Walmart Inc. · NASDAQ:WMT
Walmart — Q4 FY2018 Earnings Presentation
30 slides from Walmart's earnings presentation, Feb 20, 2018
Slide 1: Financial presentation to accompany management transcript
Walmart >'< Financial presentation to accompany management transcript
Slide 2: Safe harbor and non-GAAP measures
Safe harbor and non-GAAP measures This presentation contains statements as to Walmart management's guidance regarding earnings per share, consolidated net sales growth, Walmart U.S. eCommerce sales growth, capital expenditures and Walmart's effective tax rate for the fiscal year ending January 31, 2
Slide 3: Fiscal Year 2019 Guidance
Fiscal Year 2019 Guidance U.S. FY19 EPS: Comp sales for 52-week period, Comp sales for 52-week period $4.75 to $5.00 excluding fuel1,2: (ex. fuel & tobacco)1,2: at least +2.0% +3.0% to +4.0% (excluding the approximately 400 basis point negative impact to comp sales from tobacco) or (-1.0%) to flat (
Slide 4: Additional Fiscal Year 2019 Guidance
Additional Fiscal Year 2019 Guidance • Consolidated net sales growth in constant currency: +1.5% to +2.0% ◦ Negatively impacted by actions at Sam's Club, including club closures and tobacco sales reduction ◦ Decision to wind-down first-party eCommerce business in Brazil and the divestiture of Suburb
Slide 5: Walmart Inc.
Walmart Inc. (Amounts in millions, except per share data) Q4 $ Δ1 % Δ1 FY18 $ Δ1 % Δ1 Total revenue $136,267 $5,331 4.1% $500,343 $14,470 3.0% Total revenue, constant currency2 $135,059 $4,123 3.1% $500,925 $15,052 3.1% Net sales $135,150 $5,400 4.2% $495,761 $14,444 3.0% Net sales, constant currenc
Slide 6: Walmart Inc.
Walmart Inc. Q4 bps Δ1 FY18 bps Δ1 Gross profit rate 24.1% -61 bps 24.7% -26 bps Operating expenses as a percentage of net 21.6% 78 bps 21.5% 32 bps sales Effective tax rate2 20.3% -917 bps 30.4% 15 bps Debt to total capitalization3 NP NP 37.4% -90 bps Return on investment4 NP NP 14.2% -100 bps 1 Ba
Slide 7: Walmart Inc.
Walmart Inc. (Amounts in millions) Q4 $ Δ1 % Δ1 Receivables, net $5,614 -$221 -3.8% Inventories $43,783 $737 1.7% Accounts payable $46,092 $4,659 11.2% 1 Change versus prior year comparable period. 7
Slide 8: Walmart Inc.
Walmart Inc. (Amounts in millions) FY18 $ Δ1 Operating cash flow $28,337 -$3,336 Capital expenditures $10,051 -$568 Free cash flow2 $18,286 -$2,768 (Amounts in millions) Q4 % Δ1 FY18 % Δ1 Dividends $1,510 -1.6% $6,124 -1.5% Share repurchases3 $1,640 -19.8% $8,296 0.0% Total $3,150 -12.0% $14,420 -0.
Slide 9: Walmart U.S.
Walmart U.S. (Amounts in millions) Q4 Δ1 FY18 Δ1 Net sales $86,579 3.4% $318,477 3.5% Comparable sales2,3 2.6% 80 bps 2.1% 70 bps • Comp traffic 1.6% 20 bps NP NP • Comp ticket 1.0% 60 bps NP NP eCommerce impact3,4 ~0.6% ~20 bps NP NP Neighborhood Market ~5.5% ~20 bps NP NP Gross profit rate Decreas
Slide 10: Walmart U.S. - quarterly financial highlights
Walmart U.S. - quarterly financial highlights Sales • Comp sales1 increased 2.6% led by strong comp traffic of 1.6%. eCommerce contributed approximately 60 basis points to segment comp sales growth. On a 2-year stack basis, comp sales and traffic were up 4.4% and 3.0%, respectively. • Strong perform
Slide 11: Walmart U.S. - quarterly merchandise highlights
Walmart U.S. - quarterly merchandise highlights Category Comp Comments Food and consumables had solid comp sales driven by strong 1 customer traffic. Strength was broad-based across categories, with Grocery + low single-digit fresh foods, packaged goods and private brands particularly strong driven
Slide 12: Walmart International
Walmart International Constant Constant (Amounts in millions) Reported currency1 Reported currency1 Q4 Δ2 Q4 Δ2 FY18 1 Δ2 FY18 Δ2 Net sales $33,092 6.7% $31,895 2.8% $118,068 1.7% $118,610 2.1% Gross profit rate Decrease -75 bps NP NP Decrease -28 bps NP NP Operating income $1,348 -10.9% $1,270 -16.
