- Provides details on investment approach, centered around people
and leveraging a state-of-the-art integrated supply chain network,
to deliver a leading omnichannel experience globally and drive
strong top-line growth, margin expansion and higher return on
investment
- Affirms FY24 guidance and commitment to financial framework of
4% sales growth and 4%+ operating income growth over the next 3-5
years
Walmart Inc. (NYSE: WMT) is kicking off its two-day 2023
Investment Community meeting, where leadership will highlight how
the company is investing to strengthen its business through its
people and an unparalleled, next generation supply chain network of
stores, clubs and fulfillment centers, and driving future global
growth opportunities across its omnichannel ecosystem and high
value initiatives. The company is also reiterating its first
quarter and full-year guidance for fiscal year 2024.
“We are in a unique position to serve our customers and members
however they want to shop, which will fuel continued growth,” said
Doug McMillon, Walmart president and chief executive officer. “As
we grow, we will improve our operating margin through productivity
advancements and our category and business mix, and drive returns
through operating margin expansion and capital prioritization.”
A People-Led, Tech-Powered Omnichannel
Retailer
As part of the meeting, the company is highlighting its purpose,
unique culture and the importance of its associates and unveiling
its plan for a new more connected and automated supply chain which
will improve the experience for its customers and associates and
simultaneously increase productivity.
Through its extensive work, Walmart is reengineering its supply
chain to fulfill customer needs with a more intelligent and
connected omnichannel network that is enabled by greater use of
data, more intelligent software and automation. The outcome
improves in-stock, inventory accuracy and flow whether customers
shop in stores, pickup, or have a delivery.
Walmart showcased its supply chain innovation Tuesday at its
Brooksville, Fla., regional distribution center, as one piece of
how the company is building a scaled system of supply chain
capabilities that uses a combination of data, software and
robotics. Through automation and state-of-the-art technology, the
company illustrated how the increased item storage allows the
distribution center to provide a more consistent, predictable and
higher quality delivery service to stores and customers and react
more quickly to customer demand.
Stores operate as a place to shop and as fulfillment centers and
delivery stations. Distribution and fulfillment centers hold a mix
of items, from suppliers and sellers. This allows Walmart to use
its existing assets more flexibly and efficiently for new ways of
working.
By the end of Fiscal Year 2026, Walmart believes roughly 65% of
stores will be serviced by automation, approximately 55% of the
fulfillment center volume will move through automated facilities,
and unit cost averages could improve by approximately 20%.
As the changes are implemented across the business, one of the
outcomes is roles that require less physical labor but have a
higher rate of pay. Over time, the company anticipates increased
throughput per person, due to the automation while maintaining or
even increasing its number of associates as new roles are
created.
“It all starts with our associates,” McMillon said. “We are a
people-led, tech-powered omnichannel retailer. As it relates to
being people-led, it’s about purpose, values, culture, opportunity
and belonging. We serve our associates by creating opportunities.
Opportunities that turn jobs into careers. We help bring dignity to
work by enabling them to see how they’re serving others, as part of
a team, and helping them achieve their potential. And as we serve
them, they serve our customers and members well…they make the
difference.”
Financial Framework
Walmart will outline how the company expects its growth
investments to transform its financial profile, centering on three
key building blocks: sales growth from its omni-channel business
model; diversifying earnings streams through improved category and
business mix; and scaling proven, high-return investments that
drive operating leverage and improve incremental operating
margins.
“We believe that we have the building blocks in place to help
define the next chapter of retail and do so while driving strong
growth and shareholder returns,” said John David Rainey, Walmart
executive vice president and chief financial officer. “Looking at
where we are today, we believe that approximately 4% sales growth,
and growing operating income at a faster rate, are still the
appropriate targets for our business over the next 3-5 years. The
investments we’ve made have positioned us well and stand to
generate steady and sustained growth at higher margins. Achieving
our targeted 4% sales growth over the next five years would add
more than $130 billion of sales on top of our roughly $600 billion
base today. On top of that, we think the opportunity for operating
income growth over the next 3-5 years could be better than what
we've outlined.”
