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Walmart Underscores Its Unique Assets, Strong Execution and Innovation at Its Investment Community Meeting

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  • The company reiterates its FY19 total sales growth expectations and
    updates FY19 GAAP and adjusted EPS to include the expected 25 cents
    per share Flipkart dilution.
  • FY19 GAAP EPS guidance is now $2.65 to $2.801,
    and FY19 adjusted EPS guidance is now $4.65 to $4.80
    1.
    This compares to previous guidance of GAAP EPS of $2.90 to $3.05 and
    adjusted EPS of $4.90 to $5.05.
  • Walmart expects total FY20 sales growth to be 3 percent or greater,
    negatively affected by about 100 basis points due to the
    deconsolidation of the Brazil operations and planned reduction in
    tobacco sales at Sam's Club.
  • Walmart U.S. comp sales growth is expected to be in a range of 2.5
    percent to 3 percent and eCommerce net sales growth is expected to be
    around 35 percent for FY20.
  • FY20 operating income is expected to decline by a low single digit
    percentage range, but is expected to increase by a low single digit
    percentage range when excluding Flipkart in both FY19 and FY20.
  • FY20 EPS is expected to decline by a low single digit percentage
    range versus FY19 adjusted EPS
    2. Excluding
    Flipkart, EPS is expected to increase by a low to mid-single digit
    percentage range versus FY19 adjusted EPS.

Today, Walmart will host its annual meeting for the investment community
where its leadership team will discuss how the company is shaping its
future, moving with speed and innovating for tomorrow to win for
customers and shareholders. The company is also sharing select guidance
metrics for the next fiscal year.

"We're adapting and transforming with speed to better serve our existing
customers and reach new ones," said Walmart President and CEO, Doug
McMillon. "We're operating with discipline, balancing our short and
long-term opportunities. While we're excited about what we've done so
far, we aren't satisfied. As we execute today and build for tomorrow,
our associates and unique omni-channel assets position us for success."

McMillon will discuss:

  • Progress over the past year at Walmart U.S., including strong traffic
    and comp sales, online grocery pickup and delivery, and associate
    empowerment and training.
  • Walmart's focus on price leadership, broad assortment and efforts to
    save customers more time by making shopping easier, faster and more
    enjoyable.
  • Momentum in areas such as eCommerce, logistics and partnerships.
  • Distinctive assets, key investments and acquisitions, including
    Flipkart in India.
  • Innovations that are enabling Walmart to serve local communities and
    customers around the world, such as last mile delivery, reducing
    supplier emissions, pioneering blockchain for food safety at scale,
    and leveraging machine learning across the enterprise.
  • How the company is utilizing this period of transformation in retail
    to invest thoughtfully, plant seeds for the future and generate solid
    financial results.

1Fiscal 2019 guidance provided in August 2018 did not include
the impact of Flipkart as the transaction had not closed at the time the
guidance was provided. GAAP EPS includes unrealized gains and losses on
the JD.com investment and tax reform adjustments through the second
quarter of fiscal 2019. GAAP EPS and adjusted EPS exclude the impact of
other strategic decisions that could occur during the remainder of
fiscal 2019. See additional information at the end of this release for
the non-GAAP financial measure.

2 FY20 EPS is expected to increase versus FY19 GAAP EPS.

Financial Framework

Walmart CFO Brett Biggs will outline the company's financial framework
of strong, efficient growth, operating discipline and strategic capital
allocation to drive long-term shareholder value.

Biggs commented, "I feel great about Walmart's position in this rapidly
changing retail landscape. We are leveraging our scale, assets and
financial strength in ways unique to Walmart to enhance and build
competitive advantages. We continue to operate with discipline, we're
strengthening our cost culture and we're leveraging technology, data and
analytics in new ways to be more productive. Our financial strength
gives us the flexibility to deliver near-term results while making
strategic decisions for the longer term."

     

Fiscal Year 2020 Guidance

 
Metrics      

FY20 Guidance
(includes Flipkart unless otherwise
noted)

Consolidated net sales growth

     

At least 3 percent in constant currency, negatively affected by:

  • Deconsolidation of Walmart Brazil
  • Planned tobacco sales reduction at Sam's Club

Estimated combined negative affect: ~100 bps

Comp sales growth

     
  • Walmart U.S.: +2.5 percent to +3 percent (excluding fuel)
  • Sam's Club: around +1% (excluding fuel); around +3 percent
    (excluding fuel and tobacco)

Walmart U.S. eCommerce net sales growth

      Around 35 percent

Walmart International net sales growth

     

Around 5 percent in constant currency

  • Includes the positive affect of Flipkart and the negative affect
    of the deconsolidation of Walmart Brazil

Consolidated Operating Income

     
  • Decline by a low-single digit percentage range
  • Increase by a low-single digit percentage range (excluding
    Flipkart)

EPS

     
  • Decline by a low single digit percentage range compared with
    FY19 adjusted EPS1
  • Increase by a low to mid-single digit percentage range compared
    with FY19 adjusted EPS (excluding Flipkart)

Effective tax rate

     

Approximately 26.5 percent - 27.5 percent

Expense leverage

      Approximately 20 bps

Grocery pickup and delivery

      Approximately 3,100 grocery pickup and 1,600 grocery delivery
locations by year-end FY20

Capital expenditures

     

Approximately $11 billion

  • Strong focus on store remodels, customer initiatives, eCommerce,
    technology and supply chain

New units

     
  • Walmart U.S. expects to open fewer than 10 stores
  • Walmart International expects to open slightly more than 300 new
    stores primarily in Walmex and China
 

About Walmart

Walmart Inc. (NYSE:WMT) helps people around the world save money and
live better - anytime and anywhere - in retail stores, online, and
through their mobile devices. Each week, nearly 265 million customers
and members visit our more than 11,200 stores under 55 banners in 27
countries and eCommerce websites. With fiscal year 2018 revenue of
$500.3 billion, Walmart employs over 2.2 million associates worldwide.
Walmart continues to be a leader in sustainability, corporate
philanthropy and employment opportunity. Additional information about
Walmart can be found by visiting http://corporate.walmart.com,
on Facebook at http://facebook.com/walmart
and on Twitter at http://twitter.com/walmart.

