Wal-Mart Reports Record Second Quarter Sales and Earnings

BENTONVILLE, Ark., Aug. 16 -- Wal-Mart Stores, Inc. (NYSE: WMT) reported record second quarter sales and earnings for the quarter ended July 31, 2005. Net sales were $76.8 billion, an increase of 10.2 percent over the second quarter of fiscal 2005. Net income for the quarter was $2.8 billion, an increase of 5.8 percent from $2.7 billion in the second quarter of fiscal 2005. Earnings per share were $0.67, up from $0.62 per share in the same prior year quarter.

Net sales for the six months ended July 31, 2005, were $147.7 billion, an increase of 9.8 percent over the first six months of fiscal 2005. Net income for the six months ended July 31, 2005, increased 9.3 percent to a record $5.3 billion, up from $4.8 billion in the same prior year period. Diluted earnings per share for the six months ended July 31, 2005, were $1.25, up from $1.12 in the same prior year period. Net income for the six months ended July 31, 2005, was favorably impacted by two items totaling $145 million after tax or $0.03 per share: an increase due to favorable tax resolutions of $77 million and positive legal developments of $68 million after-tax.

Lee Scott, President and CEO, said, "I am proud that the hard work of our associates allowed us to report another record quarter. Early in the quarter, our results were disappointing; however, July came in stronger than expected. Wal-Mart Stores did miss their plan as our customer continues to be impacted by higher gas prices and it is difficult to improve our expense leverage in the current environment."

     Net sales were as follows (dollars in billions):

                    Three Months Ended July 31,   Six Months Ended July 31,
                                        Percent                       Percent
                       2005      2004   Change     2005      2004     Change
    Wal-Mart Stores  $51.809   $46.914   10.4%   $99.449    $90.485    9.9%
    SAM'S CLUB         9.969     9.416    5.9%    19.124     18.057    5.9%
    International     15.033    13.392   12.3%    29.145     25.943   12.3%
    Total Company    $76.811   $69.722   10.2%  $147.718   $134.485    9.8%

Total U.S. comparable sales for the quarter increased 3.5 percent, which is represented by a 3.6 percent comp increase for Wal-Mart Stores and a 2.9 percent comp increase for SAM'S CLUB. Total U.S. comparable sales for the six month period were up 3.2 percent, which is comprised of a 3.2 percent comp increase for Wal-Mart Stores and a 3.2 percent comp increase for SAM'S CLUB.

We forecast earnings per share for the third quarter to come in between $0.55 to $0.59 and for the year, our forecast is $2.63 to $2.70.

Wal-Mart Stores Segment:

For the second 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 $3.992 billion, an increase of 8.3 percent, compared with $3.685 billion in the second quarter of fiscal 2005.

For the six months ended July 31, 2005, the Wal-Mart Stores segment, including Supercenters, had segment operating income of $7.298 billion, an increase of 7.2 percent, as compared with segment operating income of $6.806 billion in the similar period in the prior year.

SAM'S CLUB Segment:

The SAM'S CLUB segment had segment operating income for the second quarter of fiscal 2006 of $371 million, an increase of 5.4 percent, compared with $352 million in the second quarter of fiscal 2005.

For the six months ended July 31, 2005, the SAM'S CLUB segment had segment operating income of $666 million, an increase of 7.6 percent, as compared with segment operating income of $619 million in the similar period in the prior year.

International Segment:

The International segment had segment operating income of $750 million for the most recent quarter, an increase of 0.3 percent, compared with $748 million in the second quarter of fiscal 2005. The international segment's operating income in the second quarter of fiscal 2006 was impacted by a non-recurring charge of $36 million to restructure our operations in the United Kingdom.

The International segment had segment operating income of $1.417 billion for the first six months of fiscal 2006, an increase of 8.1 percent, compared with $1.311 billion for the similar period in fiscal 2005.

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 earnings and dividends.

Wal-Mart Stores, Inc. operates Wal-Mart Stores, Supercenters, Neighborhood Markets and SAM'S CLUB locations in the United States. Internationally, the company operates in Argentina, Brazil, Canada, China, Germany, Japan, Mexico, 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 third 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, 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   Six Months Ended
                                       July 31,              July 31,
                                    2005      2004       2005       2004
    Revenues:
      Net sales                    $76,811   $69,722   $147,718  $134,485
      Other income, net                709       737      1,480     1,408
                                    77,520    70,459    149,198   135,893

    Costs and expenses:
      Cost of sales                 58,787    53,533    113,357   103,503
      Operating, selling, general
       and administrative expenses  14,054    12,522     27,221    24,382
      Operating income               4,679     4,404      8,620     8,008

