- The company reiterates fiscal year 2018
GAAP EPS1 guidance of $4.18 to $4.28, or adjusted EPS1,2 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 EPS2.
- 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.
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-TaxImpact
TaxImpact1
NCIImpact2
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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171010005735/en/
WalmartInvestor Relations Contact:Steve Schmitt,
479-258-7172orMedia Relations Contact:Randy Hargrove,
800-331-0085
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