1 FY20 EPS is expected to increase versus FY19 GAAP EPS.

Forward-Looking Statements

This release contains statements as to Walmart management's guidance
regarding earnings per share, adjusted earnings per share, consolidated
net sales growth, Walmart U.S. eCommerce sales growth, Walmart
International sales growth, capital expenditures, expense leverage,
number of new store units and Walmart's effective tax rate for the
fiscal year ending January 31, 2019 and January 31, 2020, and comparable
sales (excluding fuel) for Walmart U.S. and Sam's Club for the 52 weeks
ending January 24, 2020. Walmart believes such statements are
"forward-looking statements" as defined in, and are intended to enjoy
the protection of the safe harbor for forward-looking statements within
the meaning of Section 21E of the Securities Exchange Act of 1934, as
amended. Assumptions on which such forward-looking statements are based
are also forward-looking statements. Walmart's actual results may differ
materially from the guidance provided as a result of changes in
circumstances, assumptions not being realized or other risks,
uncertainties and factors including:

  • economic, geo-political, capital markets and business conditions,
    trends and events around the world and in the markets in which Walmart
    operates;
  • currency exchange rate fluctuations, changes in market interest rates
    and commodity prices;
  • unemployment levels; competitive pressures; inflation or deflation,
    generally and in particular product categories;
  • consumer confidence, disposable income, credit availability, spending
    levels, shopping patterns, debt levels and demand for certain
    merchandise;
  • consumer enrollment in health and drug insurance programs and such
    programs' reimbursement rates;
  • the amount of Walmart's net sales denominated in the U.S. dollar and
    various foreign currencies;
  • the impact of acquisitions, investments, divestitures, store or club
    closures, and other strategic decisions;
  • Walmart's ability to successfully integrate acquired businesses,
    including within the eCommerce space;
  • Walmart's effective tax rate and the factors affecting Walmart's
    effective tax rate, including assessments of certain tax
    contingencies, valuation allowances, changes in law, administrative
    audit outcomes, impact of discrete items and the mix of earnings
    between the U.S. and Walmart's international operations;
  • changes in existing tax, labor and other laws and regulations and
    changes in tax rates, trade agreements, trade restrictions and tariff
    rates;
  • customer traffic and average ticket in Walmart's stores and clubs and
    on its eCommerce websites;
  • the mix of merchandise Walmart sells, the cost of goods it sells and
    the shrinkage it experiences;
  • the amount of Walmart's total sales and operating expenses in the
    various markets in which it operates;
  • transportation, energy and utility costs and the selling prices of
    gasoline and diesel fuel;
  • supply chain disruptions and disruptions in seasonal buying patterns;
  • consumer acceptance of and response to Walmart's stores, clubs,
    digital platforms, programs, merchandise offerings and delivery
    methods;
  • cyber security events affecting Walmart and related costs;
  • developments in, outcomes of, and costs incurred in legal or
    regulatory proceedings to which Walmart is a party;
  • casualty and accident-related costs and insurance costs;
  • the turnover in Walmart's workforce and labor costs, including
    healthcare and other benefit costs;
  • changes in accounting estimates or judgments;
  • the level of public assistance payments;
  • natural disasters, public health emergencies, civil disturbances, and
    terrorist attacks; and
  • Walmart's expenditures for Foreign Corrupt Practices Act "FCPA" and
    other compliance related costs, including the adequacy of the accrual
    with respect to this matter.

Such risks, uncertainties and factors also include the risks relating to
Walmart's strategy, operations and performance and the financial, legal,
tax, regulatory, compliance, reputational and other risks discussed in
Walmart's most recent annual report on Form 10-K and subsequent
quarterly reports on Form 10-Q filed with the SEC. Walmart urges you to
consider all of the risks, uncertainties and factors identified above or
discussed in such reports carefully in evaluating the forward-looking
statements in this release. Walmart cannot assure you that the results
reflected or implied by any forward-looking statement will be realized
or, even if substantially realized, that those results will have the
forecasted or expected consequences and effects for or on Walmart's
operations or financial performance. The forward-looking statements made
in this release are as of the date of this release. Walmart undertakes
no obligation to update these forward-looking statements to reflect
subsequent events or circumstances.

Walmart Inc.
Reconciliations of and Other Information
Regarding Non-GAAP Financial Measures
(Unaudited)

The following information provides reconciliations of certain non-GAAP
financial measures presented in the press release to which this
reconciliation is attached to the most directly comparable financial
measures calculated and presented in accordance with generally accepted
accounting principles (GAAP). The company has provided the non-GAAP
financial information presented in the press release, which is not
calculated or presented in accordance with GAAP, as information
supplemental and in addition to the financial measures presented in the
press release that are calculated and presented in accordance with GAAP.
Such non-GAAP financial measures should not be considered superior to,
as a substitute for or alternative to, and should be considered in
conjunction with, the GAAP financial measures presented in the press
release. The non-GAAP financial measures in the press release may differ
from similar measures used by other companies.

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