Slide 13: Walmart International - quarterly financial highlights
Walmart International - quarterly financial highlights Sales • Net sales on a constant currency basis increased 2.8 percent. • Reported net sales increased 6.7 percent, which included a benefit of approximately $1.2 billion from currency. • The divestitures of Suburbia and Yihaodian created a headwi
Slide 14: Walmart International - key markets quarterly results
Walmart International - key markets quarterly results Comp3 Gross 1,2 Net Operating Country profit Sales Traffic Ticket sales3 3 income3 rate United Kingdom4 0.5% -1.6% 2.1% 2.0% Decrease Decrease Walmex5 6.1% 0.9% 5.2% 4.3% Decrease Decrease Canada 2.9% 1.4% 1.5% 3.4% Decrease Increase China 2.3% 0
Slide 15: Walmart International - key market highlights
Walmart International - key market highlights Walmex • Net sales in the quarter increased 4.3 percent and comp sales increased 6.1 percent. Normalizing for Suburbia2 sales last year, net sales would have increased 7.9 percent. • In Mexico specifically, comp sales increased 6.4 percent in the quarter
Slide 16: Walmart International - key market highlights
Walmart International - key market highlights U.K. • During the quarter, net sales increased 2.0 percent, while comp sales increased 0.5 percent. • During the quarter, we experienced improved in-store service scores and performance strengthened across our private brand and online grocery offerings.
Slide 17: Sam's Club
Sam's Club With fuel Without fuel1 With fuel Without fuel1 (Amounts in millions) Q4 Δ2 Q4 Δ2 FY18 Δ2 FY18 Δ2 Net sales $15,479 3.3% $14,238 2.1% $59,216 3.2% $54,456 2.2% Comparable sales3 3.6% 50 bps 2.4% — bps 3.0% 280 bps 2.0% 90 bps • Comp traffic NP NP 4.3% 310 bps NP NP NP NP • Comp ticket NP
Slide 18: Sam's Club - quarterly financial highlights
Sam's Club - quarterly financial highlights Sales • Comp sales1 for the period increased 2.4% with growth in comp traffic of 4.3%. Tobacco negatively impacted comp sales by approximately 120 basis points. • In eCommerce, both Club Pickup and the direct to home business continued to have strong resul
Slide 19: Sam's Club - quarterly category highlights
Sam's Club - quarterly category highlights Category Comp Comments Fresh / Freezer / Cooler + mid single-digit Strong performance in produce, bakery, deli and prepared foods. Grocery and beverage + low single-digit Good contributions from Instant Savings Book (ISB) offerings and Members Mark products
Slide 20: Third-party FCPA- and compliance-related expenses
Third-party FCPA- and compliance-related expenses Q4 YTD (Amounts in millions) FY18 FY17 FY18 FY17 Ongoing inquiries and $4 $12 $14 $80 investigations Global compliance program and 3 5 26 19 organizational enhancements Total $7 $17 $40 $99 • In fiscal year 2019, we expect our third party FCPA and co
Slide 21: Non-GAAP measures - ROI
Non-GAAP measures - ROI We include Return on Assets ("ROA"), which is calculated in accordance with generally accepted accounting principles in the U.S. ("GAAP") as well as Return on Investment ("ROI") as measures to assess returns on assets. Management believes ROI is a meaningful measure to share
Slide 22: Non-GAAP measures - ROI cont.
Non-GAAP measures - ROI cont. The calculation of ROA and ROI, along with a reconciliation of ROI to the calculation of ROA, the most comparable GAAP financial measure, is as follows: Walmart Inc. Return on Assets and Return on Investment Trailing Twelve Months Trailing Twelve Months Ended Ended Janu
Slide 23: Non-GAAP measures - free cash flow
Non-GAAP measures - 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. We had net cash provided by operating activities of $28.3 billion and $31.7 billion for the twelve months ended January
Slide 24: Non-GAAP measures - constant currency
Non-GAAP measures - 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 into U.S. dollars. We calculate the effect
Slide 25: Non-GAAP measures - comparable sales measures
Non-GAAP measures - comparable sales measures The comparable sales of the company's Walmart U.S. and Sam's Club operating segments for the 13-week and 52-week periods ended January 26, 2018 and January 27, 2017, and our guidance for comparable sales for the 52-week period ending January 25, 2019, in
Slide 26: Non-GAAP measures - comparable sales measures cont.
Non-GAAP measures - comparable sales measures cont. The table below reflects the calculation of the Sam's Club fuel impact for net sales and operating income for the three and twelve months ended January 31, 2018 and 2017. Three Months Ended January 31, Twelve Months Ended January 31, (Dollars in mi
Slide 27: Non-GAAP measures - adjusted EPS
Non-GAAP measures - adjusted EPS Adjusted diluted earnings per share from continuing operations attributable to Walmart (Adjusted EPS) for each of the three months and fiscal years ended January 31, 2018 and 2017 is considered a non-GAAP financial measure under the SEC's rules because the Adjusted E
Slide 28: Non-GAAP measures - adjusted EPS
Non-GAAP measures - adjusted EPS Three Months Ended January 31, 2018 Fiscal Year Ended January 31, 2018 Diluted earnings per share: Reported EPS $0.73 $3.28 Pre-Tax Pre-Tax Tax NCI Adjustments: Impact Tax Impact1 Net Impact Impact Impact1 Impact4 Net Impact Restructuring charges2 0.40 -0.12 0.28 0.4
Slide 29: Non-GAAP measures - adjusted EPS
Non-GAAP measures - adjusted EPS We have calculated the Adjusted EPS for the three months and the fiscal year ended January 31, 2017 by adjusting the EPS for each period for the amount of the impact of: (1) U.S. discontinued real estate projects and severance and (2) the gain on the sale of Yihaodia
Slide 30: Additional resources at stock.walmart.com
Additional resources at stock.walmart.com • Unit counts & square footage • Comparable store sales • Terminology • Fiscal year 2019 earnings dates 30