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    Walmart Inc (WMT)

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    Walmart Inc. is a global omni-channel retailer that offers a wide range of products and services through its three main segments: Walmart U.S., Walmart International, and Sam's Club. The company is involved in mass merchandising, eCommerce, and operates membership-only warehouse clubs, providing products across categories such as grocery, general merchandise, and health and wellness . Walmart emphasizes its omni-channel capabilities, integrating physical stores with eCommerce to enhance customer experience .

    1. Walmart U.S. - Operates as the largest segment, providing mass merchandising and eCommerce services in the U.S., offering products in grocery, general merchandise, and health and wellness categories.
      • Grocery - Includes dry grocery, snacks, dairy, and beverages.
      • General Merchandise - Covers entertainment, hardlines, fashion, and home products.
      • Health and Wellness - Encompasses pharmacy and medical products.
    2. Walmart International - Expands the company's global presence with operations in 18 countries, including eCommerce and omni-channel initiatives.
    3. Sam's Club - Functions as a membership-only warehouse club in the U.S., contributing to revenue through both physical locations and eCommerce.
    NamePositionStart DateShort Bio
    Daniel J. BartlettExecutive Vice President, Corporate AffairsJune 2013Daniel J. Bartlett has been serving as the Executive Vice President, Corporate Affairs at Walmart Inc. since June 2013. Prior to this role, he was the CEO and President of U.S. Operations at Hill & Knowlton, Inc. .
    Rachel BrandExecutive Vice President, Global Governance, Chief Legal Officer, and Corporate SecretaryApril 2018Rachel Brand has been serving in her current roles at Walmart Inc. since April 2018. She was previously the Associate Attorney General in the U.S. Department of Justice .
    David M. ChojnowskiSenior Vice President and ControllerJanuary 2017David M. Chojnowski has been the Senior Vice President and Controller at Walmart Inc. since January 2017. He was previously Vice President and Controller for Walmart U.S. .
    John FurnerExecutive Vice President, President, and Chief Executive Officer, Walmart U.S.November 2019John Furner has been in his current role since November 2019. He was previously the President and CEO of Sam's Club .
    Suresh KumarExecutive Vice President, Global Chief Technology Officer and Chief Development OfficerJuly 2019Suresh Kumar has been serving in his current roles at Walmart since July 2019. He was previously Vice President and General Manager at Google LLC .
    Kathryn McLayExecutive Vice President, President and Chief Executive Officer, Walmart InternationalAugust 2023Kathryn McLay has been in her current role since August 2023. She was previously the President and CEO of Sam's Club .
    C. Douglas McMillonPresident and Chief Executive OfficerFebruary 2014C. Douglas McMillon has been serving as the President and CEO of Walmart Inc. since February 2014. He has held various leadership positions at Walmart over 33 years .
    Donna MorrisExecutive Vice President, Global People, and Chief People OfficerFebruary 2020Donna Morris has been serving in her current roles at Walmart since February 2020. She previously worked at Adobe Inc. as Chief Human Resources Officer and Executive Vice President, Employee Experience .
    Christopher NicholasExecutive Vice President, President and Chief Executive Officer, Sam's ClubSeptember 2023Christopher Nicholas has been in his current role since September 2023. He was previously the Executive Vice President and Chief Operating Officer of Walmart U.S. .
    John David RaineyExecutive Vice President and Chief Financial OfficerJune 2022John David Rainey has been serving as the Executive Vice President and CFO of Walmart Inc. since June 2022. He was previously the CFO and Executive Vice President, Global Customer Operations for PayPal Holdings, Inc. .
    Bob MoritzMember of the Board of Directors, Audit Committee, and Technology and eCommerce CommitteeAugust 15, 2024Bob Moritz was appointed to Walmart's Board of Directors on August 15, 2024. He previously had a long career at PwC, serving as the Global Chair until his retirement in June 2024 .
    1. As you continue to invest in areas like price reductions and wage increases to lay the foundation for future growth, how do you balance these investments with the need to accelerate enterprise-wide profit growth, and are you seeing diminishing returns in these areas that might impact profitability next year and beyond?

    2. With the competitive landscape intensifying, particularly from both traditional and non-traditional retail players, how is Walmart planning to sustain its market share gains in the U.S., and what strategic adjustments are you making in response to competitors' actions?

