Walmart Inc. · NASDAQ:WMT
Walmart — Q1 FY20 Earnings Presentation
25 slides from Walmart's earnings presentation, May 2019
Slide 1: Financial presentation to accompany management transcript
Financial presentation to accompany management transcript Q1 FY20
Slide 2: Safe harbor and non-GAAP measures
Safe harbor and non-GAAP measures This presentation and the accompanying management commentary contains statements Walmart believes are "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, Sectio
Slide 3: Walmart Inc.
Walmart Inc. (Amounts in millions, except per share data) Q1 $ Δ1 % Δ1 Total revenue $ 123,925 $ 1,235 1.0 % Total revenue, constant currency2 125,778 3,088 2.5 % Net sales 122,949 1,319 1.1 % Net sales, constant currency2 124,787 3,157 2.6 % Membership & other income 976 (84) (7.9)% Operating incom
Slide 4: Walmart Inc.
Walmart Inc. Q1 bps Δ1 Gross profit rate 24.3% (27) bps Operating expenses as a percentage of net sales 21.1% (14) bps Effective tax rate2 24.3% 491 bps Debt to total capitalization3 45.9% 790 bps Return on assets4 4.0% (80) bps Return on investment4 14.5% 60 bps 1 Basis points change versus prior y
Slide 5: Walmart Inc.
Walmart Inc. (Amounts in millions) Q1 $ Δ1 % Δ1 Receivables, net $ 5,342 $ 774 16.9% Inventories 44,751 1,448 3.3% Accounts payable 45,110 498 1.1% 1 Change versus prior year comparable period. 5
Slide 6: Walmart Inc.
Walmart Inc. (Amounts in millions) Q1 $ Δ1 Operating cash flow $ 3,563 $ (1,598) Capital expenditures 2,205 387 Free cash flow2 $ 1,358 (1,985) (Amounts in millions) Q1 % Δ1 Dividends $ 1,520 (0.8)% Share repurchases3 2,135 296.1% Total $ 3,655 76.4% 1 Change versus prior year comparable period. 2 S
Slide 7: Walmart U.S.
Walmart U.S. (Amounts in millions) Q1 Δ1 Net sales $80,344 3.3% Comparable sales2,3 3.4% 130 bps • Comp transactions4 1.1% (30) bps • Comp ticket 2.3% 160 bps eCommerce impact3 ~140 bps ~40 bps Gross profit rate Increase 6 bps Operating expense rate Decrease (10) bps Operating income $4,142 5.5% 1 C
Slide 8: Walmart U.S. - quarterly financial highlights
Walmart U.S. - quarterly financial highlights Sales • Comp sales1 increased 3.4%, the highest Q1 comp in nine years. Comp ticket increased 2.3% and comp transactions grew 1.1%. eCommerce contributed approximately 140 basis points to segment comp sales growth. Online grocery was a meaningful contribu
Slide 9: Walmart U.S. - quarterly merchandise highlights
Walmart U.S. - quarterly merchandise highlights Category Comp Comments Momentum continued in food and consumables with strong comp sales despite the pull-forward of SNAP funding into Q4. Snack & beverages and pet categories were particularly strong. Customers are Grocery1 + mid single-digit respondi
Slide 10: Walmart International
Walmart International Constant (Amounts in millions) Reported currency1 1Q1 Δ2 Q1 Δ2 Net sales $28,775 (4.9)% $30,613 1.2% Gross profit rate Decrease (172) bps NP NP Operating expense rate Decrease (30) bps Decrease (19) bps Operating income $738 (41.7)% $790 (37.5)% 1 See press release located at w
Slide 11: Walmart International - quarterly financial highlights
Walmart International - quarterly financial highlights Sales • Positive comp sales in three of our four largest markets - Mexico, China and Canada. In the U.K., comps were negative as a result of the timing of Easter. • The deconsolidation of Brazil was a headwind in the quarter but was partially of
Slide 12: Walmart International - key market quarterly results
Walmart International - key market quarterly results Comp3 Gross 1,2 Net Operating Country profit Sales Transactions Ticket sales3 3 income3 rate Walmex4 3.6% (0.5)% 4.1% 5.0% Decrease Increase China 0.4% (0.3)% 0.7% 1.4% Decrease Decrease Canada 1.2% (0.5)% 1.7% 1.3% Decrease Decrease United Kingdo
Slide 13: Walmart International - key market highlights
Walmart International - key market highlights Walmex • Net sales increased 5.0% and comp sales increased 3.6%, led by strength in Mexico. ◦ In Mexico, comp sales increased 4.7% or 14.7% on a two-year stacked basis. ◦ Added 41 stores in Mexico that offer online grocery bringing the total number of st
Slide 14: Walmart International - key market highlights
Walmart International - key market highlights Canada • Net sales increased 1.3%, with comp sales growth of 1.2%. ◦ Comp sales growth benefited from strength in grocery and fresh, partially offset by softer sales in general merchandise and apparel. • Gross profit rate declined primarily due to the ch
Slide 15: Sam's Club
Sam's Club With fuel Without fuel1 (Amounts in millions) Q1 Δ2 Q1 Δ2 Net sales $13,830 1.5% $12,453 0.6% Comparable sales3 1.1% (420) bps 0.3% (350) bps • Comp transactions NP NP 4.7% (90) bps • Comp ticket NP NP (4.4)% (260) bps eCommerce impact NP NP ~140 bps ~40 bps Gross profit rate Increase 47
Slide 16: Sam's Club - quarterly financial highlights
Sam's Club - quarterly financial highlights Sales 1 • Comp sales increased 0.3% and comp transactions grew 4.7%. Tobacco negatively affected comp sales by approximately 270 basis points. • eCommerce sales increased approximately 28%. Gross profit • Gross profit rate increased 47 basis points and 68
Slide 17: Sam's Club - quarterly category highlights
Sam's Club - quarterly category highlights Category Comp Comments Fresh / Freezer / Cooler + low single-digit Prepared meals, deli and frozen performed well. Grocery and beverage + mid single-digit Snacks, soda, spirits and candy performed well. Consumables + high single-digit Experienced broad-base
Slide 18: 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 19: Non-GAAP measures - ROI cont.
Non-GAAP measures - ROI cont. Prior to adoption of ASU 2016-02, we defined 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 considered averag
Slide 20: 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 CALCULATION OF RETURN ON INVESTMENT Trailing Twelve Months Trailing Twelve Months Ended April 30, Ended April 30, (Dollars in mil
Slide 21: 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 $3.6 billion for the three months ended April 30, 2019, which declin
Slide 22: 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 or for countries experiencing
Slide 23: 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 not excluded in the diluted earnings per share attributable to Walmart calculated in accord
Slide 24: Non-GAAP measures - adjusted EPS
Non-GAAP measures - adjusted EPS As previously disclosed in our fiscal year ended April 30, 2018 press release, we have calculated Adjusted EPS for the three months ended April 30, 2018 by adjusting EPS for the following: (1) unrealized gains and losses on JD.com, and (2) adjustment to the provision
Slide 25: Additional resources at stock.walmart.com
Additional resources at stock.walmart.com • Unit counts & square footage • Comparable store sales, including and excluding fuel • Revised fiscal 2019 quarterly comp transactions • Terminology 25