- Wal-Mart Stores, Inc. (Walmart) reported third quarter diluted
earnings per share from continuing operations (EPS) of $1.15, within
guidance of $1.10 to $1.20. This compared to last year's $1.14.
- Walmart U.S. comp sales increased 0.5 percent for the 13-week
period ended Oct. 31, 2014. Comp sales for the Neighborhood Market
format increased approximately 5.5 percent. Walmart U.S. net sales
increased $2.3 billion, or 3.4 percent, to approximately $70.0 billion.
- Consolidated net sales increased $3.2 billion, or 2.8 percent, to
$118.1 billion.
- Walmart updated its full year EPS guidance to a range of $4.92 to
$5.02, which includes an estimated negative impact of approximately
$0.03 per share related to the future closure of underperforming
stores in Walmart Japan. The company's previous guidance was $4.90 to
$5.15. Last year, Walmart reported full year EPS of $4.85, which
included approximately $0.26 in certain discrete items that impacted
the fourth quarter. Last year's underlying1
EPS was $5.11.
- Walmart forecasts fourth quarter EPS between $1.46 and $1.56, which
includes an estimated negative impact of approximately $0.03 per share
related to the future closure of underperforming stores in Walmart
Japan. Last year, Walmart reported fourth quarter EPS of $1.34, which
included approximately $0.26 in discrete items. Last year's underlying1
EPS was $1.60.
- Walmart International grew net sales 1.7 percent to $33.7 billion.
On a constant currency basis,1 net sales
would have increased 2.9 percent to $34.1 billion.
- Sam's Club comp sales, without fuel,1
increased 0.4 percent for the 13-week period ended Oct. 31. Sam's Club
increased membership income 10.1 percent for the quarter, and grew
operating income more than twice the rate of sales growth.
- E-commerce sales globally increased approximately 21 percent on a
constant currency basis.
1 See additional information at the end of this
release regarding non-GAAP financial measures.
Company Website:
http://www.stock.walmart.com
BENTONVILLE, Ark. -- (Business Wire)
Wal-Mart Stores, Inc. (NYSE: WMT) today reported financial results for
the third quarter ended October 31, 2014. Consolidated net sales for the
third quarter were $118.1 billion, an increase of 2.8 percent over last
year. This quarter included the negative impact of approximately $396
million from currency exchange rate fluctuations. On a constant currency
basis,1 net sales would have increased 3.1 percent to
$118.5 billion. Membership and other income increased 13.9 percent
versus last year. Total revenue was $119.0 billion, an increase of
approximately $3.3 billion, or 2.9 percent.
Consolidated net income attributable to Walmart was $3.7 billion, a
decrease of 0.7 percent. Diluted earnings per share from continuing
operations attributable to Walmart were $1.15, or 0.9 percent above last
year's $1.14. Additionally, the company's effective tax rate was 31.8
percent, below the previous guidance of around 34 percent, due to
certain discrete tax matters. While the company benefited in the quarter
from a lower than anticipated tax rate, the benefit was offset by a
number of discrete charges. Operating expenses were impacted by an
organizational restructuring in the U.K. and the Hurricane Odile losses
in Mexico. Net interest expense was impacted as a result of
reclassifying certain store leases from operating leases to capital
leases.
"Walmart reported solid earnings per share of $1.15 in the third
quarter," said Doug McMillon, Wal-Mart Stores, Inc. president and CEO.
"The highlights for the quarter include the positive comp in Walmart
U.S., including the strong performance from Neighborhood Markets, the 21
percent increase in e-commerce sales globally and the profit
performances from Sam's Club and our International business."
McMillon stressed the need to strengthen Walmart's sales growth and
improve the customer experience, both in stores and online.
"We're investing in key areas of our business, including wages in our
U.S. stores and in e-commerce and mobile capabilities. We continue to
see opportunities to improve our business," he added. "Being the price
leader is an ongoing priority for us and a commitment to customers. As
with every year, that is even more important during the holiday season.
We have some things in our favor this fourth quarter, including lower
fuel prices in the U.S. and other key markets, and we're set to deliver
for customers during this time."
"Our earnings per share guidance assumes several important factors,
including the economic conditions in several of our largest markets, and
a highly promotional holiday season," said Charles Holley, executive
vice president and chief financial officer. "As a reminder, our full
year EPS guidance includes the four factors we discussed last quarter,
which were higher U.S. health-care costs, incremental investments in
e-commerce, ongoing investments in Sam's Club, and our effective tax
rate. We anticipate our full year effective tax rate will range between
32 and 34 percent.
1 See additional information at the end of this
release regarding non-GAAP financial measures.
"While historically our tax rate tends to moderate toward the end of the
fiscal year, it is important to remember that assessments of certain tax
contingencies, valuation allowances, changes in tax law, outcomes of
administrative audits and the impact of discrete items could affect our
rate," added Holley. "We are monitoring progress in Congress with
respect to the extension of certain U.S. income tax legislation that
expired at the end of calendar year 2013, which if not passed, could
drive our effective tax rate toward the high end of our estimated range
for the full year.
