Feb 21, 2006 -- Wal-Mart Stores, Inc. (NYSE: WMT) reported record sales and earnings for the quarter ended January 31, 2006. Net sales were $89.3 billion, an increase of 8.6 percent over the fourth quarter of fiscal 2005. Net income for the quarter was $3.6 billion, an increase of 13.4 percent from $3.2 billion in the fourth quarter of fiscal 2005. Earnings per share were $0.86, up from $0.75 per share in the same prior year quarter. Fourth quarter earnings in fiscal 2006 were favorably impacted by a $103 million net tax benefit recorded in the company's tax provision. This $0.02 per share net benefit arose from the adjustment of deferred tax balances and resolutions of certain federal and state tax contingencies.
Net sales for the fiscal year ended January 31, 2006, were $312.4 billion, an increase of 9.5 percent over fiscal 2005. Net income for fiscal 2006 increased 9.4 percent to a record $11.2 billion, up from $10.3 billion in fiscal 2005. Earnings per share for fiscal 2006 were $2.68, up from $2.41 in fiscal 2005.
"We're pleased our trend of year-over-year increases in sales and net income continues," said Wal-Mart Stores President and Chief Executive Officer Lee Scott. "We added more than $7 billion in sales in the quarter and ended the year strong."
Scott said he is optimistic about the year as he anticipates positive results from the company's business strategies to improve the customer experience.
"Our entire management team is dedicated to growing sales by making our stores more relevant to today's customers," Scott explained. "We want our merchandise to appeal to a broad range of customers who are already shopping our stores. We want customers to shop Wal-Mart for all their needs, from consumables to electronics, home decor and apparel."
Net sales were as follows (dollars in billions):
Three Months Ended Fiscal Year Ended
January 31, January 31,
Percent Percent
2006 2005 Change 2006 2005 Change
Wal-Mart Stores $60.218 $55.452 8.6% $209.910 $191.826 9.4%
SAM'S CLUB 10.655 9.980 6.8% 39.798 37.119 7.2%
International 18.400 16.784 9.6% 62.719 56.277 11.4%
Total Company $89.273 $82.216 8.6% $312.427 $285.222 9.5%
Total U.S. comparable sales for the fourth quarter of fiscal 2006 increased 3.1 percent, which is represented by a 2.7 percent increase for Wal- Mart Stores and a 5.1 percent increase for SAM'S CLUB. Total U.S. comparable sales for fiscal 2006 were up 3.4 percent, which is comprised of a 3.0 percent increase for Wal-Mart Stores and a 5.0 percent increase for SAM'S CLUB.
Wal-Mart Stores Segment:
For the fourth quarter of fiscal 2006, the Wal-Mart Stores segment had segment operating income (income before net interest expense, income taxes, unallocated corporate overhead and minority interest) of $4.714 billion, an increase of 11.1 percent, compared with $4.242 billion in the fourth quarter of fiscal 2005.
For the fiscal year ended January 31, 2006, the Wal-Mart Stores segment had segment operating income of $15.324 billion, an increase of 8.2 percent, as compared with segment operating income of $14.163 billion in fiscal 2005.
SAM'S CLUB Segment:
The SAM'S CLUB segment had segment operating income for the fourth quarter of fiscal 2006 of $377 million, an increase of 6.2 percent, compared with $355 million in the fourth quarter of fiscal 2005.
For fiscal 2006, the SAM'S CLUB segment had segment operating income of $1.385 billion, an increase of 8.2 percent, as compared with segment operating income of $1.280 billion in fiscal 2005.
International Segment:
The International segment had segment operating income of $1.116 billion for the most recent quarter, an increase of 14.1 percent, compared with $978 million in the fourth quarter of fiscal 2005.
The International segment had segment operating income of $3.330 billion in fiscal 2006, an increase of 11.4 percent, compared with $2.988 billion for fiscal 2005.
Guidance:
The company expects earnings per share for the first quarter of fiscal 2007 to come in between $0.58 and $0.62, and for fiscal 2007, the forecast is $2.88 to $2.95.
