
|
|
|
|
18.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CALCULATION OF RETURN ON ASSETS
|
|
Numerator
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
|
|
|
|
$
|
17,922
|
|
|
|
|
$
|
17,278
|
|
|
Denominator
|
|
|
|
|
|
|
|
|
|
|
|
|
Average total assets of continuing operations1
|
|
|
|
|
|
|
$
|
207,624
|
|
|
|
|
$
|
200,447
|
|
|
Return on assets (ROA)
|
|
|
|
|
|
|
8.6
|
%
|
|
|
|
8.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of October 31,
|
|
Certain Balance Sheet Data
|
|
2013
|
|
|
|
|
2012
|
|
|
|
2011
|
|
Total assets of continuing operations2
|
|
$
|
209,509
|
|
|
|
|
|
$
|
205,738
|
|
|
|
|
$
|
195,155
|
|
|
Accumulated depreciation and amortization
|
|
59,408
|
|
|
|
|
|
53,658
|
|
|
|
|
47,106
|
|
|
Accounts payable
|
|
39,221
|
|
|
|
|
|
40,272
|
|
|
|
|
37,555
|
|
|
Accrued liabilities
|
|
18,606
|
|
|
|
|
|
18,536
|
|
|
|
|
16,890
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2 Total assets of continuing operations as of
October 31, 2013, 2012 and 2011 in the table above exclude assets
of discontinued operations that are reflected in the Company's
Condensed Consolidated Balance Sheets of $367 million, $80 million
and $89 million, respectively.
|
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 $3.8 billion and $7.0 billion for the nine months
ended October 31, 2013 and 2012, respectively. Timing of payments
associated with taxes and payables, as well as higher capital
expenditures were the primary drivers of the reduction.
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.
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
October 31,
|
|
(Dollars in millions)
|
|
|
|
|
2013
|
|
|
|
2012
|
|
Net cash provided by operating activities
|
|
|
|
|
$
|
13,320
|
|
|
|
|
$
|
15,907
|
|
|
Payments for property and equipment
|
|
|
|
|
(9,506
|
)
|
|
|
|
(8,921
|
)
|
|
Free cash flow
|
|
|
|
|
$
|
3,814
|
|
|
|
|
$
|
6,986
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities1
|
|
|
|
|
$
|
(8,942
|
)
|
|
|
|
$
|
(9,352
|
)
|
|
Net cash used in financing activities
|
|
|
|
|
$
|
(3,235
|
)
|
|
|
|
$
|
(4,694
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 nine months ended October
31, 2013.
|
|
|
|
|
|
Three Months Ended
October 31, 2013
|
|
|
Nine Months Ended
October 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
|
|
|
|
|
$
|
33,109
|
|
|
|
0.2
|
%
|
|
|
$
|
114,876
|
|
|
|
1.6
|
%
|
|
|
$
|
98,839
|
|
|
|
2.0
|
%
|
|
|
$
|
344,290
|
|
|
|
1.7
|
%
|
|
Currency exchange rate fluctuations1
|
|
|
|
|
1,622
|
|
|
|
|
|
|
1,622
|
|
|
|
|
|
|
3,324
|
|
|
|
|
|
|
3,324
|
|
|
|
|
|
|
|
|
|
|
34,731
|
|
|
|
|
|
|
116,498
|
|
|
|
|
|
|
102,163
|
|
|
|
|
|
|
347,614
|
|
|
|
|
|
Net sales from acquisitions
|
|
|
|
|
(314
|
)
|
|
|
|
|
|
(314
|
)
|
|
|
|
|
|
(730
|
)
|
|
|
|
|
|
(730
|
)
|
|
|
|
|
Constant currency net sales
|
|
|
|
|
$
|
34,417
|
|
|
|
4.1
|
%
|
|
|
$
|
116,184
|
|
|
|
2.7
|
%
|
|
|
$
|
101,433
|
|
|
|
4.7
|
%
|
|
|
$
|
346,884
|
|
|
|
2.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported
|
|
|
|
|
$
|
1,457
|
|
|
|
1.7
|
%
|
|
|
$
|
6,310
|
|
|
|
3.6
|
%
|
|
|
$
|
4,144
|
|
|
|
(1.4
|
)%
|
|
|
$
|
19,525
|
|
|
|
2.0
|
%
|
|
Currency exchange rate fluctuations1
|
|
|
|
|
16
|
|
|
|
|
|
|
16
|
|
|
|
|
|
|
(10
|
)
|
|
|
|
|
|
(10
|
)
|
|
|
|
|
|
|
|
|
|
1,473
|
|
|
|
|
|
|
6,326
|
|
|
|
|
|
|
4,134
|
|
|
|
|
|
|
19,515
|
|
|
|
|
|
Operating loss from acquisitions
|
|
|
|
|
74
|
|
|
|
|
|
|
74
|
|
|
|
|
|
|
156
|
|
|
|
|
|
|
156
|
|
|
|
|
|
Constant currency operating income
|
|
|
|
|
$
|
1,547
|
|
|
|
8.0
|
%
|
|
|
$
|
6,400
|
|
|
|
5.0
|
%
|
|
|
$
|
4,290
|
|
|
|
2.1
|
%
|
|
|
$
|
19,671
|
|
|
|
2.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Excludes currency exchange rate fluctuations
related to acquisitions until the acquisitions are included in
both comparable periods.
