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Market Overview

Highlights from Wal-Mart's Q4 Earnings Conference Call


Below are some highlights from Wal-Mart's (NYSE: WMT) fourth-quarter earnings conference call:

  • Operational adjustments to lower expense base, they were not sufficient to deliver leverage for the full-year.
  • Consolidated underlying operating income rose 0.2%, but on a reported basis operating income decreased 3.1% for the year.
  • Like many other retailers, weather got the best of Wal-Mart throughout the back half resulting in a fourth-quarter period comp decrease of 0.4%.
  • Sam's Club had the strongest annual membership and growth in many years driven primarily by the fee increase.
    • Solid 9% increase in membership income at Sam's Club.
    • But net sales few more slowly than expected.
  • Each operating segment strengthened its e-commerce platforms,
    • Customers responded, driving annual global e-commerce sales above the $10 billion mark, a 30% increase (including sales from our Yihaodian acquisition).
    • Wal-Mart's focus is to invest in the capabilities that connect with customers on their terms.
    • Ability to combine online and mobile, with the assets of the world's largest retailer; position to win at the intersection of physical and digital retail which is a competitive advantage.
    • Increase e-commerce investment as opportunities present themselves; committed to updating shareholders more often on this important growth area.
  • Improved comp sales by sharpening EDLP focus and increasing merchandise innovation to drive more traffic.
    • Comps sales improvement is a key priority, and we'll use a combination of price investment and enhanced service to accomplish this.
  • Great opportunity to accelerate our small format store rollout to complement Wal-Mart's core Supercenter fleet.
  • We'll also improve our capital efficiency in our core business and foster an environment that leverages best practices.
  • Net sales increase of 1.4%
    • The increase was primarily driven by the sale of certain real estate assets within U.S. segments, which was recognized in other income.
  • Operating expenses as a percentage of sales were 18.9%, an increase of 73 basis points driven primarily by Sam's Club and Wal-Mart International.

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Posted-In: Earnings News

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