Wal-Mart Stores, Inc. (NYSE: WMT) today reported financial results for
the second quarter ended July 31, 2014.
Consolidated net sales for the second quarter were $119.3 billion, an
increase of 2.8 percent over last year. This quarter included the
negative impact of $696 million from currency exchange rate
fluctuations. On a constant currency basis,1 net sales
would have increased 3.4 percent to $120.0 billion. Membership and other
income increased 8.2 percent versus last year. Total revenue was $120.1
billion, an increase of approximately $3.3 billion, or 2.8 percent.
Consolidated net income attributable to Walmart was $4.1 billion, an
increase of 0.6 percent. Diluted earnings per share from continuing
operations attributable to Walmart were $1.21, or 1.6 percent below last
year’s $1.23.2
Solid EPS performance
“I’m pleased
with our solid earnings per share performance,” said Doug McMillon,
Wal-Mart Stores, Inc. president and CEO. “As it relates to the positives
from the quarter, I’m encouraged by the performance of our International
business, our Neighborhood Market sales in the U.S. and by our
e-commerce growth. As it relates to our challenges in the quarter, we
wanted to see stronger comps in Walmart U.S. and Sam’s Club, but both
reported flat comp sales. Stronger sales in the U.S. businesses would’ve
also helped our profit performance.”
Walmart is continuing to invest in enhancing its e-commerce capabilities
and McMillon pointed out the need to move quickly to serve customers
more effectively.
“We see opportunities to improve in merchandising, pricing and store
level service in our supercenters, and we are working to close those
gaps,” added McMillon. “Our investments in e-commerce and mobile are
very important, as the lines between digital and physical retail
continue to blur. Our customers expect a seamless experience, and we’re
working to deliver that for them around the world.”
Returns
The company paid $1.55 billion
in dividends and repurchased approximately 4 million shares for $307
million in the second quarter. In total, the company returned
approximately $1.9 billion to shareholders through dividends and share
repurchases.
Return on investment1 (ROI) for the trailing 12-months
ended July 31, 2014 was 16.6 percent, compared to 17.9 percent for the
prior comparable period. The decrease in ROI was primarily due to a
decrease in operating income, as well as our continued capital
investment in store growth and e-commerce.
Free cash flow1 was $6.8 billion for the six months
ended July 31, 2014, compared to $5.2 billion in the prior year. The
increase in free cash flow was primarily due to the timing of income tax
payments and capital expenditures.
1 See additional information at the end of this
release regarding non-GAAP financial measures.
2 This
amount excludes $0.01 per share associated with the operations of Vips,
which have been reclassified as discontinued operations.
Guidance
The company’s financial
guidance reflects a view of global economic trends and assumes currency
exchange rates remain at current levels. Forecasted earnings per share
from continuing operations for the full year are expected to range
between $4.90 and $5.15, versus previous guidance of $5.10 to $5.45.
This assumes a range for third quarter EPS of $1.10 to $1.20.
“Our guidance includes incremental investments in e-commerce and
headwinds from higher health-care costs in the U.S. than previously
estimated. This guidance also assumes the effective tax rate will be
around 34 percent for the third quarter. The annual effective tax rate
is projected to be between 32 and 34 percent. The actual rate will
depend on a number of factors, including our performance, discrete items
and pending U.S. Congressional actions regarding the extension of
certain tax legislation,” said Charles Holley, executive vice president
and chief financial officer.
U.S. comparable store sales results
The
company reported U.S. comparable store sales based on its 13-week and
26-week retail calendar for the periods ended Aug. 1, 2014 and July 26,
2013 as follows:
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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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8/1/2014
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7/26/2013
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8/1/2014
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7/26/2013
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8/1/2014
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7/26/2013
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Walmart U.S.
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0.0
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%
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-0.3
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%
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0.0
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%
|
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-0.3
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%
|
|
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0.0
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%
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|
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0.0
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%
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|
Sam’s Club
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0.0
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%
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1.7
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%
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0.5
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%
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1.7
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%
|
|
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0.5
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%
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|
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0.0
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%
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|
Total U.S.
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0.0
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%
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0.0
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%
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0.1
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%
|
|
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0.1
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%
|
|
|
0.1
|
%
|
|
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0.1
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%
|
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|
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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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26 Weeks Ended
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26 Weeks Ended
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26 Weeks Ended
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8/1/2014
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7/26/2013
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8/1/2014
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7/26/2013
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8/1/2014
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7/26/2013
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Walmart U.S.
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0.0
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%
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-0.8
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%
|
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|
0.0
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%
|
|
|
-0.8
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%
|
|
|
0.0
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%
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|
|
0.0
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%
|
|
Sam’s Club
|
|
|
|
-0.3
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%
|
|
|
0.9
|
%
|
|
|
-0.2
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%
|
|
|
0.8
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%
|
|
|
0.1
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%
|
|
|
-0.1
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%
|
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Total U.S.
