Wal-Mart Reports Second Quarter Sales and Earnings

BENTONVILLE, Ark., Aug 14, 2007 -- Wal-Mart Stores, Inc. (NYSE: WMT) today reported its sales and earnings for the quarter ended July 31, 2007. Net sales for the second quarter of fiscal year 2008 were $91.99 billion, an increase of 8.8 percent over the second quarter of fiscal year 2007. Income from continuing operations for the quarter was $3.11 billion, an increase of 4.1 percent from $2.98 billion in the second quarter of fiscal year 2007.

Earnings per share from continuing operations were $0.76, up from $0.72 per share in the same prior year quarter. Earnings per share from continuing operations for the second quarter were impacted by three items that provided a net benefit of $171 million after tax, or $.04 per share. Accruals for general liability and workers' compensation claims were reduced by $196 million after tax. The Company also recognized $41 million in after tax gains from the sale of certain real estate properties. These benefits were offset by charges of $66 million after tax for legal and other contingencies.


    Net Sales
    Net sales were as follows (dollars in billions):

                             Three Months Ended         Six Months Ended
                                  July 31,                  July 31,
                                             Percent                   Percent
                             2007     2006   Change   2007      2006    Change
    Net Sales:
      Wal-Mart Stores      $59.013  $55.389   6.5%  $114.450  $107.888   6.1%
      Sam's Club            11.377   10.472   8.6%    21.700    20.247   7.2%
      International         21.600   18.663  15.7%    41.227    35.224  17.0%
      Total Company        $91.990  $84.524   8.8%  $177.377  $163.359   8.6%


"Although some people will report that Wal-Mart has had record sales and earnings, our underlying operating performance this quarter is not what we expect of ourselves, and not what our shareholders expect of us," said Lee Scott, Wal-Mart Stores, Inc. president and chief executive officer. "For the remainder of this year, our management team is focused on inventory improvements, delivering quality products at low prices, and store execution at the highest standards."

Scott pointed out that consumers continue to be under pressure economically.

"Many customers around the world continue to be under economic pressure and they expect Wal-Mart to be their advocate," Scott continued. "We will continue to be the undisputed price leader, from Asda in the United Kingdom, to every market in the United States."

Segment Operating Income

Segment Operating income from continuing operations for each of the Company's operating segments, which is defined as income before net interest expense, income taxes, unallocated corporate overhead, minority interest and discontinued operations, was as follows (dollars in billions):


                                  Three Months Ended      Six Months Ended
                                       July 31,               July 31,
                                                Percent                Percent
                                  2007    2006  Change   2007    2006  Change
    Segment Operating Income:
      Wal-Mart Stores            $4.273  $4.116   3.8%  $8.201  $7.974   2.8%
      Sam's Club                  0.447   0.402  11.2%   0.810   0.704  15.1%
      International               1.042   0.991   5.1%   1.945   1.748  11.3%


As the Company discussed in the first quarter of fiscal 2008, the above measurement of segment operating income was changed starting in the first quarter to be consistent with certain changes to internal management reporting. Therefore, certain direct segment costs that were previously retained and managed as corporate overhead costs are now allocated to the appropriate operating segment.

Comparable Store Sales

    The Company reports comparable store sales in this earnings release based
on the calendar months in the quarters and the six-month periods ended July
31, 2007 and 2006.  Comparable store sales for the United States were as
follows:

                         Without Fuel         With Fuel         Fuel Impact
                    Three Months Ended  Three Months Ended  Three Months Ended
                          July 31,             July 31,           July 31,
                         2007  2006          2007    2006       2007   2006

    Wal-Mart Stores     1.2%  1.5%          1.2%     1.5%       0.0%    0.0%
    Sam's Club          5.9%  2.6%          6.5%     3.6%       0.6%    1.0%
      Total U.S.        1.9%  1.7%          2.0%     1.8%       0.1%    0.1%


                         Without Fuel         With Fuel         Fuel Impact
                       Six Months Ended   Six Months Ended   Six Months Ended
                          July 31,             July 31,           July 31,
                         2007  2006          2007    2006       2007   2006

    Wal-Mart Stores     0.6%  2.6%          0.6%     2.6%       0.0%    0.0%
    Sam's Club          5.3%  3.4%          5.4%     4.2%       0.1%    0.8%
      Total U.S.        1.3%  2.7%          1.3%     2.8%       0.0%    0.1%


Guidance

For the third quarter of fiscal 2008, the Company estimates the comparable store sales increase in the United States to be between 1 and 3 percent.

