Walmart Highlights Progress on Strategic Initiatives and Outlines Plan to Win with Customers and Shareholders at its Meeting for the Investment Community

  • The company reiterates fiscal year 2018 GAAP EPS1
    guidance of $4.18 to $4.28, or adjusted EPS
    1,2
    guidance of $4.30 to $4.40.
  • For fiscal year 2019, the company expects EPS3
    to increase approximately 5 percent compared with fiscal year 2018
    adjusted EPS
    2.
  • The company announces a new $20 billion share repurchase program to
    replace its existing authorization and expects to utilize the new
    authorization over an approximate two-year period.

BENTONVILLE, Ark.–(BUSINESS WIRE)–Walmart will host its annual meeting for the investment community today
where the company will discuss progress against its strategic
initiatives to leverage its unique assets and win with customers and
shareholders through innovation, greater convenience and speed. The
company is also sharing select guidance information for the next fiscal
year.

Walmart President and CEO Doug McMillon will provide an update on how
the company is uniquely positioned to win.

“We have good momentum in the business, we’re executing our strategy and
moving with speed to win with the customer, who is more connected than
ever and embracing tools that will save them both time and money,” said
McMillon. “We’re combining the accessibility of our stores with
eCommerce to provide new and exciting ways for customers to shop. I’m
proud of the team we have in place, the work we have underway and how we
are positioned for success in the future.”

McMillon will discuss accomplishments over the past year at Walmart
U.S., including traffic and comp sales improvements, strong eCommerce
growth and expanded online assortment, two-day free shipping with no
membership fee and over 1,000 online grocery pickup locations. He will
also highlight innovations around the world such as one-hour delivery
from stores in China, commitments to sustainability, service to
communities, especially in times of disaster, and investments in
associates that are empowering them to drive results and better serve
customers.

“We’re proud of the progress we’re making,” McMillon said. “We’re
equipping our associates with training and technology so they will
continue to innovate in our stores, clubs and through eCommerce to find
ways to deliver an enjoyable shopping experience for our customers that
is easy, fast, friendly and fun.”

1 Fiscal year 2018 GAAP EPS guidance excludes the impact of
any additional charge on extinguishment of debt in fiscal 2018 expected
to be associated with the debt tender offer announced on October 6,
2017, as well as the impact of other strategic decisions that could
occur during fiscal year 2018.
2 See additional
information at the end of this release regarding non-GAAP financial
measure.
3 Assumes currency exchange rates remain at
current levels.

Financial Framework

Walmart CFO Brett Biggs will discuss financial projections through the
lens of the company’s financial framework of strong, efficient growth,
operating discipline and strategic capital allocation.

Biggs commented, “We feel good about where we are as a company. Our
plans are designed to win with both customers and shareholders as we
operate within our financial framework. Our financial position is
strong, which allows us to invest in the business while returning
significant cash to shareholders.”

Additional Fiscal Year 2019 Guidance

  • Consolidated net sales are expected to grow at or above 3 percent,
    driven by comp-sales and eCommerce growth, assuming currency exchange
    rates remain at current levels
  • Anticipates sales growth at Walmart U.S. eCommerce to be about 40
    percent
  • Expects to add 1,000 online grocery locations in Walmart U.S.
  • Expects to leverage expenses
  • Expects its effective tax rate to be approximately 32.5 percent

Capital Expenditure Details1

The company expects capital expenditures to be approximately $11 billion
for fiscal years 2018 and 2019.

  • Walmart U.S. will continue to prioritize store remodels and digital
    experiences over new stores.
  • eCommerce investments include enhanced supply chain capabilities.
  • In addition to new stores, Walmart International will invest more in
    fulfillment capabilities.

New Unit Details

The company expects global unit growth of approximately 280, including
new, expanded and relocated units, for each of the fiscal years 2018 and
2019.

  • Walmart U.S. expects to open fewer than 15 Supercenters and fewer than
    10 Neighborhood Markets in fiscal year 2019.
  • Walmart International expects to open approximately 255 new stores
    with a focus in key markets such as Mexico and China.

About Walmart

Wal-Mart Stores, 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, over 260 million customers
and members visit our more than 11,600 stores under 59 banners in 28
countries and eCommerce websites in 11 countries. With fiscal year 2017
revenue of $485.9 billion, Walmart employs more than 2.3 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 Excludes the impact of acquisitions, if any.