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|
|
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-0.1
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%
|
|
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-0.6
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%
|
|
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-0.1
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%
|
|
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-0.6
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%
|
|
|
0.0
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%
|
|
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0.0
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%
|
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|
During the 13-week period, Walmart U.S. comp traffic decreased 1.1
percent, while average ticket increased 1.1 percent. E-commerce sales
positively impacted comp sales by approximately 0.3 percent for the
13-week period.
In the 13-week period, excluding fuel,1 Sam’s Club
comp traffic was up 0.3 percent, and average ticket was down 0.3
percent. E-commerce sales positively impacted comp sales by
approximately 0.3 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.
1 See additional information at the end of this
release regarding non-GAAP financial measures.
Net sales results
Net sales, including
fuel, were as follows:
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Three months ended
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Six Months Ended
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July 31,
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July 31,
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(dollars in billions)
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|
|
2014
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|
|
2013
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Percent
Change
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2014
|
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2013
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Percent
Change
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Walmart U.S.
|
|
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|
$
|
70.601
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|
|
$
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68.728
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2.7
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%
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$
|
138.453
|
|
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$
|
135.281
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2.3
|
%
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Walmart International
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33.872
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32.841
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3.1
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%
|
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66.296
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|
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65.730
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0.9
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%
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Sam’s Club
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14.863
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|
|
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14.532
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2.3
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%
|
|
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28.754
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|
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28.403
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|
1.2
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%
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Consolidated
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$
|
119.336
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|
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$
|
116.101
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2.8
|
%
|
|
|
$
|
233.503
|
|
|
$
|
229.414
|
|
|
1.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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The following explanations provide additional context to the above table.
-
Excluding the impact of currency exchange rate fluctuations, Walmart
International’s net sales for the quarter would have been $34.6
billion, an increase of 5.3 percent over last year. Currency exchange
rate fluctuations negatively impacted net sales by $696 million during
the quarter.
-
Sam’s Club net sales, excluding fuel,1 were $13.0
billion for the quarter, an increase of 1.7 percent over last year.
-
Excluding the impact of currency exchange rate fluctuations,1
consolidated net sales would have increased 3.4 percent during the
quarter to $120.0 billion.
“We delivered net sales growth of $1.9 billion in the second quarter,”
said Greg Foran, Walmart U.S. president and CEO. “Our e-commerce
business, including store-fulfilled sales, delivered double-digit sales
growth.”
Segment operating income
Segment
operating income was as follows:
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Three months ended
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Six Months Ended
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|
|
|
July 31,
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|
July 31,
|
|
(dollars in billions)
|
|
|
|
2014
|
|
|
2013
|
|
|
Percent
Change
|
|
|
2014
|
|
|
2013
|
|
|
Percent
Change
|
|
Walmart U.S.
|
|
|
|
$
|
5.252
|
|
|
$
|
5.383
|
|
|
-2.4
|
%
|
|
|
$
|
10.227
|
|
|
$
|
10.580
|
|
|
-3.3
|
%
|
|
Walmart International
|
|
|
|
|
1.489
|
|
|
|
1.379
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|
|
8.0
|
%
|
|
|
|
2.691
|
|
|
|
2.542
|
|
|
5.9
|
%
|
|
Sam's Club
|
|
|
|
|
0.494
|
|
|
|
0.518
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|
|
-4.6
|
%
|
|
|
|
0.973
|
|
|
|
1.008
|
|
|
-3.5
|
%
|
|
Sam's Club (excluding fuel)
|
|
|
|
|
0.466
|
|
|
|
0.519
|
|
|
-10.2
|
%
|
|
|
|
0.943
|
|
|
|
1.003
|
|
|
-6.0
|
%
|
|
|
“We remain focused on price investment across all our markets and expect
to continue driving improved comp performance,” said David Cheesewright,
Walmart International president and CEO. “I am pleased with the trends
in many of our markets, which were driven by a continued focus on being
the lowest cost operator.”
1 See additional information at the end of this
release regarding non-GAAP financial measures.
U.S. comparable store sales review and guidance
“Neighborhood
Markets continued to perform well and delivered an approximate 5.6
percent sales comp for the period,” added Foran. “Comp store traffic
grew 4.1 percent. During the second quarter, we opened 22 Neighborhood
Markets and remain on track to deliver 180 to 200 new units for the
year.”
For the 13-week period ending Oct. 31, 2014, Walmart U.S. expects comp
store sales to be relatively flat. Last year, Walmart’s comp sales
declined 0.3 percent for the 13-week period ended Oct. 25, 2013.
“Our top priority at Sam’s Club remains growth -- growing our member
base and growing sales,” said Rosalind Brewer, Sam’s Club president and
CEO. “We’re taking steps to increase the value of membership through
investments in Plus member cash rewards and the cash back Mastercard.
It’s still early, but member response has been positive.”
Sam’s Club expects comp sales, excluding fuel,1 for
the 13-week period ending Oct. 31, 2014 to be slightly positive. Last
year comp sales, excluding fuel,1 increased 1.1
percent for the 13-week period ended Oct. 25, 2013.
