Pre-Recorded Phone Call
- Q3 EPS of $0.84 Exceeds First Call Consensus of $0.81
- Income from Continuing Operations Increases 7 Percent
- Raises Range of Full-Year EPS Guidance to $3.57 to $3.61
Net sales for the third quarter were
"Walmart's record third quarter earnings of
"The sales environment continued to be difficult this quarter, but customer traffic is up throughout the company. We gained market share, especially in
"We are encouraged by both our traffic and market share gains across the company," he added. "Few companies have the momentum or opportunity that Walmart has around the world."
The company continues to generate strong free cash flow - nearly
Net Sales
Net sales were as follows (dollars in billions):
Three Months Ended Nine Months Ended
October 31, October 31,
------------------------- ---------------------------
Percent Percent
2009 2008 Change 2009 2008 Change
---- ---- ----- ---- ---- ------
Net Sales:
Walmart U.S. $61.807 $61.075 1.2% $187.260 $184.055 1.7%
International 25.307 24.905 1.6% 70.535 74.089 -4.8%
Sam's Club 11.553 11.639 -0.7% 34.425 35.063 -1.8%
------ ------ ---- ------ ------ ----
Total Company $98.667 $97.619 1.1% $292.220 $293.207 -0.3%
Segment Operating Income
Segment operating income was as follows (dollars in billions):
Three Months Ended Nine Months Ended
October 31, October 31,
------------------------- --------------------------
Percent Percent
2009 2008 Change 2009 2008 Change
---- ---- ------- ---- ---- -------
Segment Operating
Income:
Walmart U.S. $4.525 $4.232 6.9% $13.890 $13.219 5.1%
International 1.119 1.182 -5.3% 3.142 3.450 -8.9%
Sam's Club 0.395 0.374 5.6% 1.207 1.208 -0.1%
Comparable Store Sales
The company reports U.S. comparable store sales in this earnings release based on its 13-week retail calendar periods ended
Without Fuel With Fuel Fuel Impact
------------ --------- -----------
13 Weeks Ended 13 Weeks Ended 13 Weeks Ended
10/30/09 10/31/08 10/30/09 10/31/08 10/30/09 10/31/08
-------- -------- -------- -------- -------- --------
Walmart U.S. -0.5% 2.2% -0.5% 2.2% 0.0% 0.0%
Sam's Club 0.1% 4.1% -1.9% 6.3% -2.0% 2.2%
--- --- ---- --- ---- ---
Total U.S. -0.4% 2.5% -0.8% 2.9% -0.4% 0.4%
Without Fuel With Fuel Fuel Impact
------------ --------- -----------
39 Weeks Ended 39 Weeks Ended 39 Weeks Ended
10/30/09 10/31/08 10/30/09 10/31/08 10/30/09 10/31/08
-------- -------- -------- -------- -------- --------
Walmart U.S. 0.5% 2.9% 0.5% 2.9% 0.0% 0.0%
Sam's Club 1.6% 3.7% -2.3% 6.5% -3.9% 2.8%
--- --- ---- --- ---- ---
Total U.S. 0.6% 3.0% 0.0% 3.4% -0.6% 0.4%
Data in the condensed consolidated financial statements included in this news release are based on the calendar quarters ended
Operating Segments Review
During the third quarter, Walmart U.S. delivered very strong operating performance, fueled by productivity initiatives and efficient inventory management. Operating income increased 6.9 percent on a sales increase of 1.2 percent. Comparable store sales were below expectations, but continued increases in customer traffic and market share gains, especially in grocery and health and wellness, underscore the strength of the underlying business.
Walmart U.S. expects comparable store sales during the 13-week period from
During the third quarter,
International remains Walmart's fastest-growing segment, with strong sales performances in the
Earnings Guidance
"We continue to operate in a very challenging economy and remain dedicated to provide the lowest prices to our customers around the world," said
"Based on our view of the business, we expect diluted earnings per share from continuing operations for the fourth quarter of fiscal year 2010 to be between
Notes
After adoption of a new accounting standard, Walmart has made modifications to its financial statement presentation for minority interests (now referred to as "noncontrolling interests") in its majority-owned subsidiaries. These changes are reflected in Walmart's third quarter condensed consolidated financial statements included in this release. As a result, all references to income from continuing operations or earnings per share from continuing operations in this release refer to income from continuing operations attributable to Walmart, or diluted income per share from continuing operations attributable to Walmart, respectively.