Forward-Looking Statements

This release contains certain forward-looking statements that are
intended to enjoy the safe harbor protections of the Private Securities
Litigation Reform Act of 1995, as amended, including statements
regarding guidance, forecasts and expectations of Walmart’s management
of or for:

  • Adjusted earnings per share and earnings per share for fiscal 2018;
  • Earnings per share for fiscal 2019;
  • Continued momentum in our business and continued innovation in our
    stores, clubs and through eCommerce;
  • Completion of our new $20 billion share buyback authorization and the
    timing of such completion;
  • Our flexibility to invest in and grow our business while providing
    meaningful returns to shareholders;
  • Consolidated net sales and comp sales growth for fiscal 2019;
  • Sales growth at Walmart US eCommerce for fiscal 2019;
  • The number of online grocery locations to be added in fiscal 2019;
  • The levering of expenses in fiscal 2019;
  • Our effective tax rate for fiscal 2019;
  • Capital expenditures, and segment level capital allocations, for
    fiscal 2018 and fiscal 2019;
  • The prioritization by Walmart U.S. of store remodels and digital
    experiences over new builds;
  • Our eCommerce investments in supply chain capabilities and merchant
    tools;
  • Walmart International’s opening more new stores in markets such as
    China and Mexico; and
  • Total new units for Walmart U.S. by format, and for Walmart
    International and Sams Club U.S., for fiscal 2018 and fiscal 2019.

Walmart’s actual results may differ materially from the guidance,
projections, estimates and expectations discussed in or implied by such
forward-looking statements as a result of changes in circumstances,
assumptions not being realized or other risks, uncertainties and
factors, whether globally or in one or more of the markets in which we
operate, including:

Economic Factors

  • 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 rates of interest;
  • changes in market levels of wages;
  • changes in the size of various markets, including eCommerce markets;
  • unemployment levels;
  • inflation or deflation, generally and in certain product categories;
  • transportation, energy and utility costs;
  • commodity prices, including the prices of oil and natural gas;
  • consumer confidence, disposable income, credit availability, spending
    levels, shopping patterns, debt levels, and demand for certain
    merchandise;
  • trends in consumer shopping habits around the world and in the markets
    in which Walmart operates;
  • consumer enrollment in health and drug insurance programs and such
    programs’ reimbursement rates and drug formularies;
  • initiatives of competitors, competitors’ entry into and expansion in
    Walmart’s markets, and competitive pressures;
  • changes in the trading prices of certain equity investments held by
    Walmart.

Operating Factors

  • the amount of Walmart’s net sales and operating expenses denominated
    in U.S. dollar and various foreign currencies;
  • the financial performance of Walmart and each of its segments,
    including the amounts of Walmart’s cash flow during various periods;
  • Walmart’s need to repatriate earnings held outside of the U.S. and
    changes in U.S. tax regulations;
  • customer traffic and average ticket in Walmart’s stores and clubs and
    on its eCommerce websites;
  • the mix of merchandise Walmart sells;
  • the availability of goods from suppliers and the cost of goods
    acquired from suppliers;
  • the effectiveness of the implementation and operation of Walmart’s
    strategies, plans, programs and initiatives;
  • the impact of acquisitions and divestitures, store and club closures
    and other changes in our business portfolio;
  • Walmart’s ability to successfully integrate acquired businesses,
    including within the eCommerce space;
  • the amount of shrinkage Walmart experiences;
  • consumer acceptance of and response to Walmart’s stores and clubs,
    eCommerce websites, mobile apps, programs and merchandise offerings,
    including the Walmart U.S. segment’s Grocery Pickup program;
  • new methods for delivery of purchased merchandise to customers;
  • Walmart’s gross profit margins, including pharmacy margins and margins
    of other product categories;
  • the selling prices of gasoline and diesel fuel;
  • disruption of seasonal buying patterns in Walmart’s markets;
  • Walmart’s expenditures for FCPA and other compliance-related matters;
  • disruptions in Walmart’s supply chain;
  • cybersecurity events affecting Walmart and related costs and impact of
    any disruption in business;
  • Walmart’s labor costs, including healthcare and other benefit costs;
  • Walmart’s casualty and accident-related costs and insurance costs;
  • the size of and turnover in Walmart’s workforce and the number of
    associates at various pay levels within that workforce;
  • unexpected changes in Walmart’s objectives and plans;
  • the availability of necessary personnel to staff Walmart’s stores,
    clubs and other facilities;
  • the availability of skilled labor in areas in which new units are to
    be constructed or existing units are to be relocated, expanded or
    remodeled;
  • delays in the opening of new, expanded or relocated units;
  • developments in, and the outcome of, legal and regulatory proceedings
    and investigations to which Walmart is a party or is subject, and the
    liabilities, obligations and expenses, if any, that Walmart may incur
    in connection therewith;
  • changes in the credit ratings assigned to Walmart’s commercial paper
    and debt securities by credit rating agencies;
  • Walmart’s effective tax rate; and
  • unanticipated changes in accounting judgments and estimates;