Walmart U.S. and Sam’s Club will report comparable sales for the 13-week
period ending Oct. 31, on Nov. 13, when the company reports third
quarter results.
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 250
million customers and members visit our 11,053 stores under 71 banners
in 27 countries and e-commerce websites in 11 countries. With fiscal
year 2014 sales of over $473 billion, Walmart employs approximately 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.
Notes
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 and related
information 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.
Editor’s Note
High resolution photos
of Walmart U.S. and International operations are available for download
at 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
forecast of the company’s diluted earnings per share from continuing
operations attributable to Walmart for the fiscal year ending Jan. 31,
2015 and the three months ending Oct. 31, 2014, the company’s full-year
effective tax rate for the fiscal year ending Jan. 31, 2015, the
company’s effective tax rate for the three months ended Oct. 31, 2014,
and the comparable store sales of the Walmart U.S. segment and the
comparable club sales, excluding fuel, of the Sam’s Club segment for the
13-week period from Aug. 2, 2014 through Oct. 31, 2014 (and assumptions
underlying those forecasts), statements regarding management’s
expectations that the company’s Walmart U.S. operating segment will open
a certain number of Neighborhood Market units during the fiscal year
ending Jan. 31, 2015, the company’s Walmart International operating
segment will continue to drive comparable store sales performance and
that the company’s Sam’s Club operating segment has the objectives of
growth in member base and sales and other statements concerning
Walmart’s objectives and plans 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,”
“assumes,” “expect,” “expected,” “expects,” “forecasted,” “guidance,”
“on track to deliver,” “priority,” “projected,” and “will depend,” 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 the company operates; competitive initiatives
of other retailers and 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; customer traffic in the company’s stores and clubs and on
the company’s e-commerce websites and average ticket size; consumer
acceptance of the company’s merchandise offerings in its stores and
clubs and on the company’s e-commerce websites; consumer acceptance of
the company’s stores and merchandise in the markets in which new units
are opened; consumer shopping patterns in the markets in which the small
store expansion of the Walmart U.S. operating segment occurs; the
disruption of seasonal buying patterns in the United States and other
markets; geo-political conditions and events; changes in the level of
public assistance payments; customer’s acceptance of new initiatives and
programs of the company and its operating segments; weather conditions
and events and their effects; catastrophic events and natural disasters
and their effects; 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
health-care and other benefits; the number of associates enrolling in
Walmart’s health-care plans; the availability and cost of appropriate
locations for new or relocated units; local real estate, zoning, land
use and other laws, ordinances, legal restrictions and initiatives that
may prevent the company from building, relocating, or expanding, or that
impose limitations on the company’s ability to build, relocate or
expand, stores in certain locations; availability of persons with the
necessary skills and abilities necessary to meet the company’s needs for
managing and staffing new units and conducting their operations;
availability of necessary utilities for new units; availability of
skilled labor; delays in construction and other delays in the opening of
new, expanded or relocated units planned to be opened by certain dates;
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-related 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; factors that may affect the company’s effective tax
rate, including the company’s performance, changes in the company’s
assessment of certain tax contingencies, valuation allowances, changes
in law, including the outcome of pending U.S. Congressional actions
regarding the extension of certain tax legislation, outcomes of
administrative audits, the impact of discrete items, and the mix of
earnings among the company’s U.S. and international operations; changes
in generally accepted accounting principles; unanticipated changes in
accounting estimates or judgments; and other risks.
The company discusses certain of the factors described above more fully
in certain of its filings with the SEC, including its most recent annual
report on Form 10-K filed with the SEC (in which the company also
discusses other factors that may affect its operations, results of
operations and comparable store and club sales), and this release should
be read in conjunction with that annual report on Form 10-K, together
with all of the company’s other filings, including its quarterly reports
on Form 10-Q and current reports on Form 8-K, made with the SEC through
the date of this release. The company urges readers to consider all of
these risks, uncertainties and other factors carefully in evaluating the
forward-looking statements contained in this release. As a result of
these matters, changes in facts, assumptions not being realized or other
circumstances, the company’s actual results may differ materially from
the expected results discussed in the forward-looking statements
contained in this release. The forward-looking statements contained in
this release are as of the date of this release, and Walmart undertakes
no obligation to update these forward-looking statements to reflect
subsequent events or circumstances.
