BENTONVILLE, Ark., Nov. 14 -- Wal-Mart Stores, Inc. (NYSE: WMT) reported record third quarter sales and earnings for the quarter ended October 31, 2005. Net sales were $75.4 billion, an increase of 10.1 percent over the third quarter of fiscal 2005. Net income for the quarter was $2.4 billion, an increase of 3.8 percent from $2.3 billion in the third quarter of fiscal 2005. Earnings per share were $0.57, up from $0.54 per share in the same prior year quarter.
Net income for the quarter ended October 31, 2005, included three items netting to an unfavorable after tax impact of $80 million or $0.02 per share: approximately $40 million of costs incurred as a result of hurricanes Katrina, Rita and Wilma; and in our Wal-Mart Stores segment, $69 million of expense related to product warranty programs partially offset by $29 million of other income resulting from the Visa MasterCard antitrust litigation settlement.
Net sales for the nine months ended October 31, 2005, were $223.2 billion, an increase of 9.9 percent over the first nine months of fiscal 2005. Net income for the nine months ended October 31, 2005, increased 7.6 percent to a record $7.6 billion, up from $7.1 billion in the same prior year period. Diluted earnings per share for the nine months ended October 31, 2005, were $1.82, up from $1.66 in the same prior year period.
Lee Scott, President and CEO, said, "I am proud of the record results our associates achieved in the quarter while leading the relief efforts in the aftermath of three major hurricanes."
Net sales were as follows (dollars in billions):
Three Months Ended Nine Months Ended
October 31, October 31,
Percent Percent
2005 2004 Change 2005 2004 Change
Wal-Mart Stores $50.243 $45.888 9.5% $149.693 $136.373 9.8%
SAM'S CLUB 10.019 9.082 10.3% 29.143 27.139 7.4%
International 15.174 13.550 12.0% 44.319 39.493 12.2%
Total Company $75.436 $68.520 10.1% $223.155 $203.005 9.9%
Total U.S. comparable sales for the quarter increased 3.8 percent, which is represented by a 2.9 percent comp increase for Wal-Mart Stores and an 8.1 percent comp increase for SAM'S CLUB. Total U.S. comparable sales for the nine month period were up 3.4 percent, which is comprised of a 3.1 percent comp increase for Wal-Mart Stores and a 5.0 percent comp increase for SAM'S CLUB.
Wal-Mart Stores Segment:
For the third quarter of fiscal 2006, the Wal-Mart Stores segment, including Supercenters, had segment operating income (income before net interest expense, income taxes, unallocated corporate overhead and minority interest) of $3.312 billion, an increase of 6.3 percent, compared with $3.115 billion in the third quarter of fiscal 2005.
For the nine months ended October 31, 2005, the Wal-Mart Stores segment, including Supercenters, had segment operating income of $10.610 billion, an increase of 6.9 percent, as compared with segment operating income of $9.921 billion in the similar period in the prior year.
SAM'S CLUB Segment:
The SAM'S CLUB segment had segment operating income for the third quarter of fiscal 2006 of $342 million, an increase of 11.8 percent, compared with $306 million in the third quarter of fiscal 2005.
For the nine months ended October 31, 2005, the SAM'S CLUB segment had segment operating income of $1.008 billion, an increase of 9.0 percent, as compared with segment operating income of $925 million in the similar period in the prior year.
International Segment:
The International segment had segment operating income of $797 million for the most recent quarter, an increase of 14.2 percent, compared with $698 million in the third quarter of fiscal 2005.
The International segment had segment operating income of $2.214 billion for the first nine months of fiscal 2006, an increase of 10.2 percent, compared with $2.009 billion for the similar period in fiscal 2005.
Guidance:
We expect earnings per share for the fourth quarter to come in between $0.82 to $0.86, and for the year, our forecast is $ 2.64 to $2.68.
After this earnings release has been furnished to the SEC, a pre-recorded call offering additional comments on the quarter will be available to all investors. You may listen to this call by dialing 203-369-1090. The information included in this release and our pre-recorded phone call will be available in the investor information area on our web site at http://www.walmartstores.com under financial information, earnings and dividends.
Wal-Mart Stores, Inc. operates Wal-Mart Stores, Supercenters, Neighborhood Markets and SAM'S CLUB locations in the United States. The company operates in Argentina, Brazil, Canada, China, Costa Rica, El Salvador, Germany, Guatemala, Honduras, Japan, Mexico, Nicaragua, Puerto Rico, South Korea and the United Kingdom. The company's securities are listed on the New York and Pacific stock exchanges under the symbol WMT. More information about Wal-Mart can be found by visiting http://www.walmartfacts.com . Online merchandise sales are available at http://www.walmart.com .
This release contains statements as to management's forecast of earnings per share for the fourth quarter and fiscal year 2006 that Wal-Mart believes are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, and intended to enjoy the protection of the safe harbor for forward-looking statements provided by that Act. These forward-looking statements are subject to risks, uncertainties and other factors, domestically and internationally, including, the cost of goods, competitive pressures, geopolitical conditions, inflation, consumer spending patterns and debt levels, currency exchange fluctuations, trade restrictions, changes in tariff and freight rates, weather conditions, changes in gasoline, diesel fuel and other energy costs, labor costs, health care costs and accident costs, interest rate fluctuations and other capital market conditions and other risks. We discuss certain of these factors more fully in other of our filings with the SEC, including our last Annual Report on Form 10-K filed with the SEC, and this release should be read in conjunction with that Annual Report on Form 10-K, and together with all our other filings, including current reports on Form 8-K, made with the SEC through the date of this report. We urge you to consider all of these risks, uncertainties and other factors carefully in evaluating the forward-looking statements contained in this release. As a result of these matters, including changes in facts, assumptions not being realized or other circumstances, our actual results may differ materially from historical results or from anticipated results implied in the forward-looking statements contained in this release. These forward- looking statements are made only as of the date of this report and we undertake no obligation to update the forward-looking statements to reflect subsequent events or circumstances.