Walmart’s multi-year growth outlook assumes all three business
segments contribute to its mid-single-digit sales growth target.
The company is strengthening its global omni-channel ecosystem and
scaling higher-margin value streams that serve customers and
businesses and are natural connectors to its omnichannel retail
business. This includes advertising, data, memberships and
marketplace, all initiatives that will help deliver a better
customer and member experience while driving stronger returns.
Fiscal 2024 Q1 and Full-Year
Guidance
The company reiterates its FY 2024 Q1 and full year
guidance:
Fiscal 2024 Q1 Guidance:
Metric
FY24 Q1 Guidance
Consolidated net sales
Increase 4.5% to 5.0% constant
currency
Consolidated operating income
Increase 3.5% to 4.0% constant currency,
negatively impacted by 235 bps from LIFO
Adjusted earnings per share
$1.25 to $1.30, including an expected
$0.03 impact from LIFO
Fiscal 2024 Full-Year Guidance:
Metric
FY24 Guidance
Consolidated net sales
Increase 2.5% to 3.0% constant
currency
Walmart U.S. comp sales
Increase 2.0% to 2.5%, ex. Fuel
Sam’s Club U.S. comp sales
Increase about 5.0%, ex. Fuel
Walmart international net sales
Increase about 6.0% constant currency
Consolidated operating expenses
Increase slightly as a percentage of net
sales constant currency
Consolidated operating income
Increase approximately 3.0% constant
currency, negatively impacted by 100 bps from LIFO
Interest expense, net
Increase about $750 million, or a $0.20
headwind to EPS vs. last year
Effective tax rate
Range of 25.5% to 26.5%, or an $0.10
headwind to EPS vs. last year. The rate is expected to be more
normalized vs. FY23, which benefited from discrete items
Noncontrolling interest
A $0.12 headwind to EPS vs. last year due
to acquiring the remaining shares of Massmart, the purchase of
Alert Innovation, and an expected stronger contribution from
Walmex
Adjusted earnings per share
$5.90 to $6.05, including an expected
$0.14 impact from LIFO
Capital expenditures
Flat to up slightly in total dollars
versus last year with a focus on technology, supply chain, and
customer facing initiatives
Event Webcast
Formal remarks will be video webcast at 8 a.m. EDT on the
company’s website. A replay of the webcast will be available on the
company’s website following the event.
About Walmart
Walmart Inc. (NYSE: WMT) is a people-led, tech-powered
omnichannel retailer helping people save money and live better -
anytime and anywhere - in stores, online, and through their mobile
devices. Each week, approximately 240 million customers and members
visit more than 10,500 stores and numerous eCommerce websites in 20
countries. With fiscal year 2023 revenue of $611 billion, Walmart
employs approximately 2.1 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 corporate.walmart.com, on Facebook at
facebook.com/walmart, on Twitter at twitter.com/walmart, and on
LinkedIn at linkedin.com/company/walmart.
