Slide 1: Wal-Mart Stores, Inc.
Wal-Mart Stores, Inc.
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 for the three months ending October 31, 2016, adjusted earnings per share and our effective tax rate for the year ending January 31, 2017, Walmart U.S.'s comparabl
Slide 3: Guidance
Guidance The company's guidance for adjusted earnings per share for fiscal year 2017 assumes currency exchange rates remain at today's levels. This guidance also includes an estimated dilutive impact to EPS of approximately $0.05, primarily in the fourth quarter, as a result of expected operating lo
Slide 4: Wal-Mart Stores, Inc. consolidated results
Wal-Mart Stores, Inc. (Amounts in millions, except per share data) Q2 $ Δ1 % Δ1 YTD $ Δ1 % Δ1 Total revenue3 $120,854 $625 0.5% $236,758 $1,703 0.7% Total revenue, constant currency2,3 $123,593 $3,364 2.8% $243,019 $7,964 3.4% Net sales $119,405 $75 0.1% $234,391 $1,059 0.5% Net sales, constant curr
Slide 5: Wal-Mart Stores, Inc. margins and ratios
Wal-Mart Stores, Inc. Q2 bps Δ1 YTD bps Δ1 Gross profit rate 25.1% 53 bps 24.9% 56 bps Operating expenses as a percentage of net 21.1% 91 bps 21.0% 99 bps sales Effective tax rate 30.5% -368 bps 31.1% -226 bps Debt to total capitalization2 NP NP 38.3% — bps Return on investment3,4 NP NP 15.5% -70 bp
Slide 6: Wal-Mart Stores, Inc. working capital
Wal-Mart Stores, Inc. (Amounts in millions) Q2 $ Δ1 % Δ1 Receivables, net $5,275 $— —% Inventories $43,453 -$1,554 -3.5% Accounts payable $39,902 $2,677 7.2% 1 Change versus prior year comparable period. 6
Slide 7: Cash flow, dividends and share repurchases
Wal-Mart Stores, Inc. (Amounts in millions) YTD $ Δ1 Operating cash flow $14,931 $4,829 Capital expenditures $4,619 -$425 Free cash flow2 $10,312 $5,254 (Amounts in millions) Q2 % Δ1 YTD % Δ1 Dividends $1,560 -1.1% $3,133 -0.8% Share repurchases3 $2,117 111.1% $4,852 278.2% Total $3,677 42.5% $7,985
Slide 8: Walmart U.S.
Walmart U.S. (Amounts in millions) Q2 Δ1 YTD Δ1 Net sales $76,241 3.1% $149,536 3.7% Comparable store sales2 1.6% 10 bps 1.3% — bps • Comp traffic 1.2% -10 bps NP NP • Comp ticket 0.4% 20 bps NP NP E-commerce impact3 ~0.4% ~20 bps NP NP Neighborhood Market ~6.5% -80 bps NP NP Gross profit rate Incre
Slide 9: Walmart U.S. - financial highlights
Walmart U.S. - financial highlights Sales • Net sales increased 3.1%, or approximately $2.3 billion. • Comp sales increased 1.6% led by comp traffic of 1.2%. The 2-year stack basis comp sales is 3.1%. • Market food deflation negatively impacted food comps by approximately 100 basis points. The impac
Slide 10: Walmart U.S. - merchandise highlights
Walmart U.S. - merchandise highlights Category Comp Comments Strong traffic in food and consumables was partially offset by 100 bps 1 of market food deflation versus last year (impact to segment comp was Grocery + low single-digit similar to Q1). Consumables growth from improved assortment in beauty
Slide 11: Walmart International
Walmart International Constant Constant (Amounts in millions) Reported currency1 Reported currency1 Q2 Δ2 Q2 Δ2 YTD 1 Δ2 YTD Δ2 Net sales $28,621 -6.6% $31,309 2.2% $56,704 -6.9% $62,890 3.2% Gross profit rate Increase 45 bps NP NP Increase 58 bps NP NP Operating income3 $1,727 35.2% $1,884 47.5% $2
Slide 12: Walmart International - financial highlights
Walmart International - financial highlights Sales • Nine of 11 markets had positive comp sales. Six of 11 markets had comp sales greater than 4 percent. • Walmex continues to deliver strong results. • Currency exchange rate fluctuations negatively impacted net sales by $2.7 billion. Operating incom
Slide 13: Walmart International - key markets
Walmart International - key markets Comp3 Gross 1,2 Net Operating Country profit Sales Traffic Ticket sales3 3 income3 rate United Kingdom4 -7.5% -6.0% -1.5% -5.0% Increase Decrease 3¹ Walmex5 7.3% 0.7% 6.6% 8.3% Increase Increase6 Canada 1.1% 0.5% 0.6% 2.9% Increase Increase Brazil 4.7% -3.5% 8.2%
Slide 14: Walmart International - key market highlights
Walmart International - key market highlights Walmex • Strong sales momentum for Walmex continued across all formats, divisions, countries and regions. Growth in comp sales significantly outpaced the rest of the self-service market, according to ANTAD. • In Mexico, consumption continues to be favora
Slide 15: Walmart International - key market highlights (cont.)