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|
|
|
|
|
|
|
|
|
|
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)
|
|
|
|
2014
|
|
|
2013
|
|
|
Percent
Change
|
|
|
2014
|
|
|
2013
|
|
|
Percent
Change
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
$
|
119,336
|
|
|
|
$
|
116,101
|
|
|
|
2.8
|
%
|
|
|
$
|
233,503
|
|
|
|
$
|
229,414
|
|
|
|
1.8
|
%
|
|
Membership and other income
|
|
|
|
|
789
|
|
|
|
|
729
|
|
|
|
8.2
|
%
|
|
|
|
1,582
|
|
|
|
|
1,486
|
|
|
|
6.5
|
%
|
|
Total revenues
|
|
|
|
|
120,125
|
|
|
|
|
116,830
|
|
|
|
2.8
|
%
|
|
|
|
235,085
|
|
|
|
|
230,900
|
|
|
|
1.8
|
%
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
|
|
90,010
|
|
|
|
|
87,420
|
|
|
|
3.0
|
%
|
|
|
|
176,724
|
|
|
|
|
173,411
|
|
|
|
1.9
|
%
|
|
Operating, selling, general and administrative expenses
|
|
|
|
|
23,375
|
|
|
|
|
22,633
|
|
|
|
3.3
|
%
|
|
|
|
45,428
|
|
|
|
|
44,274
|
|
|
|
2.6
|
%
|
|
Operating income
|
|
|
|
|
6,740
|
|
|
|
|
6,777
|
|
|
|
(0.5
|
)%
|
|
|
|
12,933
|
|
|
|
|
13,215
|
|
|
|
(2.1
|
)%
|
|
Interest:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt
|
|
|
|
|
509
|
|
|
|
|
522
|
|
|
|
-2.5
|
%
|
|
|
|
1,040
|
|
|
|
|
1,029
|
|
|
|
1.1
|
%
|
|
Capital leases
|
|
|
|
|
61
|
|
|
|
|
67
|
|
|
|
(9.0
|
)%
|
|
|
|
122
|
|
|
|
|
133
|
|
|
|
(8.3
|
)%
|
|
Interest income
|
|
|
|
|
(32
|
)
|
|
|
|
(37
|
)
|
|
|
(13.5
|
)%
|
|
|
|
(56
|
)
|
|
|
|
(80
|
)
|
|
|
(30.0
|
)%
|
|
Interest, net
|
|
|
|
|
538
|
|
|
|
|
552
|
|
|
|
-2.5
|
%
|
|
|
|
1,106
|
|
|
|
|
1,082
|
|
|
|
2.2
|
%
|
|
Income from continuing operations before income taxes
|
|
|
|
|
6,202
|
|
|
|
|
6,225
|
|
|
|
(0.4
|
)%
|
|
|
|
11,827
|
|
|
|
|
12,133
|
|
|
|
(2.5
|
)%
|
|
Provision for income taxes
|
|
|
|
|
2,113
|
|
|
|
|
2,020
|
|
|
|
4.6
|
%
|
|
|
|
4,027
|
|
|
|
|
3,996
|
|
|
|
0.8
|
%
|
|
Income from continuing operations
|
|
|
|
|
4,089
|
|
|
|
|
4,205
|
|
|
|
(2.8
|
)%
|
|
|
|
7,800
|
|
|
|
|
8,137
|
|
|
|
(4.1
|
)%
|
|
Income from discontinued operations, net of income taxes
|
|
|
|
|
270
|
|
|
|
|
10
|
|
|
|
2,600.0
|
%
|
|
|
|
285
|
|
|
|
|
23
|
|
|
|
1,139.1
|
%
|
|
Consolidated net income
|
|
|
|
|
4,359
|
|
|
|
|
4,215
|
|
|
|
3.4
|
%
|
|
|
|
8,085
|
|
|
|
|
8,160
|
|
|
|
(0.9
|
)%
|
|
Less consolidated net income attributable to noncontrolling interest
|
|
|
|
|
(266
|
)
|
|
|
|
(146
|
)
|
|
|
82.2
|
%
|
|
|
|
(399
|
)
|
|
|
|
(307
|
)
|
|
|
30.0
|
%
|
|
Consolidated net income attributable to Walmart
|
|
|
|
$
|
4,093
|
|
|
|
$
|
4,069
|
|
|
|
0.6
|
%
|
|
|
$
|
7,686
|
|
|
|
$
|
7,853
|
|
|
|
(2.1
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations attributable to Walmart:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
|
$
|
4,089
|
|
|
|
$
|
4,205
|
|
|
|
(2.8
|
)%
|
|
|
$
|
7,800
|
|
|
|
$
|
8,137
|
|
|
|
(4.1
|
)%
|
|
Less income from continuing operations attributable to
noncontrolling interest
|
|
|
|
|
(166
|
)
|
|
|
|
(143
|
)
|
|
|
16.1
|
%
|
|
|
|
(295
|
)
|
|
|
|
(300
|
)
|
|
|
(1.7
|
)%
|
|
Income from continuing operations attributable to Walmart
|
|
|
|
$
|
3,923
|
|
|
|
$
|
4,062
|
|
|
|
(3.4
|
)%
|
|
|
$
|
7,505
|
|
|
|
$
|
7,837
|
|
|
|
(4.2
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per common share from continuing operations
attributable to Walmart
|
|
|
|
$
|
1.22
|
|
|
|
$
|
1.24
|
|
|
|
(1.6
|
)%
|
|
|
$
|
2.32
|
|
|
|
$
|
2.38
|
|
|
|
(2.5
|
)%
|
|
Basic income per common share from discontinued operations
attributable to Walmart
|
|
|
|
|
0.05
|
|
|
|
|
0.01
|
|
|
|
400.0
|
%
|
|
|
|
0.06
|
|
|
|
|
0.01
|
|
|
|
500.0
|
%
|
|
Basic net income per common share attributable to Walmart
|
|
|
|
$
|
1.27
|
|
|
|
$
|