"Taking all of these factors into account, we are forecasting EPS for
the fourth quarter between $1.46 and $1.56," said Holley," and EPS for
the full year to range between $4.92 and $5.02, which compares to our
previous guidance of $4.90 to $5.15. These ranges include our estimate
of approximately $0.03 per share in charges related to the previously
announced future closure of underperforming stores in Walmart Japan."
The company paid $1.5 billion in dividends and repurchased approximately
1.1 million shares for $82 million in the third quarter. In total, the
company returned approximately $1.6 billion to shareholders through
dividends and share repurchases.
Return on investment1 (ROI) for the trailing 12-months
ended Oct. 31, 2014 was 16.4 percent, compared to 17.5 percent for the
prior comparable period. The decrease in ROI was primarily due to lower
operating income, as well as ongoing capital investment in store growth
and e-commerce initiatives.
Free cash flow1 was $7.2 billion for the nine months
ended Oct. 31, 2014, compared to $3.8 billion in the prior year. The
increase in free cash flow was primarily due to the timing of income tax
payments and capital expenditures.
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. 31, 2014 and
Oct. 25, 2013 as follows:
|
|
| |
|
| |
|
| |
| | |
Without Fuel
| | |
With Fuel
| | |
Fuel Impact
|
| | |
13 Weeks Ended
| | |
13 Weeks Ended
| | |
13 Weeks Ended
|
| | |
10/31/2014
|
|
|
10/25/2013
| | |
10/31/2014
|
|
|
10/25/2013
| | |
10/31/2014
|
|
|
10/25/2013
|
Walmart U.S.
| | |
0.5%
|
|
|
-0.3%
| | |
0.5%
|
|
|
-0.3%
| | |
0.0%
|
| |
0.0%
|
Sam's Club
| | |
0.4%
|
|
|
1.1%
| | |
0.3%
|
|
|
0.1%
| | |
-0.1%
|
|
|
-1.0%
|
Total U.S.
| | |
0.5%
|
|
|
-0.1%
| | |
0.5%
|
|
|
-0.2%
| | |
0.0%
|
|
|
-0.1%
|
| | | | | | | | | | | | | | | | | |
|
| | |
Without Fuel
| | |
With Fuel
| | |
Fuel Impact
|
| | |
39 Weeks Ended
| | |
39 Weeks Ended
| | |
39 Weeks Ended
|
| | |
10/31/2014
|
|
|
10/25/2013
| | |
10/31/2014
|
|
|
10/25/2013
| | |
10/31/2014
|
|
|
10/25/2013
|
Walmart U.S.
| | |
0.1%
| | |
-0.7%
| | |
0.1%
| | |
-0.7%
| | |
0.0%
| | |
0.0%
|
Sam's Club
| | |
0.0%
|
|
|
1.0%
| | |
0.0%
|
|
|
0.5%
| | |
0.0%
|
|
|
-0.5%
|
Total U.S.
| | |
0.1%
|
|
|
-0.4%
| | |
0.1%
|
|
|
-0.5%
| | |
0.0%
|
|
|
-0.1%
|
| | | | | | | | | | | | | | | | | |
|
1 See additional information at the end of this
release regarding non-GAAP financial measures.
During the 13-week period, Walmart U.S. comp traffic decreased 0.7
percent, while average ticket increased 1.2 percent.
Excluding fuel,1 Sam's Club comp traffic was up 0.2
percent, and average ticket increased 0.2 percent.
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. E-commerce sales positively impacted comp sales in Walmart U.S.
by approximately 20 basis points, and positively impacted Sam's Club
comp sales by approximately 20 basis points for the 13-week period.
Net sales, including fuel, were as follows:
|
|
| |
|
| |
| | |
Three Months Ended
| | |
Nine Months Ended
|
| | |
October 31,
| | |
October 31,
|
(dollars in billions) | | |
2014
|
|
|
2013
|
|
|
Percent Change
| | |
2014
|
|
|
2013
|
|
|
Percent Change
|
Walmart U.S.
| | |
$
|
70.025
|
|
|
$
|
67.692
|
|
|
3.4
|
%
| | |
$
|
208.478
|
|
|
$
|
202.973
|
|
|
2.7
|
%
|
Walmart International
| | |
33.659
| | |
33.109
| | |
1.7
|
%
| | |
99.955
| | |
98.839
| | |
1.1
|
%
|
Sam's Club
| | |
14.392
|
|
|
14.075
|
|
|
2.3
|
%
| | |
43.146
|
|
|
42.478
|
|
|
1.6
|
%
|
Consolidated
| | |
$
|
118.076
|
|
|
$
|
114.876
|
|
|
2.8
|
%
| | |
$
|
351.579
|
|
|
$
|
344.290
|
|
|
2.1
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | |
|
The following explanations provide additional context to the above table.
-
On a constant currency basis,1 Walmart
International's net sales for the quarter would have been $34.1
billion, an increase of 2.9 percent over last year. Currency exchange
rate fluctuations negatively impacted net sales by $396 million.
-
Sam's Club net sales, excluding fuel,1 were $12.7
billion, an increase of 2.3 percent over last year.