    3. Given the changes in your fourth-quarter operating income guidance and the significant wage investments at Sam's Club, how are you managing gross margin expectations, especially in light of continued pressure from higher health and wellness sales and potential e-commerce profitability challenges in the U.S.?

    4. With the growth in Walmart Plus memberships, can you elaborate on how this is translating into increased customer spend and loyalty, and how you are leveraging the data from these members to drive growth in your new businesses?

    5. Despite a positive inflection in general merchandise sales, the mix shift towards consumables continues to pressure gross margins; when do you anticipate a more balanced growth between general merchandise and consumables, and what impact will this have on overall gross margin expansion?

    Program DetailsProgram 1
    Approval DateNovember 2022
    End Date/DurationNo expiration date
    Total additional amount$20 billion
    Remaining authorization$13.5 billion (as of 2024-10-31)
    DetailsManage capital structure and return value to shareholders
    YearAmount Due (in millions)Debt TypeInterest Rate (%)% of Total Debt
    20243,579Short-term borrowingsN/A9.7% = (3,579 / 36,891) * 100
    20243,246Long-term debt due within one yearN/A8.8% = (3,246 / 36,891) * 100
    20241,507Operating lease obligationsN/A4.1% = (1,507 / 36,891) * 100
    2024789Finance lease obligationsN/A2.1% = (789 / 36,891) * 100
    2026N/A2.550% Notes2.550N/A
    2026N/A1.050% Notes1.050N/A
    2028N/A1.500% Notes1.500N/A
    2029N/A4.875% Notes4.875N/A
    2030N/A5.750% Notes5.750N/A
    2031N/A1.800% Notes1.800N/A
    2034N/A5.625% Notes5.625N/A
    2035N/A5.250% Notes5.250N/A
    2039N/A4.875% Notes4.875N/A

    Competitors mentioned in the company's latest 10K filing.

    • Brick and mortar, eCommerce, and omni-channel retailers operating department, drug, discount, variety, and specialty stores, supermarkets, hypermarkets, and supercenter-type stores, wholesale clubs, home-improvement stores, specialty electronics stores, cash & carry operations, and convenience stores .
    • Companies offering services in digital advertising, fulfillment services, health and wellness, and financial services .
    • Social commerce platforms .
    • National, regional, or international chains or those with a national or international omni-channel or eCommerce presence .
    • Other discount, department, drug, dollar, variety, and specialty stores, warehouse clubs, and supermarkets .
    • eCommerce, health and wellness, financial services, advertising, and data service businesses .
    • Local, regional, national, and global physical, eCommerce, and omni-channel retailers, social commerce platforms, wholesale club operators, and retail intermediaries .
    • Companies offering services in digital advertising, fulfillment and delivery services, health and wellness, and financial services .
    NameStart DateEnd DateReason for Change
    Ernst & Young LLP1969PresentCurrent auditor

    Recent developments and announcements about WMT.

    Financial Reporting

      Earnings Report

      ·
      Nov 19, 2024, 8:07 PM

      Walmart Reports Third Quarter Results for FY25

      Key Highlights:

      • Revenue Growth: Walmart reported a strong revenue growth of 5.5%, with consolidated revenue reaching $169.6 billion. Operating income grew faster at 8.2% to $6.7 billion .
      • eCommerce Performance: Global eCommerce sales increased by 27%, driven by store-fulfilled pickup and delivery, and marketplace growth .
      • Earnings Per Share (EPS): The company reported a GAAP EPS of $0.57 and an adjusted EPS of $0.58 .
      • Guidance Update: Walmart raised its guidance for FY25, expecting net sales to grow between 4.8% to 5.1% and adjusted operating income to grow between 8.5% to 9.25% in constant currency .
      • U.S. Comparable Sales: Walmart U.S. comparable sales increased by 5.3%, with positive growth in general merchandise .
      • Gross Margin: Consolidated gross margin rate increased by 21 basis points, led by Walmart U.S. .
      • Inventory Management: Global inventory decreased by 1.0%, including a 0.6% decrease for Walmart U.S., maintaining healthy in-stock levels .
      • Advertising Business: The global advertising business grew by 28%, including a 26% increase for Walmart Connect in the U.S. .
      • Cash Flow: Operating cash flow increased to $22.9 billion, a rise of $3.9 billion year-to-date, and free cash flow increased to $6.2 billion, up by $1.9 billion year-to-date .
      • Share Repurchases: Walmart repurchased 46.0 million shares year-to-date, amounting to $3.0 billion .