1.25
|
|
|
|
1.6
|
%
|
|
|
$
|
2.38
|
|
|
|
$
|
2.39
|
|
|
|
(0.4
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income per common share from continuing operations
attributable to Walmart
|
|
|
|
$
|
1.21
|
|
|
|
$
|
1.23
|
|
|
|
(1.6
|
)%
|
|
|
$
|
2.31
|
|
|
|
$
|
2.37
|
|
|
|
(2.5
|
)%
|
|
Diluted income per common share from discontinued operations
attributable to Walmart
|
|
|
|
|
0.05
|
|
|
|
|
0.01
|
|
|
|
400.0
|
%
|
|
|
|
0.06
|
|
|
|
|
0.01
|
|
|
|
500.0
|
%
|
|
Diluted net income per common share attributable to Walmart
|
|
|
|
$
|
1.26
|
|
|
|
$
|
1.24
|
|
|
|
1.6
|
%
|
|
|
$
|
2.37
|
|
|
|
$
|
2.38
|
|
|
|
(0.4
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
3,230
|
|
|
|
|
3,278
|
|
|
|
|
|
|
|
3,231
|
|
|
|
|
3,290
|
|
|
|
|
|
Diluted
|
|
|
|
|
3,241
|
|
|
|
|
3,291
|
|
|
|
|
|
|
|
3,244
|
|
|
|
|
3,305
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1.92
|
|
|
|
$
|
1.88
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wal-Mart Stores, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUBJECT TO RECLASSIFICATION
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in millions)
|
|
|
|
July 31,
|
|
|
January 31,
|
|
|
July 31,
|
|
ASSETS
|
|
|
|
2014
|
|
|
2014
|
|
|
2013
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
6,184
|
|
|
|
$
|
7,281
|
|
|
|
$
|
9,016
|
|
|
Receivables, net
|
|
|
|
|
6,146
|
|
|
|
|
6,677
|
|
|
|
|
5,996
|
|
|
Inventories
|
|
|
|
|
45,451
|
|
|
|
|
44,858
|
|
|
|
|
42,793
|
|
|
Prepaid expenses and other
|
|
|
|
|
1,851
|
|
|
|
|
1,909
|
|
|
|
|
2,197
|
|
|
Current assets of discontinued operations
|
|
|
|
|
—
|
|
|
|
|
460
|
|
|
|
|
—
|
|
|
Total current assets
|
|
|
|
|
59,632
|
|
|
|
|
61,185
|
|
|
|
|
60,002
|
|
|
Property and equipment:
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment
|
|
|
|
|
177,975
|
|
|
|
|
173,089
|
|
|
|
|
168,086
|
|
|
Less accumulated depreciation
|
|
|
|
|
(61,709
|
)
|
|
|
|
(57,725
|
)
|
|
|
|
(54,724
|
)
|
|
Property and equipment, net
|
|
|
|
|
116,266
|
|
|
|
|
115,364
|
|
|
|
|
113,362
|
|
|
Property under capital leases:
|
|
|
|
|
|
|
|
|
|
|
|
Property under capital leases
|
|
|
|
|
5,549
|
|
|
|
|
5,589
|
|
|
|
|
5,763
|
|
|
Less accumulated amortization
|
|
|
|
|
(3,092
|
)
|
|
|
|
(3,046
|
)
|
|
|
|
(3,131
|
)
|
|
Property under capital leases, net
|
|
|
|
|
2,457
|
|
|
|
|
2,543
|
|
|
|
|
2,632
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
|
|
19,758
|
|
|
|
|
19,510
|
|
|
|
|
19,280
|
|
|
Other assets and deferred charges
|
|
|
|
|
5,872
|
|
|
|
|
6,149
|
|
|
|
|
5,693
|
|
|
Total assets
|
|
|
|
$
|
203,985
|
|
|
|
$
|
204,751
|
|
|
|
$
|
200,969
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Short-term borrowings
|
|
|
|
$
|
3,516
|
|
|
|
$
|
7,670
|
|
|
|
$
|
8,639
|
|
|
Accounts payable
|
|
|
|
|
36,828
|
|
|
|
|
37,415
|
|
|
|
|
36,701
|
|
|
Dividends payable
|
|
|
|
|
3,100
|
|
|
|
|
—
|
|
|
|
|
3,141
|
|
|
Accrued liabilities
|
|
|
|
|
18,237
|
|
|
|
|
18,793
|
|
|
|
|
18,616
|
|
|
Accrued income taxes
|
|
|
|
|
511
|
|
|
|
|
966
|
|
|
|
|
116
|
|
|
Long-term debt due within one year
|
|
|
|
|
4,659
|
|
|
|
|
4,103
|
|
|
|
|
4,692
|
|
|
Obligations under capital leases due within one year
|
|
|
|
|
301
|
|
|
|
|
309
|
|
|
|
|
309
|
|
|
Current liabilities of discontinued operations
|
|
|
|
|
—
|
|
|
|
|
89
|
|
|
|
|
—
|
|
|
Total current liabilities
|
|
|
|
|
67,152
|
|
|
|
|
69,345
|
|
|
|
|
72,214
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
|
43,004
|
|
|
|
|
41,771
|
|
|
|
|
40,678
|
|
|
Long-term obligations under capital leases
|
|
|
|
|
2,695
|
|
|
|
|
2,788
|
|
|
|
|
2,907
|
|
|
Deferred income taxes and other
|
|
|
