Slide 1: Financial presentation to accompany management commentary FY24 Q2
Financial presentation to accompany management commentary FY24 Q2
Slide 2: Guidance
Guidance Metric Q3 The following guidance reflects the Company’s Consolidated net sales (cc) Increase approximately 3.0% expectations for the third quarter and fiscal year 2024 and is provided on a non-GAAP Consolidated operating income (cc) Increase approximately 1.0% basis as the Company cannot pr
Slide 3: Total Revenue
Total Revenue 1 Total Revenue (cc) $161.1 billion, up +5.4% Amounts in billions, except as noted. Dollar changes may not recalculate due to rounding. • Total revenue reached $161.6 billion with strength across all operating segments $164 $161.6 • Positively affected by $0.6 billion from currency flu
Slide 4: Gross Profit Rate
Gross Profit Rate Gross Profit Rate +50bps to 24.0% 24.0% • Gross profit rate increased due to lapping last year’s elevated 23.7% 23.7% levels of markdowns and supply chain costs 23.5% • Partially offset by ongoing category mix pressure as grocery and health & wellness 22.9% sales outperform general
Slide 5: Operating Expenses
Operating Expenses As a percentage of net sales, +33bps to 20.3% 22.8% • Expense deleverage reflects 20.3% 20.4% 20.3% increased variable pay, higher tech 19.9% expenses, and increased store remodel costs in the U.S. • Partially offset by robust leverage in International on strong sales growth Q2 FY
Slide 6: Operating Income
Operating Income 1 Adjusted Operating Income of $7.4 billion, up 8.1% Amounts in billions, except as noted. Dollar changes may not recalculate due to rounding. 1 Operating Income Adjusted Operating Income 1 • Adjusted operating income up $7.3 $7.4 8.1% relative to 5.9% growth in $6.9 $6.9 net sales
Slide 7: EPS
EPS 1 Adjusted EPS of $1.84, up 4.0% 1 EPS Adjusted EPS $2.92 1 $1.77 $1.84 • Adjusted EPS excludes the net $2.32 $1.71 $1.50 $1.47 effects of $1.08 from net gains $1.88 on equity and other investments and an incremental opioid settlement expense $0.62 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 $(0.66)
Slide 8: Cash Flow
Cash Flow Amounts in billions, except as noted. Dollar changes may not recalculate due to rounding. 1 Operating Cash Flow Free Cash Flow $12.0 $28.8 $9.0 • Operating cash flow increased primarily due to moderated $18.2 levels of inventory purchases $15.7 and timing of certain payments $9.2 $3.6 • Fr
Slide 9: Returns to Shareholders
Returns to Shareholders Through dividends and share repurchases Amounts in billions, except as noted. Dollar changes may not recalculate due to rounding. $3.3 $3.0 • Share repurchases during quarter totaled $485 million representing 3.2 million shares at an average $1.2 price of $152.78 per share $0
Slide 10: Returns
Returns Return on Assets (ROA) Return on Investment (ROI) 1 5.8% • ROI declined on a trailing 12- 5.6% 13.8% month basis as a result of discrete charges for the opioid legal settlement frameworks in Q3 FY23 4.6% 4.5% and business reorganization and restructurings in Q4 FY23 12.8% 12.8% 12.7% 12.7% 3
Slide 11: Walmart U.S. Comp Sales
1 Walmart U.S. Comp Sales Net Sales +5.4% , eCommerce +24% • Comp sales +6.4% with strength in 8.2% 8.3% grocery and health & wellness, offset 7.4% by softness in general merchandise 6.5% 6.4% • Sales growth included increases in both store and digital transactions • Strong market share gains in gro
Slide 12: Walmart U.S.
Gross profit rate +40 bps Walmart U.S. • The lapping of last year's elevated markdowns and supply chain costs benefited margins • Benefited from managing prices to reflect elevated levels of cost inflation • Partly offset by unfavorable product mix shifts as grocery and health & wellness increased n
Slide 13: Walmart U.S. Merchandise category performance details
Walmart U.S. Merchandise category performance details Category Comp Comments • Strong comps reflected continued market share gains in dollars and units (according to Nielsen), and growth in private brand penetration (+40 bps) • Grocery inflation increased +HSD in Q2 (but moderated Grocery + high sin
Slide 14: Walmart International Net Sales
Walmart International Net Sales 1 Net Sales (cc) $27.0 billion, +11.0% 1 $27.6 $27.6 • Strong sales growth (cc) led by double-digit growth in Walmex, China $26.6 and Flipkart $25.3 • Sales positively affected by $0.6 $24.4 billion, or 2.2%, due to currency rate fluctuations • eCommerce sales grew 26
Slide 15: Walmart International
Walmart Gross profit rate -37 bps International • Format and channel mix changes in China, consistent with prior quarters • Continuing category mix shifts towards food and consumables Strong local businesses Operating expenses as a percentage of net sales powered by Walmart -129 bps • Leverage drive
Slide 16: Walmex
1,2 Walmex Net Sales (cc): $10.7 billion, +10.1% Sales • Double-digit growth with continued strength in food and consumables • Opened more than 120 new stores in past twelve months, including 22 new 11.5% 11.7% stores in the quarter 10.6% 9.3% • In Mexico, comp sales grew 8.5% driven 8.7% by Sam’s C
Slide 17: Canada
1 Canada Net Sales (cc): $6.1 billion, +5.1% Sales • Continued momentum in food and consumables with softness in general merchandise 10.3% • eCommerce investments in customer experience showing positive results Gross profit rate Relatively flat 6.3% 5.7% • Primarily from higher shrink and food 5.2%
Slide 18: China
1 China Net Sales (cc): $4.1 billion, +21.7% Sales • Continued strength in Sam’s Club and eCommerce • Both Sam's and Hyper formats with 25.5% positive traffic online and offline • eCommerce penetration at 47% 17.2% Gross profit rate Decrease 14.1% 13.3% • Mix effect from continued growth in lower ma
Slide 19: Sam's Club U.S. Comp Sales
1 Sam’s Club U.S. Comp Sales Net sales with fuel -0.3%, Net sales without fuel +5.3%, eCommerce +18% 17.5% • Strong comp sales driven by solid increases in ticket, transactions, and units sold 12.7% 11.9%12.2% ◦ Ticket without fuel +2.5% 9.5% 10.0% ◦ Transactions without fuel +2.9% 7.0% 5.5% • Stren
Slide 20: Sam's Club U.S.