Walmart International - key market highlights (cont.) Canada • Comp sales were positive for the ninth consecutive quarter, benefiting from continued price investments and improvements in operational standards. • Walmart Canada gained 60 basis points of market share in food and consumables and health
Slide 16: Walmart International - key market highlights (cont.)
Walmart International - key market highlights (cont.) China • Comp sales declined due to a combination of deep discounting by online competitors during sales events and unfavorable weather. • New stores continue to improve performance, and, according to Nielsen, we continued to gain market share in
Slide 17: Sam's Club
Sam's Club Without fuel1 With fuel Without fuel1 With fuel (Amounts in millions) 2 2 2 Q2 Δ Q2 Δ YTD Δ YTD Δ2 Net sales $13,449 0.4% $14,543 -1.3% $26,176 1.6% $28,151 -0.2% Comparable club sales3 0.6% -70 bps -1.2% 110 bps 0.3% -60 bps -1.5% 150 bps • Comp traffic -0.4% -90 bps NP NP NP NP NP NP •
Slide 18: Sam's Club - financial highlights
Sam's Club - financial highlights Sales • Comp sales1 for the period increased 0.6%, slightly ahead of expectations. • Market deflation accelerated from Q1 and impacted comp sales, primarily in food, by approximately 100 basis points. • E-commerce sales contributed approximately 60 basis points to c
Slide 19: Sam's Club - category highlights
Sam's Club - category highlights Category Comp Comments Commodity deflation continued to pressure results in fresh meat and dairy categories. Fresh / Freezer / Cooler - low single-digit Assortment changes in frozen foods negatively impacted sales. Produce again delivered positive results on item ava
Slide 20: Third-party FCPA- and compliance-related expenses
Third-party FCPA- and compliance-related expenses Q2 YTD (Amounts in millions) FY17 FY16 FY17 FY16 Ongoing inquiries and $23 $23 $44 $48 investigations Global compliance program and 5 7 9 15 organizational enhancements Total $28 $30 $53 $63 • In fiscal year 2017, we expect our third party FCPA- and
Slide 21: Non-GAAP measures - ROI
Non-GAAP measures - ROI 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 initiati
Slide 22: Non-GAAP measures - ROI cont.
Non-GAAP measures - ROI cont. 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 Trailing Twelve Months Ended Ended July 31, J
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. Free cash flow was $10.3 billion and $5.1 billion for the six months ended July 31, 2016 and 2015, respectively. The inc
Slide 24: Non-GAAP measures - constant currency
Non-GAAP measures - constant currency 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 of changes in currency exchange rat
Slide 25: Non-GAAP measures - fuel impact
Non-GAAP measures - fuel impact The net sales and operating income of Sam's Club for the quarter ended July 31, 2016, the percentage changes in those financial measures from the prior year period, Sam’s Club’s comparable club sales for the 13-week and 26-week periods ended July 29, 2016 and Sam's Cl
Slide 26: Non-GAAP measures - fuel impact cont.
Non-GAAP measures - fuel impact cont. The table below reflects the calculation of the fuel impact for net sales and operating income for the three and six months ended July 31, 2016 and 2015. Three Months Ended July 31, Six Months Ended July 31, (Dollars in millions) 2016 2015 Percent Change 2016 20
Slide 27: Non-GAAP measures - adjusted EPS
Non-GAAP measures - adjusted EPS The adjusted diluted earnings per share from continuing operations attributable to Walmart (Adjusted EPS) for the three-month period ended July 31, 2016 is considered a non- GAAP financial measure under the SEC's rules because the Adjusted EPS excludes certain amount
Slide 28: Non-GAAP measures - adjusted EPS cont.
Non-GAAP measures - adjusted EPS cont. Forecasted Adjusted EPS (Forecasted Adjusted EPS) is also considered a non-GAAP financial measure. Management believes that Forecasted Adjusted EPS for Fiscal 2017 is a meaningful metric to share with investors because that metric, which adjusts EPS for certain
Slide 29: Additional resources at stock.walmart.com
Additional resources at stock.walmart.com • Additional information related to reconciliations for our non-GAAP financial measures (ROI, free cash flow, constant currency, Sam’s Club comparable measures, and Adjusted EPS) • Unit counts & square footage • Comparable store sales • Terminology • FY 17 e