-
On a constant currency basis,1 consolidated net
sales would have increased 3.1 percent to $118.5 billion.
"We had several merchandise categories driving top-line growth," said
Greg Foran, Walmart U.S. president and CEO. "I'm encouraged by our
performance during key seasonal events. We had strong back-to-school
results in apparel, home and school supplies, and we ended the quarter
well by executing a strong Halloween event."
1 See additional information at the end of this
release regarding non-GAAP financial measures.
Segment operating income was as follows:
|
|
| |
|
| |
| | |
Three Months Ended
| | |
Nine Months Ended
|
| | |
October 31,
| | |
October 31,
|
(dollars in billions) | | |
2014
|
|
|
2013
|
|
|
Percent Change
| | |
2014
|
|
|
2013
|
|
|
Percent Change
|
Walmart U.S.
| | |
$
|
4.932
|
|
|
$
|
4.991
|
|
|
-1.2
|
%
| | |
$
|
15.159
|
|
|
$
|
15.571
|
|
|
-2.6
|
%
|
Walmart International
| | |
1.430
| | |
1.379
| | |
3.7
|
%
| | |
4.121
| | |
3.921
| | |
5.1
|
%
|
Sam's Club
| | |
0.493
|
|
|
0.440
|
|
|
12.0
|
%
| | |
1.466
|
|
|
1.448
|
|
|
1.2
|
%
|
Sam's Club (excluding fuel)
| | |
0.455
|
|
|
0.432
|
|
|
5.3
|
%
| | |
1.398
|
|
|
1.435
|
|
|
-2.6
|
%
|
| | | | | | | | | | | | | | | | | | | |
|
"We're being purposeful to have the right balance of wages to serve
customers. We're focused on improving customer service, particularly for
the holiday season," said Foran. "Overall, operating expenses
deleveraged 10 basis points, and coupled with the decline in gross
margin rate, led to a 1.2 percent decrease in operating income."
"We had a solid third quarter, once again growing operating income
faster than sales, and we gained share in most of our largest markets,"
said David Cheesewright, Walmart International president and CEO. "I'm
excited about the steps we've taken to accelerate growth in e-commerce,
including the launch of new expanded assortments and services in Mexico
and China. We also expanded the number of collection points for online
customers in the U.K. and China."
"Although we lapped the fee increase from last year, our membership
income growth remained strong at 10.1 percent," said Rosalind Brewer,
Sam's Club president and CEO. "Clearly, our members responded positively
to our efforts to enhance membership value."
U.S. comparable store sales review and guidance
|
"Our 0.5 percent comp was the first positive comp in seven quarters. Our
overall grocery comp, which includes food and consumables, was
relatively flat," Foran said. "Comp sales were positively impacted by
net inflation, but were negatively affected by SNAP-related headwinds.
"I'm pleased by our Neighborhood Market performance, which reported an
approximately 5.5 percent comp for the quarter," explained Foran. "We
continued to see sales increases in Neighborhood Market pharmacy and
strong growth in consumables, as we focused on in-stock and optimizing
the store with relevant offerings for the customer."
For the 13-week period ending Jan. 30, 2015, Walmart U.S. expects comp
store sales to be between flat and 1 percent. Last year, Walmart's comp
sales declined 0.4 percent for the 14-week period ended Jan. 31, 2014.
"In the third quarter, comps increased 0.4 percent, driven by relatively
balanced growth in traffic and ticket," said Brewer. "We were pleased to
see a cumulative comp improvement of 90 basis points over the 39-week
period, and we are working even faster to infuse newness in our business
to drive membership value."
Sam's Club expects comp sales, excluding fuel,1 for
the 13-week period ending Jan. 30, 2015 to be between flat and 2
percent. Last year, comp sales, excluding fuel,1
decreased 0.1 percent for the 14-week period ended Jan. 31, 2014.
Walmart U.S. and Sam's Club will report comparable sales for the 13-week
period ending Jan. 30, 2015 on Feb. 19, when the company reports fourth
quarter and fiscal year 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 11,156 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.
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.
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 forecasts and projections 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 Jan. 31,
2015, the effect on such earnings per share for such periods of charges
expected to be taken by the company in connection with the closure of
underperforming stores in Walmart Japan, the company's effective tax
rate for the fiscal year ending Jan. 31, 2015, 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
Nov. 1, 2014 through Jan. 30, 2015 (and assumptions underlying those
forecasts), 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
"anticipate," "EPS guidance," "estimate," "estimated," "expects,"
"forecasting," "forecasts," "guidance," 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, including unemployment and underemployment in those
markets; 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 e-commerce websites in various markets; 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 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 and diesel fuel; 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; delays in the opening of new, expanded or
relocated units planned to be opened during the three months ending Jan.