|
|
8,311
|
|
|
|
|
8,017
|
|
|
|
|
7,989
|
|
|
Redeemable noncontrolling interest
|
|
|
|
|
—
|
|
|
|
|
1,491
|
|
|
|
|
495
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
|
|
323
|
|
|
|
|
323
|
|
|
|
|
327
|
|
|
Capital in excess of par value
|
|
|
|
|
2,208
|
|
|
|
|
2,362
|
|
|
|
|
3,432
|
|
|
Retained earnings
|
|
|
|
|
77,172
|
|
|
|
|
76,566
|
|
|
|
|
70,791
|
|
|
Accumulated other comprehensive income (loss)
|
|
|
|
|
(1,957
|
)
|
|
|
|
(2,996
|
)
|
|
|
|
(2,889
|
)
|
|
Total Walmart shareholders’ equity
|
|
|
|
|
77,746
|
|
|
|
|
76,255
|
|
|
|
|
71,661
|
|
|
Nonredeemable noncontrolling interest
|
|
|
|
|
5,077
|
|
|
|
|
5,084
|
|
|
|
|
5,025
|
|
|
Total equity
|
|
|
|
|
82,823
|
|
|
|
|
81,339
|
|
|
|
|
76,686
|
|
|
Total liabilities and equity
|
|
|
|
$
|
203,985
|
|
|
|
$
|
204,751
|
|
|
|
$
|
200,969
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wal-Mart Stores, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
SUBJECT TO RECLASSIFICATION
|
|
|
|
July 31,
|
|
(Dollars in millions)
|
|
|
|
2014
|
|
|
2013
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
Consolidated net income
|
|
|
|
$
|
8,085
|
|
|
|
$
|
8,160
|
|
|
(Income) loss from discontinued operations, net of income taxes
|
|
|
|
|
(285
|
)
|
|
|
|
(23
|
)
|
|
Income from continuing operations
|
|
|
|
|
7,800
|
|
|
|
|
8,137
|
|
|
Adjustments to reconcile consolidated net income to net cash
provided by operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
4,527
|
|
|
|
|
4,402
|
|
|
Deferred income taxes
|
|
|
|
|
79
|
|
|
|
|
475
|
|
|
Other operating activities
|
|
|
|
|
667
|
|
|
|
|
(166
|
)
|
|
Changes in certain assets and liabilities:
|
|
|
|
|
|
|
|
|
Receivables, net
|
|
|
|
|
704
|
|
|
|
|
445
|
|
|
Inventories
|
|
|
|
|
(403
|
)
|
|
|
|
569
|
|
|
Accounts payable
|
|
|
|
|
(420
|
)
|
|
|
|
(324
|
)
|
|
Accrued liabilities
|
|
|
|
|
(596
|
)
|
|
|
|
(209
|
)
|
|
Accrued income taxes
|
|
|
|
|
(458
|
)
|
|
|
|
(2,078
|
)
|
|
Net cash provided by operating activities
|
|
|
|
|
11,900
|
|
|
|
|
11,251
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
Payments for property and equipment
|
|
|
|
|
(5,113
|
)
|
|
|
|
(6,066
|
)
|
|
Proceeds from the disposal of property and equipment
|
|
|
|
|
90
|
|
|
|
|
112
|
|
|
Proceeds from disposal of certain operations
|
|
|
|
|
671
|
|
|
|
|
—
|
|
|
Other investing activities
|
|
|
|
|
12
|
|
|
|
|
(83
|
)
|
|
Net cash used in investing activities
|
|
|
|
|
(4,340
|
)
|
|
|
|
(6,037
|
)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Net change in short-term borrowings
|
|
|
|
|
(4,130
|
)
|
|
|
|
1,869
|
|
|
Proceeds from issuance of long-term debt
|
|
|
|
|
4,565
|
|
|
|
|
5,326
|
|
|
Payments of long-term debt
|
|
|
|
|
(2,868
|
)
|
|
|
|
(3,386
|
)
|
|
Dividends paid
|
|
|
|
|
(3,094
|
)
|
|
|
|
(3,092
|
)
|
|
Purchase of Company stock
|
|
|
|
|
(933
|
)
|
|
|
|
(4,096
|
)
|
|
Dividends paid to noncontrolling interest
|
|
|
|
|
(339
|
)
|
|
|
|
(358
|
)
|
|
Purchase of noncontrolling interest
|
|
|
|
|
(1,720
|
)
|
|
|
|
(152
|
)
|
|
Other financing activities
|
|
|
|
|
(236
|
)
|
|
|
|
13
|
|
|
Net cash used in financing activities
|
|
|
|
|
(8,755
|
)
|
|
|
|
(3,876
|
)
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rates on cash and cash equivalents
|
|
|
|
|
98
|
|
|
|
|
(103
|
)
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
|
|
(1,097
|
)
|
|
|
|
1,235
|
|
|
Cash and cash equivalents at beginning of year
|
|
|
|
|
7,281
|
|
|
|
|
7,781
|
|
|
Cash and cash equivalents at end of period
|
|
|
|
$
|
6,184
|
|
|
|
$
|
9,016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 possible short-term impacts.