The Company estimates earnings per share from continuing operations for the third quarter of fiscal 2008 to come in between $0.62 and $0.65. In addition, the Company is updating its full year guidance for earnings per share from continuing operations for the full year of fiscal 2008, which it estimates to be between $3.05 and $3.13. The Company's initial forecast for earnings per share from continuing operations for fiscal year 2008 was between $3.15 and $3.23 per share.

"The Company's current earnings guidance reflects the need to continue to improve our underlying operating performance," said Tom Schoewe, Wal-Mart Stores, Inc. executive vice president and chief financial officer. "This guidance also reflects the economic trends that have developed in many of our major markets."

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. Callers may listen to this call by dialing 203-369-1090. The information included in this release and the pre-recorded phone call will be available in the investor information area on the Company's WebSite at http://www.walmartstores.com/investors.

Wal-Mart Stores, Inc. operates Wal-Mart discount 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, Guatemala, Honduras, Japan, Mexico, Nicaragua, Puerto Rico and the United Kingdom. The Company's common stock is listed on the New York Stock Exchange under the symbol WMT.

More information about Wal-Mart can be found by visiting http://www.walmartstores.com. Online merchandise sales are available at http://www.walmart.com and http://www.samsclub.com.

This release contains statements as to the Company's continuing price leadership and the Company's estimate of its comparable store sales for the third quarter of fiscal year 2008 and its estimate of its earnings per share from continuing operations for the third quarter of fiscal year 2008 and for all of fiscal year 2008 that Wal-Mart believes are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are intended to enjoy the protection of the safe harbor for forward-looking statements provided by that act. They can be identified by the use of the word "estimates" or phrase "will continue" in the statements. 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 the costs of gasoline, diesel fuel, other energy, transportation, utilities, labor and health care, accident costs, casualty and other insurance costs, interest rate fluctuations, capital market conditions, weather conditions, storm-related damage to the Company's facilities, regulatory matters and other risks. The Company discusses certain of these factors more fully in its additional filings with the SEC, including its 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, together with all of the Company's other filings, including current reports on Form 8-K, made with the SEC through the date of this release. The Company urges 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, changes in facts, assumptions not being realized or other circumstances, the Company's actual results may differ materially from the expected results discussed in the forward-looking statements contained in this release. The forward-looking statements made in this release are made only as of the date of this release, and the Company undertakes no obligation to update them to reflect subsequent events or circumstances.



                     WAL-MART STORES, INC.  AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)
                   (Amounts in millions except per share data)

    SUBJECT TO RECLASSIFICATION

                                        Three Months Ended  Six Months Ended
                                             July 31,           July 31,
                                          2007     2006      2007      2006
    Revenues:
      Net sales                          $91,990  $84,524  $177,377  $163,359
      Membership and other income          1,022      906     2,045     1,746
                                          93,012   85,430   179,422   165,105

    Costs and expenses:
      Cost of sales                       70,589   64,585   135,900   124,822
      Operating, selling, general and
       administrative expenses            17,130   15,741    33,379    30,683
    Operating income                       5,293    5,104    10,143     9,600

    Interest:
      Debt                                   446      387       852       754
      Capital leases                          42       69       111       137
      Interest income                        (82)     (63)     (165)     (131)
      Interest, net                          406      393       798       760

    Income from continuing operations
     before income taxes and minority
     interest                              4,887    4,711     9,345     8,840

    Provision for income taxes             1,676    1,636     3,208     3,025
    Income from continuing operations
     before minority interest              3,211    3,075     6,137     5,815
    Minority interest                       (106)     (91)     (206)     (170)
    Income from continuing operations      3,105    2,984     5,931     5,645
    Loss from discontinued operations,
     net of tax                               --     (901)       --      (947)
    Net income                            $3,105   $2,083    $5,931    $4,698

    Net income per common share:
      Basic and diluted income per common
       share from continuing operations    $0.76    $0.72     $1.44     $1.35
      Basic and diluted loss per common
       share from discontinued operations     --    (0.22)       --     (0.22)
      Basic and diluted net income per
       common share                        $0.76    $0.50     $1.44     $1.13

    Weighted-average number of common
     shares:
      Basic                                4,102    4,168     4,112     4,167
      Diluted                              4,108    4,172     4,118     4,171

    Dividends declared per common share      $--      $--     $0.88     $0.67



                     WAL-MART STORES, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
                              (Amounts in millions)

    SUBJECT TO RECLASSIFICATION

                                             July 31,    July 31,  January 31,
                                               2007       2006        2007
                ASSETS
    Current assets:
    Cash and cash equivalents                 $6,094      $6,386      $7,373
    Receivables                                2,767       2,522       2,840
    Inventories                               34,184      32,087      33,685
    Prepaid expenses and other                 3,342       3,307       2,690
    Current assets of discontinued operations     --       1,870          --
        Total current assets                  46,387      46,172      46,588