31, 2015; any unanticipated pre-opening costs incurred in connection
with the opening of new stores in the three months ending Jan. 31, 2015;
unanticipated costs associated with the closure of underperforming
stores in Walmart Japan and the number of such stores that are closed in
the three months ending Jan. 31, 2015; 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 FCPA- and compliance-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. The company cannot
assure you that the results or developments anticipated by the company
and reflected or implied by any forward-looking statement will be
realized or, even if substantially realized, that those results or
developments will result in the expected, forecast or projected
consequences for us or affect us, our operations or our financial
performance as we have expected, forecasted or projected. As a result of
the matters discussed above, 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) | | | |
| 2014 |
| | |
| 2013 |
| | | Percent Change | | |
| 2014 |
| | |
| 2013 |
| | | Percent Change |
Revenues: | | | | | | | | | | | | | | | | | | | |
Net sales
| | | |
$
|
118,076
| | | |
$
|
114,876
| | | |
2.8
|
%
| | |
$
|
351,579
| | | |
$
|
344,290
| | | |
2.1
|
%
|
Membership and other income
| | | |
|
925
|
| | |
|
812
|
| | |
13.9
|
%
| | |
|
2,507
|
| | |
|
2,298
|
| | |
9.1
|
%
|
Total revenues
| | | | |
119,001
| | | | |
115,688
| | | |
2.9
|
%
| | | |
354,086
| | | | |
346,588
| | | |
2.2
|
%
|
Costs and expenses: | | | | | | | | | | | | | | | | | | | |
Cost of sales
| | | | |
89,247
| | | | |
86,687
| | | |
3.0
|
%
| | | |
265,971
| | | | |
260,098
| | | |
2.3
|
%
|
Operating, selling, general and administrative expenses
| | | |
|
23,489
|
| | |
|
22,691
|
| | |
3.5
|
%
| | |
|
68,917
|
| | |
|
66,965
|
| | |
2.9
|
%
|
Operating income | | | | |
6,265
| | | | |
6,310
| | | |
(0.7
|
)%
| | | |
19,198
| | | | |
19,525
| | | |
(1.7
|
)%
|
Interest: | | | | | | | | | | | | | | | | | | | |
Debt
| | | | |
561
| | | | |
527
| | | |
6.5
|
%
| | | |
1,601
| | | | |
1,556
| | | |
2.9
|
%
|
Capital leases
| | | | |
115
| | | | |
65
| | | |
76.9
|
%
| | | |
237
| | | | |
198
| | | |
19.7
|
%
|
Interest income
| | | |
|
(20
|
)
| | |
|
(12
|
)
| | |
66.7
|
%
| | |
|
(76
|
)
| | |
|
(92
|
)
| | |
(17.4
|
)%
|
Interest, net
| | | |
|
656
|
| | |
|
580
|
| | |
13.1
|
%
| | |
|
1,762
|
| | |
|
1,662
|
| | |
6.0
|
%
|
Income from continuing operations before income taxes | | | | |
5,609
| | | | |
5,730
| | | |
(2.1
|
)%
| | | |
17,436
| | | | |
17,863
| | | |
(2.4
|
)%
|
Provision for income taxes
| | | |
|
1,783
|
| | |
|
1,860
|
| | |
(4.1
|
)%
| | |
|
5,810
|
| | |
|
5,856
|
| | |
(0.8
|
)%
|
Income from continuing operations | | | | |
3,826
| | | | |
3,870
| | | |
(1.1
|
)%
| | | |
11,626
| | | | |
12,007
| | | |
(3.2
|
)%
|
Income from discontinued operations, net of income taxes | | | |
|
—
|
| | |
|
15
|
| | |
(100.0
|
)%
| | |
|
285
|
| | |
|
38
|
| | |
650.0
|
%
|
Consolidated net income | | | | |
3,826
| | | | |
3,885
| | | |
(1.5
|
)%
| | | |
11,911
| | | | |
12,045
| | | |
(1.1
|
)%
|
Less consolidated net income attributable to noncontrolling interest
| | | |
|
(115
|
)
| | |
|
(147
|
)
| | |
(21.8
|
)%
| | |
|
(514
|
)
| | |
|
(454
|
)
| | |
13.2
|
%
|
Consolidated net income attributable to Walmart | | | |
$
|
3,711
|
| | |
$
|
3,738
|
| | |
(0.7
|
)%
| | |
$
|
11,397
|
| | |
$
|
11,591
|
| | |
(1.7
|
)%
|
| | | | | | | | | | | | | | | | | | |
|
Income from continuing operations attributable to Walmart: | | | | | | | | | | | | | | | | | | | |
Income from continuing operations
| | | |
$
|
3,826
| | | |
$
|
3,870
| | | |
(1.1
|
)%
| | |
$
|
11,626
| | | |
$
|
12,007
| | | |
(3.2
|
)%
|
Less income from continuing operations attributable to