      Significant Trends Affecting Financial Performance:

      • eCommerce Growth: The significant increase in eCommerce sales highlights the shift towards online shopping and Walmart's ability to capitalize on this trend through efficient store-fulfilled pickup and delivery services .
      • Gross Margin Improvement: The improvement in gross margin is attributed to higher gross margins in Walmart U.S. and growth in membership income, along with reduced losses in eCommerce .
      • Inventory Management: Effective inventory management has led to a decrease in global inventory, ensuring healthy in-stock levels and reducing costs associated with excess inventory .
      • Advertising Revenue: The growth in the global advertising business, particularly through Walmart Connect, indicates a successful strategy in leveraging digital advertising to drive revenue .
      • Financial Guidance: The raised guidance for FY25 reflects Walmart's confidence in continued growth and operational efficiency, despite potential economic pressures .

      Conclusion: Walmart's third-quarter results for FY25 demonstrate strong financial performance, driven by robust revenue growth, significant eCommerce expansion, and effective inventory management. The company's raised guidance for FY25 further underscores its positive outlook and strategic initiatives aimed at sustaining growth and enhancing shareholder value.

      Source:

      Earnings Call

      ·
      Nov 19, 2024, 6:40 PM

      Walmart recently released its earnings call transcript, providing several key insights into its financial performance and strategic initiatives. Here are the highlights from the call:

      Financial Performance

      • Revenue and Profit: Walmart reported a 6.1% increase in sales in constant currency and a 9.8% rise in profit for the quarter. E-commerce sales grew by 27%, and advertising revenue increased by 28% .
      • Segment Performance: Walmart International sales grew by 12.4% in constant currency, Sam's Club U.S. comp sales increased by 7%, and Walmart U.S. comp sales rose by 5.3% .
      • Guidance: Walmart raised its full-year guidance, now expecting sales growth of 4.8% to 5.1% and operating income growth of 8.5% to 9.25% .

      Strategic Initiatives

      • Investment in Automation: Over 50% of Walmart's fulfillment center volume is now automated, which has significantly reduced delivery costs .
      • E-commerce and Membership: Walmart Plus membership income grew double digits, and Sam's Club saw a 50% increase in membership income in China .
      • Global Expansion: Walmart continues to expand its international presence, with strong performance in markets like China and Mexico .

      Market Conditions and Analyst Questions

      • Market Conditions: Walmart is experiencing some margin pressure from the growth in GLP-1 drugs but is pleased with the positive sales in general merchandise despite deflation .
      • Analyst Questions: Analysts inquired about Walmart's ability to drive steady growth while reinvesting in areas like price and wages, and the potential for profit acceleration in the future. Management emphasized their balanced approach to investment and profit growth .

      Management's Forward Guidance

      • Profit Growth: Management expects operating income to grow faster than sales over the next several years, with sales growth averaging around 4% annually .
      • Strategic Focus: Walmart is focused on maintaining a balance between profit expansion and investment in the business to ensure long-term financial health .

      Significant Comments and Initiatives

      • Generative AI: Walmart is leveraging generative AI to improve customer experience and operational efficiency. This includes a personal shopping assistant and an AI tool for associates .
      • Community Support: Walmart has been actively involved in disaster relief efforts, providing significant support during recent hurricanes and a port strike .

      Analyst Questions and Management Responses

      • Earnings and Profitability: Analysts asked about the sustainability of Walmart's profit growth and the impact of investments in new business areas. Management reiterated their confidence in the company's financial architecture and long-term growth strategy .
      • E-commerce Growth: Questions were raised about the rapid expansion of Walmart's e-commerce business and its impact on profitability. Management highlighted the importance of balancing short-term profitability with long-term growth opportunities .

      Overall, Walmart's earnings call highlighted strong financial performance, strategic investments in automation and e-commerce, and a balanced approach to growth and profitability. The company remains focused on delivering value to customers while driving long-term financial health.