|
|
|
EPS and Underlying EPS Guidance
The estimated range for the underlying diluted earnings per share from
continuing operations attributable to Walmart ("Underlying EPS") for the
three months and the fiscal year to end Jan. 31, 2014 is considered a
non-GAAP financial measure under the SEC’s rules because the Underlying
EPS for each such period includes certain amounts not included in the
estimated range of diluted earnings per share from continuing operations
attributable to Walmart ("EPS") calculated in accordance with GAAP for
the three months and the fiscal year to end Jan. 31, 2014. Management
believes that the Underlying EPS for the three months and the fiscal
year to end Jan. 31, 2014 is a meaningful metric to share with investors
because that metric, which adjusts EPS for each of such periods for
certain items expected to be recorded in the three months to end Jan.
31, 2014, is the metric that best compares with the EPS for the three
months and the fiscal year ended Jan. 31, 2013, respectively. In
addition, the metric affords investors a view of management’s
expectations for Walmart’s core earnings performance for the three
months and the fiscal year to end Jan. 31, 2014 and the ability to make
a more informed assessment of such expected core earnings performance
for each of such periods when compared to Walmart’s earnings performance
for the three months and the fiscal year ended Jan. 31, 2013,
respectively.
We have calculated the range of Underlying EPS for the three months and
the fiscal year to end Jan. 31, 2014 by adding to the range of EPS for
each such period the approximate amount of the expected dilutive impact
of: (1) the ending of Walmart’s retail franchise agreement in India (the
"India Transaction"); and (2) the planned closure of approximately 50
under-performing stores in Brazil and China (the "Store Closures") on
EPS for the three months to end Jan. 31, 2014.
EPS for the three months and the fiscal year to end Jan. 31, 2014 is the
financial measure calculated in accordance with GAAP that is most
directly comparable to the Underlying EPS for the three months and the
fiscal year to end Jan. 31, 2014, respectively. The calculation of the
Underlying EPS for each such period and the reconciliation of the
Underlying EPS for each such period to EPS for such period are as
follows:
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EPS Guidance for the Three Months to End January 31, 2014
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Adjustments to EPS Guidance
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EPS
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Store Closures
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India Transaction
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Underlying EPS
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Diluted net income per common share:
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Diluted income per common share from continuing operations
attributable to Walmart
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1.50 - 1.60
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0.06
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0.04
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1.60 - 1.70
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EPS Guidance for the Twelve Months to End January 31, 2014
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Adjustments to EPS Guidance
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EPS
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Store Closures
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India Transaction
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Underlying EPS
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Diluted net income per common share:
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Diluted income per common share from continuing operations
attributable to Walmart
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5.01 - 5.11
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0.06
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0.04
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5.11 - 5.21
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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:
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the comparable club sales of the company's Sam's Club operating
segment ("Sam's Club") for the thirteen-week and thirty-nine week
periods ended Oct. 25, 2013 and Oct. 26, 2012, projected comparable
club sales of Sam's Club for the fourteen weeks ending Jan. 31, 2014
and comparable club sales of Sam's Club for the fourteen weeks ended
Feb. 1, 2013, in each case calculated by excluding Sam's Club's fuel
sales for such periods (the "Comparable Sales Measures");
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the net sales of Sam's Club for the three months and nine months ended
Oct. 31, 2013 and the percentage increase in the net sales of Sam's
Club for the three months and nine months ended Oct. 31, 2013 over the
net sales Sam's Club for the three months and nine months ended Oct.
31, 2012, in each case calculated by excluding Sam's Club's fuel sales
for the relevant period; and
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the segment operating income of Sam's Club for the three months and
nine months ended Oct. 31, 2013 and 2012 and the percentage increase
in the segment operating income of Sam's Club for the three months and
nine months ended Oct. 31, 2013 over the segment operating income of
Sam's Club for the three months and nine months ended Oct. 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 fourteen weeks
ending Jan. 31, 2014 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 fourteen weeks ending Jan. 31, 2014 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