noncontrolling interest
| | | |
|
(115
|
)
| | |
|
(143
|
)
| | |
(19.6
|
)%
| | |
|
(410
|
)
| | |
|
(443
|
)
| | |
(7.4
|
)%
|
Income from continuing operations attributable to Walmart | | | |
$
|
3,711
|
| | |
$
|
3,727
|
| | |
(0.4
|
)%
| | |
$
|
11,216
|
| | |
$
|
11,564
|
| | |
(3.0
|
)%
|
| | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | |
|
Basic net income per common share: | | | | | | | | | | | | | | | | | | | |
Basic income per common share from continuing operations
attributable to Walmart
| | | |
$
|
1.15
| | | |
$
|
1.14
| | | |
0.9
|
%
| | |
$
|
3.47
| | | |
$
|
3.53
| | | |
(1.7
|
)%
|
Basic income per common share from discontinued operations
attributable to Walmart
| | | |
|
—
|
| | |
|
0.01
|
| | |
(100.0
|
)%
| | |
|
0.06
|
| | |
|
—
|
| | |
100.0
|
%
|
Basic net income per common share attributable to Walmart | | | |
$
|
1.15
|
| | |
$
|
1.15
|
| | |
—
|
%
| | |
$
|
3.53
|
| | |
$
|
3.53
|
| | |
—
|
%
|
| | | | | | | | | | | | | | | | | | |
|
Diluted net income per common share: | | | | | | | | | | | | | | | | | | | |
Diluted income per common share from continuing operations
attributable to Walmart
| | | |
$
|
1.15
| | | |
$
|
1.14
| | | |
0.9
|
%
| | |
$
|
3.46
| | | |
$
|
3.51
| | | |
(1.4
|
)%
|
Diluted income per common share from discontinued operations
attributable to Walmart
| | | |
|
—
|
| | |
|
—
|
| | |
—
|
%
| | |
|
0.05
|
| | |
|
0.01
|
| | |
400.0
|
%
|
Diluted net income per common share attributable to Walmart | | | |
$
|
1.15
|
| | |
$
|
1.14
|
| | |
0.9
|
%
| | |
$
|
3.51
|
| | |
$
|
3.52
|
| | |
(0.3
|
)%
|
| | | | | | | | | | | | | | | | | | |
|
Weighted-average common shares outstanding: | | | | | | | | | | | | | | | | | | | |
Basic
| | | | |
3,229
| | | | |
3,257
| | | | | | | |
3,231
| | | | |
3,279
| | | | |
Diluted
| | | | |
3,240
| | | | |
3,271
| | | | | | | |
3,243
| | | | |
3,293
| | | | |
| | | | | | | | | | | | | | | | | | |
|
Dividends declared per common share | | | | | | | | | | | | |
$
|
1.92
| | | |
$
|
1.88
| | | | |
| | | | | | | | | | | | | | | | | | |
|
|
|
|
| | |
|
| | |
|
| | |
Wal-Mart Stores, Inc. Condensed Consolidated Balance Sheets (Unaudited) |
| | | | | | | | | | | | |
|
SUBJECT TO RECLASSIFICATION
| | | | | | | | | | | | | |
(Dollars in millions) | | | | October 31, | | | January 31, | | | October 31, |
ASSETS | | | | 2014 |
| | | 2014 |
| | | 2013 |
|
Current assets: | | | | | | | | | | | | | |
Cash and cash equivalents
| | | |
$
|
6,718
| | | |
$
|
7,281
| | | |
$
|
8,736
| |
Receivables, net
| | | |
6,091
| | | |
6,677
| | | |
6,206
| |
Inventories
| | | |
51,501
| | | |
44,858
| | | |
49,673
| |
Prepaid expenses and other
| | | |
1,531
| | | |
1,909
| | | |
2,160
| |
Current assets of discontinued operations
| | | |
—
|
| | |
460
|
| | |
367
|
|
Total current assets
| | | |
65,841
| | | |
61,185
| | | |
67,142
| |
Property and equipment: | | | | | | | | | | | | | |
Property and equipment
| | | |
177,494
| | | |
173,089
| | | |
170,967
| |
Less accumulated depreciation
| | | |
(62,519
|
)
| | |
(57,725
|
)
| | |
(56,313
|
)
|
Property and equipment, net
| | | |
114,975
| | | |
115,364
| | | |
114,654
| |
Property under capital leases: | | | | | | | | | | | | | |
Property under capital leases
| | | |
5,632
| | | |
5,589
| | | |
5,668
| |
Less accumulated amortization
| | | |
(3,115
|
)
| | |
(3,046
|
)
| | |
(3,095
|
)
|
Property under capital leases, net
| | | |
2,517
| | | |
2,543
| | | |
2,573
| |
| | | | | | | | | | | | |
|
Goodwill
| | | |
18,888
| | | |
19,510
| | | |
19,729
| |
Other assets and deferred charges
| | | |
5,668
|
| | |
6,149
|
| | |
5,778
|
|
Total assets | | | |
$
|
207,889
|
| | |
$
|
204,751
|
| | |
$
|
209,876
|
|
| | | | | | | | | | | | |
|