In addition to these changes, beginning
After this earnings release has been furnished to the
This release contains statements as to Walmart management's forecasts of the company's earnings per share for the fiscal quarter and fiscal year to end
Wal-Mart Stores, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
SUBJECT TO RECLASSIFICATION
Three Months Ended Nine Months Ended
October 31, October 31,
(Amounts in millions except
per share data) 2009 2008 2009 2008
--------------- ---- ---- ---- ----
Revenues:
Net sales $98,667 $97,619 $292,220 $293,207
Membership and other income 744 726 2,343 2,420
----------------------------- --- --- ----- -----
99,411 98,345 294,563 295,627
Costs and expenses:
Cost of sales 73,805 73,621 219,346 222,111
Operating, selling, general
and administrative
expenses 20,013 19,432 58,525 57,095
---------- ------ ------ ------ ------
Operating income 5,593 5,292 16,692 16,421
---------------- ----- ----- ------ ------
Interest:
Debt 442 464 1,337 1,402
Capital leases 68 73 206 222
Interest income (35) (81) (128) (216)
----------------- --- --- ---- ----
Interest, net 475 456 1,415 1,408
--------------- --- --- ----- -----
Income from continuing
operations before income
taxes 5,118 4,836 15,277 15,013
Provision for income taxes 1,758 1,690 5,214 5,186
-------------------------- ----- ----- ----- -----
Income from continuing
operations 3,360 3,146 10,063 9,827
(Loss) income from
discontinued operations,
net of tax (7) 105 (22) 146
----------- -- --- --- ---
Consolidated net income 3,353 3,251 10,041 9,973
Less consolidated net
income attributable to
noncontrolling interest (114) (113) (338) (365)
------------------------ ---- ---- ---- ----
Consolidated net income
attributable to Walmart $3,239 $3,138 $9,703 $9,608
------------------------ ------ ------ ------ ------
Income from continuing
operations attributable to
Walmart:
Income from continuing
operations $3,360 $3,146 $10,063 $9,827
Less consolidated net
income attributable to
noncontrolling interest (114) (113) (338) (365)
------------------------- ---- ---- ---- ----
Income from continuing
operations attributable to
Walmart $3,246 $3,033 $9,725 $9,462
-------- ------ ------ ------ ------
Basic net income per common
share:
Basic income per share from
continuing operations
attributable to Walmart $0.84 $0.77 $2.50 $2.40
Basic income per share from
discontinued operations
attributable to Walmart - 0.03 - 0.04
------------------------- --- ---- --- ----
Basic net income per share
attributable to Walmart $0.84 $0.80 $2.50 $2.44
------------------------- ----- ----- ----- -----
Diluted net income per
common share:
Diluted income per share
from continuing operations
attributable to Walmart $0.84 $0.77 $2.50 $2.39
Diluted income (loss) per
share from discontinued
operations
attributable to Walmart - 0.03 (0.01) 0.04
-------------------------- --- ---- ----- ----
Diluted net income per
share attributable to
Walmart $0.84 $0.80 $2.49 $2.43
---------- ----- ----- ----- -----
Weighted-average number of
common shares:
Basic 3,851 3,931 3,887 3,944
Diluted 3,861 3,944 3,897 3,956
Dividends declared per
common share $- $- $1.09 $0.95
Wal-Mart Stores, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
SUBJECT TO
RECLASSIFICATION
October 31, January 31,
------------------ -----------
(Amounts in millions) 2009 2008 2009
-------------------- ---- ---- ----
ASSETS
Current assets:
Cash and cash
equivalents $6,003 $5,920 $7,275
Receivables 3,776 3,250 3,905
Inventories 38,775 40,416 34,511
Prepaid expenses and
other 3,249 3,245 3,063
Current assets of
discontinued operations 145 262 195
------------------------ --- --- ---
Total current assets 51,948 53,093 48,949
Property and equipment,
at cost:
Property and equipment,
at cost 135,152 125,173 125,820
Less accumulated
depreciation (36,716) (31,467) (32,964)
--------------- ------- ------- -------
Property and equipment,
net 98,436 93,706 92,856
Property under capital
lease:
Property under capital
lease 5,618 5,420 5,341
Less accumulated
amortization (2,833) (2,581) (2,544)
--------------- ------ ------ ------
Property under capital
lease, net 2,785 2,839 2,797
Goodwill 16,162 15,416 15,260
Other assets and
deferred charges 3,603 2,789 3,567
----------------- ----- ----- -----
Total assets $172,934 $167,843 $163,429
---------------- -------- -------- --------
LIABILITIES AND EQUITY
Current liabilities:
Commercial paper and
other short-term
borrowings $5,239 $7,932 $1,506
Accounts payable 30,920 30,782 28,849
Dividends payable 1,021 993 -
Accrued liabilities 16,638 15,343 18,112
Accrued income taxes 810 355 677
Long-term debt due
within one year 4,169 4,753 5,848
Obligations under capital
leases due within one
year 344 314 315
Current liabilities of
discontinued operations 38 152 83
-------------------------- --- --- ---
Total current
liabilities 59,179 60,624 55,390
Long-term debt 34,394 30,803 31,349
Long-term obligations
under capital leases 3,207 3,268 3,200
Deferred income taxes
