Walmart(US:WMT)2023-11-29 16:00Sales Performance - Comparable sales in the U.S. increased by 4.6% and 5.5% for the three and nine months ended October 31, 2023, respectively, compared to the same periods in the previous fiscal year[64] - Walmart U.S. segment had comparable sales growth of 4.9% and 6.1% for the three and nine months ended October 31, 2023, driven by growth in transactions and average ticket[64] - Net sales for the three months ended October 31, 2023, were $159.439 billion, a 5.3% increase from $151.469 billion in the same period of 2022[67] - Total revenues increased by $8.0 billion or 5.2% for the three months ended October 31, 2023, and $27.5 billion or 6.1% for the nine months ended October 31, 2023, compared to the same periods in the previous fiscal year[78] - Net sales for the Walmart U.S. segment increased by $4.6 billion or 4.4% for the three months and $17.4 billion or 5.7% for the nine months ended October 31, 2023, driven by comparable sales increases of 4.9% and 6.1% respectively[80] - Net sales for the Walmart International segment increased by $2.7 billion or 10.8% for the three months and $8.8 billion or 12.0% for the nine months ended October 31, 2023, primarily due to positive comparable sales and favorable currency fluctuations[81] - Net sales for the Sam's Club segment increased by $0.6 billion or 2.8% for the three months ended October 31, 2023, and by $1.4 billion or 2.2% for the nine months ended October 31, 2023, compared to the same periods in the previous fiscal year[82] - Comparable sales growth for the Sam's Club segment was 2.9% and 2.4% for the three and nine months ended October 31, 2023, respectively, driven by strong sales in grocery and health and wellness[82] Financial Performance - Operating income for the three months ended October 31, 2023, was $6.202 billion, compared to $2.695 billion in the same period of 2022, reflecting a significant increase[67] - Gross profit as a percentage of net sales increased to 24.0% for the three months ended October 31, 2023, from 23.7% in the same period of 2022[67] - Operating expenses as a percentage of net sales decreased to 21.0% for the three months ended October 31, 2023, from 22.8% in the same period of 2022[67] - Consolidated net income for the trailing twelve months ending October 31, 2023, was $16,401 million, up from $9,116 million in 2022, resulting in a return on assets (ROA) of 6.5%, compared to 3.7% in the previous year[71] - The return on investment (ROI) for the same period was 14.1%, an increase from 12.8% in 2022, with operating income rising to $25,319 million from $20,754 million[72] - Diluted net income per common share attributable to Walmart was $0.17 and $3.71 for the three and nine months ended October 31, 2023, representing increases of $0.83 and $1.74 respectively[78] - Consolidated net income increased by $2.4 billion for the three months and $5.1 billion for the nine months ended October 31, 2023, compared to the same periods in the previous fiscal year[78] Cash Flow and Investments - Free cash flow for the nine months ended October 31, 2023, was $4,340 million, an increase of $703 million compared to $3,637 million in the same period last year[75] - Net cash provided by operating activities increased to $19,014 million for the nine months ended October 31, 2023, up from $15,698 million in 2022[75] - Total capital expenditures for the nine months ended October 31, 2023, were $14,674 million, compared to $12,061 million in the prior year, reflecting a strategic investment in supply chain and technology[74] - Net cash used in investing activities was $(15,374) million for the nine months ended October 31, 2023, compared to $(12,965) million in 2022, reflecting increased capital investments[76] - Net cash used in financing activities was $0.2 billion for the nine months ended October 31, 2023, a decrease from $5.6 billion for the same period in 2022[88] - Cash and cash equivalents were $12.2 billion as of October 31, 2023, compared to $11.6 billion as of October 31, 2022[86] Asset Management - Average total assets increased to $253,415 million in 2023 from $246,254 million in 2022, contributing to the improved ROI[72] - The company reported total assets of $259,174 million as of October 31, 2023, up from $247,656 million in the previous year[72] - Average invested capital rose to $280,346 million in 2023, compared to $266,983 million in 2022, indicating a stronger capital base for operations[72] - The company allocated $8,014 million towards supply chain and customer-facing initiatives in the first nine months of 2023, up from $6,304 million in the same period last year[74] Tax and Regulatory Matters - The effective income tax rate was 29.7% for the three months and 26.1% for the nine months ended October 31, 2023, compared to (23.5)% and 32.4% for the same periods in the previous fiscal year[78] - The company is involved in over 400 opioid-related lawsuits, with a significant judgment of approximately $0.7 billion ordered to be paid over fifteen years[106] - The company has reached settlement agreements with all 50 states and other territories to resolve substantially all opioids-related lawsuits, effective September 6, 2023[107] - The company is responding to a show cause notice from India's Directorate of Enforcement regarding alleged violations of Foreign Direct Investment rules prior to its acquisition of Flipkart[110] - The company is vigorously defending against a lawsuit filed by the California Attorney General regarding hazardous waste management, with potential penalties exceeding $1 million[112] - In October 2023, the Company received a Finding of Violation from the U.S. Environmental Protection Agency (EPA) regarding alleged violations of the Clean Air Act[113] - The Company is currently evaluating the findings and cooperating with the EPA in its investigation[113] - The EPA may impose monetary and non-monetary penalties for the alleged violations, but the Company believes it will not have a material adverse effect on its business[113] - The Company cannot predict the final outcome of the EPA investigation at this early stage[113] Risk Factors - No material change in the risk factors has occurred since the Annual Report on Form 10-K for the fiscal year ended January 31, 2023[115] - The risk factors disclosed could materially and adversely affect the Company's business, results of operations, financial condition, and liquidity[115] - The Company acknowledges that additional unknown risks could also impact its operations[115] - The business operations may be affected by factors that apply to all companies operating in the U.S. and globally[115] Credit Ratings and Dividends - The company maintains strong credit ratings with Standard & Poor's at AA, Moody's at Aa2, and Fitch at AA for long-term debt[98] - The Board of Directors approved an annual dividend of $2.28 per share for fiscal 2024, an increase from $2.24 per share in fiscal 2023[91] Inflation Impact - Inflation continues to impact merchandise costs, influencing net sales and gross profit margin strategies[62]