Forward Looking Statements
This release and related management commentary contains
statements or may include or may incorporate by reference Walmart
management’s guidance regarding adjusted earnings per share,
consolidated net sales, consolidated operating income and
consolidated adjusted operating income, consolidated operating
expense, net interest expenses, noncontrolling interest, capital
expenditures, share repurchases, Walmart’s effective tax rate for
the fiscal year ending January 31, 2024, and comparable sales,
among other items. Walmart believes such statements may be deemed
to be "forward-looking statements" within the meaning of Section
21E of the Securities Exchange Act of 1934, as amended (the "Act")
and are intended to enjoy the protection of the safe harbor for
forward-looking statements provided by the Act as well as
protections afforded by other federal securities laws. These
forward-looking statements can be identified by their use of words
or phrases such as “anticipate,” “could,” “could be,” “believe,”
“expect,” “forecast,” “plan,” “projected,” “will be” “will
improve,” or similar other words or phrases. Statements of our
guidance, projections, estimates, expectations, plans, and
objectives for the first quarter and remainder of FY24 and for
subsequent fiscal years in the presentations are forward-looking
statements. Assumptions on which such forward-looking statements
are based are also forward-looking statements. Such forward-looking
statements are not statements of historical facts, but instead
express our estimates or expectations for our consolidated, or one
of our segment's or business’, economic performance or results of
operations for future periods or as of future dates or events or
developments that may occur in the future or discuss our plans,
objectives or goals. Our actual results may differ materially from
those expressed in or implied by any of these forward-looking
statements as a result of changes in circumstances, assumptions not
being realized or other risks, uncertainties and factors including:
capital markets and business conditions; trends and events around
the world and in the markets in which we operate; currency exchange
rate fluctuations, changes in market interest rates and market
levels of wages; changes in the size of various markets, including
eCommerce markets; unemployment levels; 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; the effectiveness of the implementation and operation
of our strategies, plans, programs and initiatives; unexpected
changes in our objectives and plans; the impact of acquisitions,
investments, divestitures, and other strategic decisions; our
ability to successfully integrate acquired businesses; changes in
the trading prices or fair value of certain equity investments we
hold; initiatives of competitors, competitors' entry into and
expansion in our markets, and competitive pressures; customer
traffic and average transactions in our stores and clubs and on our
eCommerce websites; the mix of merchandise we sell, the cost of
goods we sell and the shrinkage we experience; our gross profit
margins; the financial performance of Walmart and each of its
segments, including the amounts of our cash flow during various
periods; the amount of our net sales and operating expenses
denominated in the U.S. dollar and various foreign currencies;
commodity prices and the price of gasoline and diesel fuel;
challenges with our supply chain, including disruptions and issues
relating to inventory management; disruptions in seasonal buying
patterns; the availability of goods from suppliers and the cost of
goods acquired from suppliers; our ability to respond to changing
trends in consumer shopping habits; consumer acceptance of and
response to our stores, clubs, eCommerce platforms, programs,
merchandise offerings and delivery methods; cyber security events
affecting us and related costs and impact to the business;
developments in, outcomes of, and costs incurred in legal or
regulatory proceedings to which we are a party or are subject, and
the liabilities, obligations and expenses, if any, that we may
incur in connection therewith; casualty and accident related costs
and insurance costs; the turnover in our workforce and labor costs,
including healthcare and other benefit costs; our effective tax
rate and the factors affecting our 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 including the
enactment of laws and the adoption and interpretation of
administrative rules and regulations; the imposition of new taxes
on imports, new tariffs and changes in existing tariff rates; the
imposition of new trade restrictions and changes in existing trade
restrictions; adoption or creation of new, and modification of
existing, governmental policies, programs, initiatives and actions
in the markets in which Walmart operates and elsewhere and actions
with respect to such policies, programs and initiatives; changes in
accounting estimates or judgments; the level of public assistance
payments; natural disasters, changes in climate, geopolitical
events, global health epidemics or pandemics (such as the COVID-19
pandemic) and catastrophic events; and changes in generally
accepted accounting principles in the United States. Our most
recent annual report on Form 10-K filed with the SEC discusses
other risks and factors that could cause actual results to differ
materially from those expressed or implied by any forward-looking
statement in the release and related management commentary. We urge
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 in 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 our operations or
financial performance. The forward-looking statements made today
are as of the date of this release. Walmart undertakes no
obligation to update these forward-looking statements to reflect
subsequent events or circumstances.
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Media Relations Contact Jacquelyn Cook Senior Manager,
Global Communications 800-331-0085 Investor Relations
Contact Steph Wissink Senior Vice President, Investor Relations
IR@walmart.com
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