LIABILITIES AND EQUITY | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Short-term borrowings
| | | |
$
|
6,019
| | | |
$
|
7,670
| | | |
$
|
12,817
| |
Accounts payable
| | | |
39,656
| | | |
37,415
| | | |
39,221
| |
Dividends payable
| | | |
1,553
| | | |
—
| | | |
1,573
| |
Accrued liabilities
| | | |
18,773
| | | |
18,793
| | | |
18,606
| |
Accrued income taxes
| | | |
383
| | | |
966
| | | |
255
| |
Long-term debt due within one year
| | | |
4,874
| | | |
4,103
| | | |
4,147
| |
Obligations under capital leases due within one year
| | | |
302
| | | |
309
| | | |
315
| |
Current liabilities of discontinued operations
| | | |
—
|
| | |
89
|
| | |
87
|
|
Total current liabilities
| | | |
71,560
| | | |
69,345
| | | |
77,021
| |
| | | | | | | | | | | | |
|
Long-term debt
| | | |
41,720
| | | |
41,771
| | | |
41,702
| |
Long-term obligations under capital leases
| | | |
2,767
| | | |
2,788
| | | |
2,841
| |
Deferred income taxes and other
| | | |
7,789
| | | |
8,017
| | | |
8,298
| |
Redeemable noncontrolling interest
| | | |
—
| | | |
1,491
| | | |
1,492
| |
| | | | | | | | | | | | |
|
Commitments and contingencies
| | | | | | | | | | | | | |
| | | | | | | | | | | | |
|
Equity: | | | | | | | | | | | | | |
Common stock
| | | |
323
| | | |
323
| | | |
324
| |
Capital in excess of par value
| | | |
2,223
| | | |
2,362
| | | |
2,364
| |
Retained earnings
| | | |
80,814
| | | |
76,566
| | | |
72,888
| |
Accumulated other comprehensive income (loss)
| | | |
(4,251
|
)
| | |
(2,996
|
)
| | |
(2,183
|
)
|
Total Walmart shareholders’ equity
| | | |
79,109
| | | |
76,255
| | | |
73,393
| |
Nonredeemable noncontrolling interest
| | | |
4,944
|
| | |
5,084
|
| | |
5,129
|
|
Total equity
| | | |
84,053
|
| | |
81,339
|
| | |
78,522
|
|
Total liabilities and equity | | | |
$
|
207,889
|
| | |
$
|
204,751
|
| | |
$
|
209,876
|
|
|
|
|
| |
|
| |
Wal-Mart Stores, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) |
| | | | | | |
|
| | | | | | |
|
| | | | Nine Months Ended |
SUBJECT TO RECLASSIFICATION
| | | | October 31, |
(Dollars in millions) | | | |
| 2014 |
| | |
| 2013 |
|
Cash flows from operating activities: | | | | | | | |
Consolidated net income
| | | |
$
|
11,911
| | | |
$
|
12,045
| |
(Income) loss from discontinued operations, net of income taxes
| | | |
|
(285
|
)
| | |
|
(38
|
)
|
Income from continuing operations
| | | | |
11,626
| | | | |
12,007
| |
Adjustments to reconcile consolidated net income to net cash
provided by operating activities:
| | | | |
Depreciation and amortization
| | | | |
6,881
| | | | |
6,600
| |
Deferred income taxes
| | | | |
(233
|
)
| | | |
594
| |
Other operating activities
| | | | |
592
| | | | |
465
| |
Changes in certain assets and liabilities:
| | | | | | | |
Receivables, net
| | | | |
459
| | | | |
191
| |
Inventories
| | | | |
(6,929
|
)
| | | |
(6,230
|
)
|
Accounts payable
| | | | |
3,068
| | | | |
2,089
| |
Accrued liabilities
| | | | |
583
| | | | |
(95
|
)
|
Accrued income taxes
| | | |
|
(577
|
)
| | |
|
(2,301
|
)
|
Net cash provided by operating activities
| | | | |
15,470
| | | | |
13,320
| |
| | | | | | |
|
Cash flows from investing activities: | | | | | | | |
Payments for property and equipment
| | | | |
(8,243
|
)
| | | |
(9,506
|
)
|
Proceeds from the disposal of property and equipment
| | | | |
459
| | | | |
521
| |
Proceeds from disposal of certain operations
| | | | |
671
| | | | |
—
| |
Other investing activities
| | | |
|
(44
|
)
| | |
|
(156
|
)
|
Net cash used in investing activities
| | | | |
(7,157
|
)
| | | |
(9,141
|
)
|
| | | | | | |
|
Cash flows from financing activities: | | | | | | | |
Net change in short-term borrowings
| | | | |
(1,843
|
)
| | | |
6,046
| |
Proceeds from issuance of long-term debt
| | | | |
5,120
| | | | |
7,053
| |
Payments of long-term debt
