Wal-Mart Reports Record Fourth Quarter Sales and Earnings

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.

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                                 Pauline Tureman, +1-479-277-9558
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