    Property and equipment, at cost          116,654     103,121     109,798
    Less accumulated depreciation            (26,773)    (23,198)    (24,408)
        Property and equipment, net           89,881      79,923      85,390

    Property under capital leases              5,515       5,523       5,392
    Less accumulated amortization             (2,448)     (2,264)     (2,342)
        Property under capital leases, net     3,067       3,259       3,050

    Goodwill                                  14,655      13,269      13,759
    Other assets and deferred charges          2,959       2,165       2,406
        Total assets                        $156,949    $144,788    $151,193

      LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities:
    Commercial paper                          $8,117      $6,072      $2,570
    Accounts payable                          27,748      26,023      28,090
    Dividends payable                          1,794       1,305         -
    Accrued liabilities                       13,903      13,028      14,675
    Accrued income taxes                         170         700         706
    Long-term debt due within one year         3,176       6,235       5,428
    Obligations under capital leases due
     within one year                             189         196         285
    Current liabilities of discontinued
     operations                                   --         580          --
    Total current liabilities                 55,097      54,139      51,754

    Long-term debt                            27,966      24,099      27,222
    Long-term obligations under capital
     leases                                    3,594       3,883       3,513
    Deferred income taxes and other            5,449       4,741       4,971
    Minority interest                          2,404       1,554       2,160

    Commitments and contingencies

    Shareholders' equity:
    Common stock and capital in excess of
     par value                                 3,412       3,165       3,247
    Retained earnings                         55,567      51,091      55,818
    Accumulated other comprehensive income     3,460       2,116       2,508
    Total shareholders' equity                62,439      56,372      61,573
    Total liabilities and shareholders'
     equity                                 $156,949    $144,788    $151,193



                     WAL-MART STORES, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                              (Amounts in millions)
                                                       Six Months Ended
    SUBJECT TO RECLASSIFICATION                            July 31,
                                                     2007              2006
    Cash flows from operating activities:
      Net income                                    $5,931            $4,698
      Loss from discontinued operations, net of tax     --               947
      Income from continuing operations              5,931             5,645
      Adjustments to reconcile income from
       continuing operations to net cash
       provided by operating activities:
        Depreciation and amortization                3,060             2,642
        Other                                           68              (443)
        Changes in certain assets and liabilities,
         net of effects of acquisitions:
          Decrease in accounts receivable              255               134
         (Increase) decrease in inventories            (64)              134
         (Decrease) increase in accounts payable    (1,134)              224
          Decrease in accrued liabilities           (1,524)           (1,030)
    Net cash provided by operating activities of
     continuing operations                           6,592             7,306
    Net cash used in operating activities of
     discontinued operations                            --               (46)
    Net cash provided by operating activities        6,592             7,260

    Cash flows from investing activities:
      Payments for property and equipment           (6,971)           (6,812)
      Proceeds from disposal of property and
       equipment                                       319                94
      Investment in international operations, net
       of cash acquired                               (467)              (68)
      Other investing activities                       (61)              (18)
    Net cash used in investing activities of
     continuing operations                          (7,180)           (6,804)
    Net cash provided by investing activities of
     discontinued operations                            --                45
    Net cash used in investing activities           (7,180)           (6,759)

    Cash flows from financing activities:
      Increase in commercial paper                   5,487             2,297
      Proceeds from issuance of long-term
       debt                                          3,818             1,932
      Payment of long-term debt                     (5,435)           (2,797)
      Dividends paid                                (1,811)           (1,408)
      Purchase of Company stock                     (2,484)               --
      Other financing activities                      (435)             (393)
    Net cash used in financing activities             (860)             (369)

    Effect of exchange rates on cash                   169                71
    Net (decrease) increase in cash and cash
     equivalents                                    (1,279)              203
    Cash and cash equivalents at
     beginning of year (1)                           7,373             6,414
    Cash and cash equivalents at end of period (2)  $6,094            $6,617

    (1) Includes cash and cash equivalents of discontinued operations of $221
        million at January 31, 2006.
    (2) Includes cash and cash equivalents of discontinued operations of $231
        million at July 31, 2006.


SOURCE Wal-Mart Stores, Inc.

investors, Investor Relations, +1-479-273-8446, or Carol Schumacher, +1-479-277-1498,
or Anthony Clark, +1-479-277-9558, or media, John Simley, 1-800-331-0085, all of
Wal-Mart Stores, Inc., Pre-recorded Conference Call, +1-203-369-1090
http://www.walmartstores.com