| | | | |
(3,883
|
)
| | | |
(4,943
|
)
|
Dividends paid
| | | | |
(4,639
|
)
| | | |
(4,625
|
)
|
Purchase of Company stock
| | | | |
(1,015
|
)
| | | |
(5,806
|
)
|
Dividends paid to noncontrolling interest
| | | | |
(401
|
)
| | | |
(365
|
)
|
Purchase of noncontrolling interest
| | | | |
(1,804
|
)
| | | |
(247
|
)
|
Other financing activities
| | | |
|
(393
|
)
| | |
|
(149
|
)
|
Net cash used in financing activities
| | | | |
(8,858
|
)
| | | |
(3,036
|
)
|
| | | | | | |
|
Effect of exchange rates on cash and cash equivalents
| | | |
|
(18
|
)
| | |
|
(188
|
)
|
| | | | | | |
|
Net increase (decrease) in cash and cash equivalents
| | | | |
(563
|
)
| | | |
955
| |
Cash and cash equivalents at beginning of year
| | | |
|
7,281
|
| | |
|
7,781
|
|
Cash and cash equivalents at end of period
| | | |
$
|
6,718
|
| | |
$
|
8,736
|
|
|
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 16.4 percent and 17.5 percent for the trailing 12 months ended
October 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 |
| | | | | | | October 31, |
(Dollars in millions) | | | | | | |
| 2014 |
| | |
| 2013 |
|
CALCULATION OF RETURN ON INVESTMENT |
Numerator | | | | | | | | | | |
Operating income
| | | | | | |
$
|
26,545
| | | |
$
|
28,105
| |
+ Interest income
| | | | | | | |
103
| | | | |
146
| |
+ Depreciation and amortization
| | | | | | | |
9,151
| | | | |
8,775
| |
+ Rent
| | | | | | |
|
2,898
|
| | |
|
2,667
|
|
Adjusted operating income
| | | | | | |
$
|
38,697
|
| | |
$
|
39,693
|
|
| | | | | | | | | |
|
Denominator | | | | | | | | | | |
Average total assets of continuing operations1 | | | | | | |
$
|
208,699
| | | |
$
|
207,624
| |
+Average accumulated depreciation and amortization1 | | | | | | | |
62,521
| | | | |
56,533
| |
- Average accounts payable1 | | | | | | | |
39,439
| | | | |
39,747
| |
- Average accrued liabilities1 | | | | | | | |
18,690
| | | | |
18,571
| |
+ Rent x 8
| | | | | | |
|
23,184
|
| | |
|
21,336
|
|
Average invested capital
| | | | | | |
$
|
236,275
|
| | |
$
|
227,175
|
|
Return on investment (ROI) | | | | | | |
|
16.4
|
%
| | |
|
17.5
|
%
|
| | | | | | | | | |
|
CALCULATION OF RETURN ON ASSETS |
Numerator | | | | | | | | | | |
Income from continuing operations
| | | | | | |
$
|
16,170
|
| | |
$
|
17,870
|
|
Denominator | | | | | | | | | | |
Average total assets of continuing operations1 | | | | | | |
$
|
208,699
|
| | |
$
|
207,624
|
|
Return on assets (ROA) | | | | | | |
|
7.7
|
%
| | |
|
8.6
|
%
|
| | | | | | | | | |
|
| | | | As of October 31, |
Certain Balance Sheet Data | | | |
| 2014 | | |
| 2013 |
| | |
| 2012 |
|
Total assets of continuing operations
| | | |
$
|
207,889
| | |
$
|
209,509
| | | |
$
|
205,738
| |
Accumulated depreciation and amortization
| | | | |
65,634
| | | |
59,408
| | | | |
53,658
| |
Accounts payable
| | | | |
39,656
| | | |
39,221
| | | | |
40,272
| |
Accrued liabilities
| | | | |
18,773
| | | |
18,606
| | | | |
18,536
| |
| | | | | | | | | |
|
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 $7.2 billion and $3.8 billion for the nine months
ended October 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.
|
|
|
| |
| | | | Nine Months Ended |
| | | | October 31, |
(Dollars in millions) | | | |
| 2014 |
|
|
|
| 2013 |
|
Net cash provided by operating activities
| | | |
$
|
15,470
| | | |
$
|
13,320
| |
Payments for property and equipment
| | | |
|
(8,243
|
)
| | |
|
(9,506
|
)
|
Free cash flow
| | | |
$
|
7,227
|
| | |
$
|
3,814
|
|
| | | | | | |
|
Net cash used in investing activities1 | | | |
$
|
(7,157
|
)
| | |
$
|
(9,141
|
)
|
Net cash used in financing activities
| | | |
$
|
(8,858
|
)
| | |
$
|
(3,036
|
)
|
| | | | | | |
|
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 nine months ended
October 31, 2014.