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 expectations for fiscal 2007 and the forecast of earnings per share for the first quarter and fiscal year 2007 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 identified by the use of words such as "anticipates," "expects" and "forecast," and 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 Fiscal Year Ended
January 31, January 31,
2006 2005 2006 2005
Revenues:
Net sales $89,273 $82,216 $312,427 $285,222
Other income, net 854 683 3,227 2,910
90,127 82,899 315,654 288,132
Costs and expenses:
Cost of sales 69,045 63,723 240,391 219,793
Operating, selling,
general and
administrative
expenses 15,222 13,878 56,733 51,248
Operating income 5,860 5,298 18,530 17,091
Interest:
Debt 324 284 1,171 934
Capital leases 76 65 249 253
Interest income (78) (52) (248) (201)
Interest, net 322 297 1,172 986
Income before income taxes
and minority interest 5,538 5,001 17,358 16,105
Provision for income taxes 1,835 1,735 5,803 5,589
Income before minority
interest 3,703 3,266 11,555 10,516
Minority interest (114) (102) (324) (249)
Net income $3,589 $3,164 $11,231 $10,267
Basic and diluted net
income per common share: $0.86 $0.75 $2.68 $2.41
Weighted-average number of
common shares:
Basic 4,166 4,235 4,183 4,259
Diluted 4,170 4,242 4,188 4,266
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
January 31, 2006 January 31, 2005
ASSETS
Cash and cash equivalents $6,414 $5,488
Receivables 2,662 1,715
Inventories 32,191 29,762
Prepaid expenses and other 2,591 1,889
Total current assets 43,858 38,854
Property and equipment, at cost 97,302 84,037
Less accumulated depreciation 21,427 18,637
Property and equipment, net 75,875 65,400
Property under capital leases, net 3,415 2,718
Goodwill 12,188 10,803
Other assets and deferred charges 2,833 2,379
Total assets $138,169 $120,154
LIABILITIES AND SHAREHOLDERS' EQUITY
Commercial paper $3,754 $3,812
Accounts payable 25,373 21,987
Accrued liabilities 13,465 12,120
Accrued income taxes 1,322 1,281
Long-term debt due within one year 4,595 3,759
Obligations under capital leases due
within one year 299 223
Total current liabilities 48,808 43,182
Long-term debt 26,429 20,087
Long-term obligations under capital leases 3,742 3,171
Deferred income taxes and other 4,552 2,978
Minority interest 1,467 1,340
Commitments and contingencies
Common stock and capital in excess of
par value 3,013 2,848
Retained earnings 49,105 43,854
Other accumulated comprehensive income 1,053 2,694
Total shareholders' equity 53,171 49,396
Total liabilities and
shareholders' equity $138,169 $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
Fiscal Year Ended
January 31
2006 2005
Cash flows from operating activities:
Net income $11,231 $10,267
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 4,717 4,264
Other 509 641
Changes in certain assets and
liabilities, net of effects of
acquisitions:
Increase in accounts receivable (456) (304)
Increase in inventories (1,733) (2,494)
Increase in accounts payable 2,390 1,694
Increase in accrued liabilities 975 976
Net cash provided by operating
activities 17,633 15,044
Cash flows from investing activities:
Payments for property and equipment (14,563) (12,893)
Disposal of assets 1,049 953
Investment in international operations,
net of cash acquired (601) (315)
Other investing activities (68) (96)
Net cash used in investing
activities (14,183) (12,351)
Cash flows from financing activities:
Increase (decrease) in commercial paper (704) 544
Proceeds from issuance of long-term debt 7,691 5,832
Dividends paid (2,511) (2,214)
Payment of long-term debt (2,724) (2,131)
Purchase of Company stock (3,580) (4,549)
Other financing activities (594) (91)
Net cash used in financing
activities (2,422) (2,609)
Effect of exchange rates on cash (102) 205
Net increase in cash and cash equivalents 926 289
Cash and cash equivalents at beginning
of year 5,488 5,199
Cash and cash equivalents at end of period $6,414 $5,488
Certain reclassifications have been made to the prior period to conform to the current presentation.
SOURCE: Wal-Mart Stores, Inc.
Investor relations: Carol Schumacher, +1-479-277-1498
Pauline Tureman, +1-479-277-9558
Investor Relations, +1-479-273-8446
Media relations: Marty Heires, +1-479-273-4314
Gail Lavielle, +1-479-204-8295
All of Wal-Mart Stores Inc.
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