ROI was 16.6 percent and 17.9 percent for the trailing 12 months ended
July 31, 2014 and 2013, respectively. The decline in ROI was primarily
due to the decrease in operating income, as well as our continued
capital investment in store growth and e-commerce.
We define ROI as adjusted operating income (operating income plus
interest income, depreciation and amortization, and rent expense) for
the trailing 12 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 12 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 income from continuing
operations for the period divided by average total assets of continuing
operations for the period) because ROI: adjusts operating income to
exclude certain expense items and adds interest income; adjusts total
assets of continuing operations 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 management
to calculate our ROI may differ from the methods used by other companies
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)
|
|
|
2014
|
|
|
2013
|
|
CALCULATION OF RETURN ON INVESTMENT
|
|
Numerator
|
|
|
|
|
|
|
|
Operating income
|
|
|
$
|
26,590
|
|
|
|
$
|
27,888
|
|
|
+ Interest income
|
|
|
|
95
|
|
|
|
|
177
|
|
|
+ Depreciation and amortization
|
|
|
|
8,995
|
|
|
|
|
8,659
|
|
|
+ Rent
|
|
|
|
2,896
|
|
|
|
|
2,642
|
|
|
Adjusted operating income
|
|
|
$
|
38,576
|
|
|
|
$
|
39,366
|
|
|
|
|
|
|
|
|
|
|
Denominator
|
|
|
|
|
|
|
|
Average total assets of continuing operations1
|
|
|
$
|
202,477
|
|
|
|
$
|
198,315
|
|
|
+ Average accumulated depreciation and amortization1
|
|
|
|
61,328
|
|
|
|
|
54,993
|
|
|
- Average accounts payable1
|
|
|
|
36,765
|
|
|
|
|
36,384
|
|
|
- Average accrued liabilities1
|
|
|
|
18,427
|
|
|
|
|
18,197
|
|
|
+ Rent x 8
|
|
|
|
23,168
|
|
|
|
|
21,136
|
|
|
Average invested capital
|
|
|
$
|
231,781
|
|
|
|
$
|
219,863
|
|
|
Return on investment (ROI)
|
|
|
|
16.6
|
%
|
|
|
|
17.9
|
%
|
|
|
|
|
|
|
|
|
|
CALCULATION OF RETURN ON ASSETS
|
|
Numerator
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
$
|
16,214
|
|
|
|
$
|
17,809
|
|
|
Denominator
|
|
|
|
|
|
|
|
Average total assets of continuing operations1
|
|
|
$
|
202,477
|
|
|
|
$
|
198,315
|
|
|
Return on assets (ROA)
|
|
|
|
8.0
|
%
|
|
|
|
9.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of July 31,
|
|
Certain Balance Sheet Data
|
|
|
|
2014
|
|
|
2013
|
|
|
2012
|
|
Total assets of continuing operations
|
|
|
|
$
|
203,985
|
|
|
$
|
200,969
|
|
|
|
$
|
195,661
|
|
|
Accumulated depreciation and amortization
|
|
|
|
|
64,801
|
|
|
|
57,855
|
|
|
|
|
52,131
|
|
|
Accounts payable
|
|
|
|
|
36,828
|
|
|
|
36,701
|
|
|
|
|
36,067
|
|
|
Accrued liabilities
|
|
|
|
|
18,237
|
|
|
|
18,616
|
|
|
|
|
17,777
|
|
|
|
|
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 $6.8 billion and $5.2 billion for the six months
ended July 31, 2014 and 2013, respectively. The increase in free cash
flow was primarily due to the timing of income tax payments and capital
expenditures.