Regulatory and Other Factors

  • changes in existing tax, labor and other laws and changes in tax
    rates, including the enactment of laws and the adoption and
    interpretation of administrative rules and regulations;
  • governmental policies, programs, initiatives and actions in the
    markets in which Walmart operates and elsewhere;
  • the possibility of imposition of new taxes on imports and new tariffs
    and trade restrictions and changes in existing tariff rates and trade
    restrictions;
  • changes in currency control laws;
  • changes in the level of public assistance payments;
  • the timing of federal income tax refunds;
  • natural disasters, public health emergencies, civil disturbances, and
    terrorist attacks; and
  • changes in generally accepted accounting principles in the United
    States.

Such risks, uncertainties and factors also include the risks relating to
our operations and financial performance discussed in Walmart’s filings
with the SEC, including in our Annual Report on Form 10-K for the fiscal
year ended January 31, 2017, and Quarterly Report on Form 10-Q for our
fiscal quarter ended July 31, 2017. You should read this release in
conjunction with that annual report on Form 10-K and Walmart’s
subsequently filed quarterly reports on Form 10-Q and current reports on
Form 8-K. You should consider all of the risks, uncertainties and other
factors identified above and in those SEC reports carefully when
evaluating the forward-looking statements in this release. Walmart
cannot assure you that the future results reflected in or implied by any
such forward-looking statement will be realized or, even if
substantially realized, will have the forecasted or expected
consequences and effects for or on Walmart’s operations or financial
performance. Such forward-looking statements are made as of the date of
this release, and Walmart undertakes no obligation to update such
statements to reflect subsequent events or circumstances.

Wal-Mart Stores, Inc.
Reconciliation of and Other
Information Regarding a Non-GAAP Financial Measure
(Unaudited)

The following information provides a reconciliation of a non-GAAP
financial measure presented in the press release to which this
reconciliation is attached to the most directly comparable financial
measure 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 measure presented in the
press release that is calculated and presented in accordance with GAAP.
Such non-GAAP financial measure should not be considered superior to, as
a substitute for or alternative to, and should be considered in
conjunction with, the GAAP financial measure presented in the press
release. The non-GAAP financial measure in the press release may differ
from similar measures used by other companies.

Adjusted EPS Guidance

Adjusted EPS Guidance is considered a non-GAAP financial measure.
Management believes that Adjusted EPS Guidance for Fiscal 2018 is a
meaningful metric to share with investors because that metric, which
adjusts EPS for certain items recorded in the period, is the metric that
best allows comparison of the expected performance for Fiscal 2018 to
the comparable prior period. In addition, the metric affords investors a
view of what management is forecasting for Walmart’s core earnings
performance for Fiscal 2018 and also affords investors the ability to
make a more informed assessment of the core earnings performance for the
comparable period.

We have calculated Adjusted EPS Guidance for Fiscal 2018 by adjusting
for the amount of the impact of: (1) the Q2 loss on the early
extinguishment of certain debt and (2) the gain on the sale of Suburbia
in Mexico.

 
      Fiscal 2018
Diluted net income per share:            
Forecasted EPS $4.18 – $4.28
 
Adjustments:

Pre-Tax
Impact

Tax
Impact1

NCI
Impact2

Net Impact
Loss on Early Extinguishment of Debt3 $0.26 -$0.09 $— $0.17
Gain on Sale of Suburbia -0.13 0.04 0.04 -0.05
Net adjustments $0.12
 
Adjusted EPS Guidance $4.30 – $4.40
 

1 Calculated based on nature of item and statutory rate in
effect for relevant jurisdiction.
2 Calculated based on
the ownership percentages of the noncontrolling interest at Walmex.
3
Related to Debt Tender Offer announced on June 15, 2017.

Contacts

Walmart
Investor Relations Contact:
Steve Schmitt,
479-258-7172
or
Media Relations Contact:
Randy
Hargrove, 800-331-0085