WAL-MART STORES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Amounts in millions except per share data)
Three Months Ended Nine Months Ended
October 31, October 31,
2005 2004 2005 2004
Revenues:
Net sales $75,436 $68,520 $223,155 $203,005
Other income, net 817 762 2,371 2,227
76,253 69,282 225,526 205,232
Costs and expenses:
Cost of sales 57,988 52,567 171,346 156,070
Operating, selling,
general and
administrative expenses 14,216 12,931 41,511 37,369
Operating income 4,049 3,784 12,669 11,793
Interest:
Debt 348 248 847 649
Capital leases 60 57 174 189
Interest income (59) (64) (170) (149)
Interest, net 349 241 851 689
Income before income
taxes and minority
interest 3,700 3,543 11,818 11,104
Provision for income taxes 1,254 1,207 3,969 3,853
Income before minority
interest 2,446 2,336 7,849 7,251
Minority interest (72) (50) (209) (148)
Net income $2,374 $2,286 $7,640 $7,103
Net income per common share:
Basic $0.57 $0.54 $1.82 $1.67
Diluted $0.57 $0.54 $1.82 $1.66
Weighted-average number
of common shares:
Basic 4,165 4,242 4,189 4,266
Diluted 4,169 4,249 4,194 4,274
Certain reclassifications have been made to the prior period to conform to the
current presentation.
WAL-MART STORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Amounts in millions)
SUBJECT TO RECLASSIFICATION
October 31, October 31, January 31,
2005 2004 2005
ASSETS
Cash and cash equivalents $4,535 $4,639 $5,488
Receivables 1,846 1,418 1,715
Inventories 36,573 33,680 29,762
Prepaid expenses and other 1,970 1,574 1,841
Total current assets 44,924 41,311 38,806
Property and equipment, at cost 91,781 80,988 84,037
Less accumulated depreciation 20,883 18,545 18,637
Property and equipment, net 70,898 62,443 65,400
Property under capital leases, net
3,086 2,627 2,718
Goodwill 10,467 10,191 10,803
Other assets and deferred charges 2,424 2,485 2,427
Total assets $131,799 $119,057 $120,154
LIABILITIES AND SHAREHOLDERS' EQUITY
Commercial paper $6,774 $7,569 $3,812
Accounts payable 25,115 23,113 21,987
Dividends payable 645 537 ---
Accrued liabilities 12,702 12,258 12,120
Accrued income taxes 650 525 1,281
Long-term debt due within one year
4,172 3,721 3,759
Obligations under capital leases
due within one year
257 206 223
Total current liabilities 50,315 47,929 43,182
Long-term debt 23,249 19,099 20,087
Long-term obligations
under capital leases 3,547 3,048 3,171
Deferred income taxes and other 3,391 2,626 2,978
Minority interest 1,379 1,261 1,340
Commitments and contingencies
Common stock and capital in excess
of par value 2,925 2,723 2,848
Retained earnings 45,495 40,850 43,854
Other accumulated comprehensive
income 1,498 1,521 2,694
Total shareholders' equity 49,918 45,094 49,396
Total liabilities
and shareholders' equity $131,799 $119,057 $120,154
Certain reclassifications have been made to the prior period to conform to the
current presentation.
WAL-MART STORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Amounts in millions)
SUBJECT TO RECLASSIFICATION
Nine Months Ended
October 31
2005 2004
Cash flows from operating activities:
Net income $7,640 $7,103
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 3,514 3,161
Other 567 311
Changes in certain assets and liabilities,
net of effects of acquisitions:
Increase in accounts receivable (74) (44)
Increase in inventories (6,673) (6,632)
Increase in accounts payable 3,182 3,099
Increase (decrease) in accrued liabilities (42) 450
Net cash provided by operating activities 8,114 7,448
Cash flows from investing activities:
Payments for property and equipment (10,405) (9,260)
Disposal of assets 739 742
Investment in international operations (307) (315)
Other investing activities (122) (99)
Net cash used in investing activities (10,095) (8,932)
Cash flows from financing activities:
Increase in commercial paper 2,962 4,302
Proceeds from issuance of long-term debt 6,940 4,831
Dividends paid (1,887) (1,664)
Payment of long-term debt (2,722) (2,081)
Purchase of Company stock (3,580) (4,398)
Other financing activities (615) (105)
Net cash provided by financing activities 1,098 885
Effect of exchange rates on cash (70) 39
Net decrease in cash and cash equivalents (953) (560)
Cash and cash equivalents at beginning of year 5,488 5,199
Cash and cash equivalents at end of period $4,535 $4,639
Certain reclassifications have been made to the prior period to conform to the
current presentation.
SOURCE: Wal-Mart Stores, Inc.
CONTACT:
Investor Relations, +1-479-273-8446, or
Jay Fitzsimmons, +1-479-273-6445, or
Pauline Tureman, +1-479-277-9558, or
media relations, Marty Heires, +1-479-273-4314, all of Wal-Mart Stores, Inc.; or
Pre-recorded Conference Call, +1-203-369-1090
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