|
|
|
| |
|
| | |
|
| |
|
| |
| | | | Three Months Ended October 31, 2014 | | | | Nine Months Ended October 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
| | | |
$
|
33,659
| | |
1.7
|
%
| | |
$
|
118,076
| | |
2.8
|
%
| | | |
$
|
99,955
| | |
1.1
|
%
| | |
$
|
351,579
| | |
2.1
|
%
|
Currency exchange rate fluctuations1 | | | |
|
396
| | |
| | |
|
396
| | |
| | | |
|
2,668
| | |
| | |
|
2,668
| | |
|
| | | | |
34,055
| | | | | | |
118,472
| | | | | | | |
102,623
| | | | | | |
354,247
| | | |
Net sales from acquisitions
| | | |
|
—
| | |
| | |
|
—
| | |
| | | |
|
—
| | |
| | |
|
—
| | |
|
Constant currency net sales
| | | |
$
|
34,055
|
|
|
2.9
|
%
|
|
|
$
|
118,472
|
|
|
3.1
|
%
|
|
|
|
$
|
102,623
|
|
|
3.8
|
%
|
|
|
$
|
354,247
|
|
|
2.9
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
|
Operating income: | | | | | | | | | | | | | | | | | | | | | | | | | | |
As reported
| | | |
$
|
1,430
| | |
3.7
|
%
| | |
$
|
6,265
| | |
(0.7
|
)%
| | | |
$
|
4,121
| | |
5.1
|
%
| | |
$
|
19,198
| | |
(1.7
|
)%
|
Currency exchange rate fluctuations1 | | | |
|
21
| | |
| | |
|
21
| | |
| | | |
|
62
| | |
| | |
|
62
| | |
|
| | | | |
1,451
| | | | | | |
6,286
| | | | | | | |
4,183
| | | | | | |
19,260
| | | |
Operating income (loss) from acquisitions
| | | |
|
—
| | |
| | |
|
—
| | |
| | | |
|
—
| | |
| | |
|
—
| | |
|
Constant currency operating income
| | | |
$
|
1,451
|
|
|
5.2
|
%
|
|
|
$
|
6,286
|
|
|
(0.4
|
)%
|
|
|
|
$
|
4,183
|
|
|
6.7
|
%
|
|
|
$
|
19,260
|
|
|
(1.4
|
)%
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
|
1 Excludes currency exchange rate fluctuations
related to acquisitions until the acquisitions are included in
both comparable periods.
|
|
Underlying EPS
The underlying diluted earnings per share from continuing operations
attributable to Walmart ("Underlying EPS") for the three months and the
fiscal year ended 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 diluted earnings per
share from continuing operations attributable to Walmart calculated in
accordance with GAAP ("EPS") for the three months and the fiscal year
ended Jan. 31, 2014. Management believes that the Underlying EPS for the
three months and the fiscal year ended 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 recorded in the three months
and fiscal year ended 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
what management considers Walmart's core earnings performance for the
three months and the fiscal year ended Jan. 31, 2014 and also affords
investors the ability to make a more informed assessment of such 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 Underlying EPS for the three months and the
fiscal year ended Jan. 31, 2014 by adjusting the EPS for each period for
the amount of the dilutive impact of: (1) Brazil non-income tax
contingencies ("Brazil Taxes"); (2) Brazil employment claim
contingencies ("Brazil Employment Matters"); (3) the closure of 54
underperforming Brazil and China stores ("Store Closures"); (4) China
store lease expense charges ("Lease Matters"); (5) the India transaction
("India Transaction"); and (6) Sam's Club U.S. staff restructuring and
club closure ("Sam's Restructuring").
Underlying EPS for the three months and the fiscal year ended Jan. 31,
2014 is a non-GAAP financial measure. The most directly comparable
financial measure calculated in accordance with GAAP is EPS for the
three months and the fiscal year ended Jan. 31, 2014.
| |
|
| | |
|
| |
Underlying EPS |
|
| | | | |
Three Months Ended
January 31, 2014
| | |
Fiscal Year Ended
January 31, 2014
|
|
Diluted net income per common share:
| | | | | | | |
| | | | | | | | | |
|
| |
Underlying EPS
| | | |
$ 1.60
| | | |
$ 5.11
|
| |
Adjustments to Underlying EPS
| | | | | | | |
| | | | | | | | | |
|
| | |
Brazil Taxes
| | |
(0.06)
| | | |
(0.06)
|
| | |
Brazil Employment Matters
| | |
(0.05)
| | | |
(0.05)
|
| | |
Store Closures
| | |
(0.06)
| | | |
(0.06)
|
| | |
Lease Matters
| | |
(0.03)
| | | |
(0.03)
|
| | |
India Transaction
| | |
(0.05)
| | | |
(0.05)
|
| | |
Sam's Restructuring
| | |
(0.01)
| | | |
(0.01)
|
| | | | | | | | | |
|
| |
EPS
| | | |
$1.34
| | | |
$ 4.85
|
| | | | | | | | | |
|
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 39-week periods ended Oct.
31, 2014 and Oct. 25, 2013, the projected comparable club sales of
Sam's Club for the 13 weeks ending Jan. 30, 2015 and the comparable
club sales of Sam's Club for the 13 weeks ended Jan. 31, 2014, 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 Oct. 31, 2014
and the percentage increase in the net sales of Sam's Club for the
three months ended Oct. 31, 2014 over the net sales of Sam's Club for
the three months ended Oct. 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 nine
months ended Oct. 31, 2014 and 2013, the percentage increase in the
segment operating income of Sam's Club for the three months ended Oct.
31, 2014 over the segment operating income of Sam's Club for the three
months ended Oct. 31, 2013, and the percentage decrease in the segment
operating income of Sam's Club for the nine months ended Oct. 31, 2014
over the segment operating income of Sam's Club for the nine months
ended Oct. 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
Jan. 30, 2015 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 Jan. 30, 2015 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.
Contacts:
Wal-Mart Stores, Inc.
Media Relations:
Randy
Hargrove, 800-331-0085
or
Investor Relations:
Carol
Schumacher, 479-277-1498
or
Pre-recorded management call
877-523-5612
(U.S. and Canada)
201-689-8483 (other countries)
Passcode:
9256278 (Walmart)
Source: Wal-Mart Stores, Inc.
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