Gross profit rate +135 bps, without fuel +143 bps Sam’s Club U.S. • Rate increase primarily due to lapping elevated markdowns last year • LIFO expense $48M Helping our members Operating expenses as a percentage of net sales share more, serve more +107 bps, without fuel +64 bps and live more • Lower
Slide 21: Sam's Club U.S. Category comparable sales
Sam’s Club U.S. Category comparable sales Category Comp Comments • Produce & floral, prepared foods, bakery, and fresh meat Fresh / Freezer / Cooler + mid single-digit performed well Grocery and Beverage + high single-digit • Drinks, dry grocery, and snacks showed strength • Paper goods, tabletop &
Slide 22: Safe harbor and non-GAAP measures
Safe harbor and non-GAAP measures This presentation and related management commentary contains statements that may be "forward-looking statements" as defined in, and are intended to enjoy the protection of the safe harbor for forward- looking statements within the meaning of Section 21E of the Secur
Slide 23: Non-GAAP measures - ROI
Non-GAAP measures - ROI We include Return on Assets ("ROA"), which is calculated in accordance with U.S. generally accepted accounting principles ("GAAP") as well as Return on Investment ("ROI") as measures to assess returns on assets. Management believes ROI is a meaningful measure to share with in
Slide 24: 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, is as follows: CALCULATION OF RETURN ON ASSETS Trailing Twelve Months Ending Jul 31, Oct 31, Jan 31, Apr 30, Jul 31, (Dollars in millions) 2022 2022 2023 2023 2023 Numerator
Slide 25: 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, is as follows: CALCULATION OF RETURN ON INVESTMENT Trailing Twelve Months Ending Jul 31, Oct 31, Jan 31, Apr 30, Jul 31, (Dollars in millions) 2022 2022 2023 2023 2023 Numera
Slide 26: 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. Net cash provided by operating activities was $18.2 billion for the six months ended July 31, 2023, which represents an
Slide 27: Non-GAAP measures – free cash flow (cont.)
Non-GAAP measures – free cash flow (cont.) 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 informati
Slide 28: 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 countries where the functional currency is not the U.S. dollar into U.S. dollars. We calculate the effect of c
Slide 29: Non-GAAP measures – constant currency (cont.)
Non-GAAP measures – constant currency (cont.) The table below reflects the calculation of constant currency for total revenues, net sales and operating income for the trailing five quarters. Three Months Ended Consolidated (Dollars in millions) Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Total Revenue:
Slide 30: Non-GAAP measures – Adjusted Operating Income
Non-GAAP measures – Adjusted Operating Income Adjusted operating income is considered a non-GAAP financial measure under the SEC’s rules because it excludes certain charges included in operating income calculated in accordance with GAAP. Management believes that adjusted operating income is a meanin
Slide 31: Non-GAAP measures – adjusted EPS
Non-GAAP measures – adjusted EPS Adjusted diluted earnings per share attributable to Walmart (Adjusted EPS) is considered a non-GAAP financial measure under the SEC’s rules because it excludes certain amounts included in the diluted earnings per share attributable to Walmart calculated in accordance
Slide 32: Non-GAAP measures – adjusted EPS (cont.)
Non-GAAP measures – adjusted EPS (cont.) Percent Three Months Ended Apr 30, 2023 Three Months Ended Apr 30, 2022 Change Diluted earnings per share: Reported EPS $0.62 $0.74 -16.2% Pre-Tax Tax 1 NCI Pre-Tax Tax 1 NCI Adjustments: Impact Impact Impact3 Net Impact Impact Impact Impact3 Net Impact Unrea
Slide 33: Non-GAAP measures – adjusted EPS (cont.)
Non-GAAP measures – adjusted EPS (cont.) Percent Three Months Ended Oct 31, 2022 Three Months Ended Oct 31, 2021 Change Diluted earnings per share: Reported EPS $(0.66) $1.11 NM Pre-Tax Tax 1 NCI Pre-Tax Tax 1 NCI Adjustments: Impact Impact Impact3 Net Impact Impact Impact Impact3 Net Impact Unreali
Slide 34: Non-GAAP measures - Adjusted EBITDA and Adjusted EBITDA Margin
Non-GAAP measures - Adjusted EBITDA and Adjusted EBITDA Margin We include net income and net income margin, which are calculated in accordance with U.S. generally accepted accounting principle as well as Adjusted EBITDA and Adjusted EBITDA margin to provide meaningful information about our operation
Slide 35: Non-GAAP measures – Adjusted EBITDA & Adjusted EBITDA margin
Non-GAAP measures – Adjusted EBITDA & Adjusted EBITDA margin The calculation of net income margin and Adjusted EBITDA margin, along with a reconciliation of Adjusted EBITDA margin to the calculation of net income margin, is as follows: Three Months Ended Q2 FY24 Q2 FY23 (Amounts in millions) 2023 20