and other 6,202 5,575 6,014
Redeemable
noncontrolling interest 310 - 397
Commitments and contingencies
Equity:
Common stock and capital
in excess of par value 4,134 4,219 4,313
Retained earnings 64,105 59,809 63,660
Accumulated other
comprehensive (loss)
income (551) 1,511 (2,688)
------- ---- ----- ------
Total Walmart
shareholders' equity 67,688 65,539 65,285
------------------------- ------ ------ ------
Noncontrolling interest 1,954 2,034 1,794
----------------------- ----- ----- -----
Total equity 69,642 67,573 67,079
---------------- ------ ------ ------
Total liabilities and
equity $172,934 $167,843 $163,429
----------- -------- -------- --------
Wal-Mart Stores, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
SUBJECT TO RECLASSIFICATION
Nine Months Ended
October 31,
-------------
(Amounts in millions) 2009 2008
---- ----
Cash flows from operating activities:
Consolidated net income $10,041 $9,973
Loss (income) from discontinued operations, net of tax 22 (146)
-------------------------------------------------------- --- ----
Income from continuing operations 10,063 9,827
Adjustments to reconcile income from continuing
operations to net cash provided by operating
activities:
Depreciation and amortization 5,255 5,054
Other 225 637
Changes in certain assets and liabilities, net of
effects of acquisitions:
Decrease in accounts receivable 540 394
Increase in inventories (3,415) (5,655)
Increase in accounts payable 1,028 914
Decrease in accrued liabilities (1,256) (745)
------------------------------------- ------ ----
Net cash provided by operating activities 12,440 10,426
Cash flows from investing activities:
Payments for property and equipment (8,885) (8,174)
Proceeds from disposal of property and equipment 265 779
Proceeds from disposal of certain international
operations, net - 838
Investment in international operations, net of cash
acquired - (74)
Other investing activities (41) (166)
---------------------------- --- ----
Net cash used in investing activities (8,661) (6,797)
Cash flows from financing activities:
Increase in commercial paper and other short-term
borrowings, net 3,475 2,949
Proceeds from issuance of long-term debt 5,465 5,568
Payment of long-term debt (4,799) (5,064)
Dividends paid (3,179) (2,814)
Purchase of Company stock (5,105) (3,521)
Purchase of redeemable noncontrolling interest (456) -
Other financing activities (327) (165)
---------------------------- ---- ----
Net cash used in financing activities (4,926) (3,047)
Effect of exchange rates on cash (125) (231)
-------------------------------- ---- ----
Net (decrease) increase in cash and cash equivalents (1,272) 351
Cash and cash equivalents at beginning of year (1) 7,275 5,569
-------------------------------------------------- ----- -----
Cash and cash equivalents at end of period $6,003 $5,920
------------------------------------------ ------ ------
(1) Includes cash and cash equivalents of discontinued operations of
$77
million
at
January 31, 2008
.
Free Cash Flow
We define free cash flow as net cash provided by operating activities in a period minus payments for property and equipment made in that period. We generated positive free cash flow of
Free cash flow is considered a non-GAAP financial measure under the
Additionally, our definition of free cash flow is limited, in that it does not represent residual cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations or payments made for business acquisitions. Therefore, we believe it is important to view free cash flow as a measure that provides supplemental information to our entire statement of cash flows.
Although other companies report their free cash flow, numerous methods may exist for calculating a company's free cash flow. As a result, the method used by our management to calculate free cash flow may differ from the methods other companies use to calculate their free cash flow. We urge you to understand the methods used by another company to calculate its free cash flow before comparing our free cash flow to that of such other company.
The following table sets forth a reconciliation of free cash flow, a non-GAAP financial measure, to net cash provided by operating activities, a GAAP measure, which we believe to be the GAAP financial measure most directly comparable to free cash flow, for the nine months ended
Nine Months Ended
(Amounts in millions) October 31, 2009 October 31, 2008
---------------- ----------------
Net cash provided by operating activities $12,440 $10,426
Payments for property and equipment (8,885) (8,174)
------ ------
Free cash flow $3,555 $2,252
====== ======
Net cash used in investing activities $(8,661) $(6,797)
Net cash used in financing activities $(4,926) $(3,047)
SOURCE
Investor Relations, Carol Schumacher, +1-479-277-1498
or Mike Beckstead, +1-479-277-9558
or Media Relations, John Simley, 1-800-331-0085
or for Pre-recorded Conference Call, 1-800-778-6902 (U.S. and Canada), +1-585-219-6420 (All other countries), all of Wal-Mart Stores, Inc.