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 income from continuing operations
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 Walmart’s management to calculate our free cash flow may
differ from the methods used by other companies 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)
|
|
|
|
2014
|
|
|
2013
|
|
Net cash provided by operating activities
|
|
|
|
$
|
11,900
|
|
|
|
$
|
11,251
|
|
|
Payments for property and equipment
|
|
|
|
|
(5,113
|
)
|
|
|
|
(6,066
|
)
|
|
Free cash flow
|
|
|
|
$
|
6,787
|
|
|
|
$
|
5,185
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities1
|
|
|
|
$
|
(4,340
|
)
|
|
|
$
|
(6,037
|
)
|
|
Net cash used in financing activities
|
|
|
|
$
|
(8,755
|
)
|
|
|
$
|
(3,876
|
)
|
|
|
|
|
|
|
|
|
|
|
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, if any, 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,
2014.
|
|
|
|
|
|
|
Three Months Ended July 31, 2014
|
|
|
Six Months Ended July 31, 2014
|
|
|
|
|
|
International
|
|
|
Consolidated
|
|
|
International
|
|
|
Consolidated
|
|
(Dollars in millions)
|
|
|
|
2014
|
|
|
Percent
Change
|
|
|
2014
|
|
|
Percent
Change
|
|
|
2014
|
|
|
Percent
Change
|
|
|
2014
|
|
|
Percent
Change
|
|
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported
|
|
|
|
$
|
33,872
|
|
|
3.1
|
%
|
|
|
$
|
119,336
|
|
|
2.8
|
%
|
|
|
$
|
66,296
|
|
|
0.9
|
%
|
|
|
$
|
233,503
|
|
|
1.8
|
%
|
|
Currency exchange rate fluctuations1
|
|
|
|
|
696
|
|
|
|
|
|
|
696
|
|
|
|
|
|
|
2,272
|
|
|
|
|
|
|
2,272
|
|
|
|
|
|
|
|
|
|
34,568
|
|
|
|
|
|
|
120,032
|
|
|
|
|
|
|
68,568
|
|
|
|
|
|
|
235,775
|
|
|
|
|
Net sales from acquisitions
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
Constant currency net sales
|
|
|
|
$
|
34,568
|
|
|
5.3
|
%
|
|
|
$
|
120,032
|
|
|
3.4
|
%
|
|
|
$
|
68,568
|
|
|
4.3
|
%
|
|
|
$
|
235,775
|
|
|
2.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported
|
|
|
|
$
|
1,489
|
|
|
8.0
|
%
|
|
|
$
|
6,740
|
|
|
(0.5
|
)%
|
|
|
$
|
2,691
|
|
|
5.9
|
%
|
|
|
$
|
12,933
|
|
|
(2.1
|
)%
|
|
Currency exchange rate fluctuations1
|
|
|
|
|
18
|
|
|
|
|
|
|
18
|
|
|
|
|
|
|
41
|
|
|
|
|
|
|
41
|
|
|
|
|
|
|
|
|
|
1,507
|
|
|
|
|
|
|
6,758
|
|
|
|
|
|
|
2,732
|
|
|
|
|
|
|
12,974
|
|
|
|
|
Operating income (loss) from acquisitions
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
Constant currency operating income
|
|
|
|
$
|
1,507
|
|
|
9.3
|
%
|
|
|
$
|
6,758
|
|
|
(0.3
|
)%
|
|
|
$
|
2,732
|
|
|
7.5
|
%
|
|
|
$
|
12,974
|
|
|
(1.8
|
)%
|
|
|
|
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 13-week and 26-week periods ended Aug.
1, 2014 and Jul. 26, 2013, the projected comparable club sales of
Sam’s Club for the 13 weeks ending Oct. 31, 2014 and the comparable
club sales of Sam’s Club for the 13 weeks ended Oct. 25, 2013, in each
case calculated by excluding Sam’s Club’s fuel sales for such periods
(the “Sam’s Club Comparable Sales Measures”);
-
the net sales of Sam’s Club for the three months ended Jul. 31, 2014
and the percentage increase in the net sales of Sam’s Club for the
three months ended Jul. 31, 2014 over the net sales of Sam’s Club for
the three months ended Jul. 31, 2013 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 and six
months ended Jul. 31, 2014 and 2013 and the percentage decrease in the
segment operating income of Sam’s Club for the three and six months
ended Jul. 31, 2014 over the segment operating income of Sam’s Club
for the three and six months ended Jul. 31, 2013, in each case
calculated by excluding Sam’s Club’s fuel sales for the relevant
period (collectively with the financial measures described in the
immediately preceding bullet point, the “Sam’s Club Measures”).
We believe the Sam’s Club comparable club sales for the historical
periods for which the corresponding Sam’s Club Comparable Sales Measures
are presented calculated by including fuel sales are the financial
measures computed in accordance with GAAP most directly comparable to
the respective Sam’s Club Comparable Sales Measures. We believe Sam’s
Club’s projected comparable club sales for the 13-week period ending
Oct. 31, 2014 calculated by including fuel sales 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-week period
ending Oct. 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 Sam’s Club Measures.
We believe that the presentation of the Sam’s Club 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 2014