    Interest:
      Debt                             301       216        500       400
      Capital leases                    60        67        114       132
      Interest income                  (59)      (44)      (112)      (85)
      Interest, net                    302       239        502       447

    Income before income taxes and
     minority interest               4,377     4,165      8,118     7,561
    Provision for income taxes       1,503     1,458      2,715     2,646
    Income before minority
     interest                        2,874     2,707      5,403     4,915
    Minority interest                  (69)      (56)      (137)      (98)
        Net income                  $2,805    $2,651     $5,266    $4,817

    Net income per common share:
      Basic                          $0.67     $0.62      $1.25     $1.13
      Diluted                        $0.67     $0.62      $1.25     $1.12

    Weighted-average number of
     common shares:
      Basic                          4,175     4,264      4,201     4,279
      Diluted                        4,180     4,272      4,206     4,287

     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
                                         July 31,     July 31,   January 31,
                                           2005         2004        2005
                       ASSETS
    Cash and cash equivalents             $5,673       $4,709      $5,488
    Receivables                            1,682        1,280       1,715
    Inventories                           30,918       28,266      29,762
    Prepaid expenses and other             2,120        1,585       1,841
      Total current assets                40,393       35,840      38,806

    Property, plant and equipment,
     at cost                              88,979       77,342      84,066
    Less accumulated depreciation         20,369       17,478      18,637
      Property, plant and equipment, net  68,610       59,864      65,429

    Property under capital leases, net     3,029        2,651       2,718
    Goodwill                              10,413       10,124      10,803
    Other assets and deferred charges      2,320        2,303       2,427
        Total assets                    $124,765     $110,782    $120,183

        LIABILITIES AND SHAREHOLDERS' EQUITY
    Commercial paper                      $9,054       $6,827      $3,812
    Accounts payable                      22,624       19,771      21,987
    Dividends payable                      1,269        1,088         ---
    Accrued liabilities                   11,884       10,825      12,149
    Accrued income taxes                   1,021          637       1,281
    Long-term debt due within one year     3,080        4,415       3,759
    Obligations under capital leases due
     within one year                         233          202         223
      Total current liabilities           49,165       43,765      43,211

    Long-term debt                        20,209       17,044      20,087
    Long-term obligations under
     capital leases                        3,499        3,100       3,171
    Deferred income taxes and other        2,792        2,277       2,978
    Minority interest                      1,379        1,229       1,340

    Commitments and contingencies

    Common stock and capital in excess of
     par value                             2,874        2,643       2,848
    Retained earnings                     43,122       39,427      43,854
    Other accumulated comprehensive
     income                                1,725        1,297       2,694
      Total shareholders' equity          47,721       43,367      49,396
        Total liabilities and
         shareholders' equity           $124,765     $110,782    $120,183

     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
                                                    Six Months Ended July 31,
                                                        2005         2004
    Cash flows from operating activities:
      Net income                                       $5,266       $4,817
      Adjustments to reconcile net income to
       net cash provided by operating activities:
        Depreciation and amortization                   2,383        2,068
        Other                                            (250)          28
        Changes in certain assets and liabilities,
         net of effects of acquisitions:
          Decrease in accounts receivable                  61           70
          Increase in inventories                      (1,112)      (1,290)
          Increase (decrease) in accounts payable         749          (17)
          Decrease in accrued liabilities                (556)        (803)
            Net cash provided by operating activities   6,541        4,873

    Cash flows from investing activities:
      Payments for property, plant and equipment       (6,473)      (5,694)
      Disposal of assets                                  415          507
      Investment in international operations              ---         (315)
      Other investing activities                         (107)        (232)
            Net cash used in investing activities      (6,165)      (5,734)

    Cash flows from financing activities:
      Increase in commercial paper                      5,242        3,559
      Proceeds from issuance of long-term debt          2,000        2,034
      Dividends paid                                   (1,262)      (1,112)
      Payment of long-term debt                        (2,041)        (578)
      Purchase of Company stock                        (3,580)      (3,508)
      Other financing activities                         (461)         (35)
            Net cash provided by (used in)
             financing activities                        (102)         360

    Effect of exchange rates on cash                      (89)          11
    Net increase (decrease) in cash and cash equivalents  185         (490)
    Cash and cash equivalents at beginning of year      5,488        5,199
    Cash and cash equivalents at end of period         $5,673       $4,709

     Certain reclassifications have been made to the prior period to conform
     to the current presentation.

SOURCE: Wal-Mart Stores, Inc.

CONTACT: investor relations, 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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