10-KPeriod: FY2017

Walmart Inc. Annual Report, Year Ended Jan 31, 2017

Filed March 31, 2017For Securities:WMT

Summary

Walmart Inc.'s 2017 10-K filing reveals a company operating at a massive scale, with $485.9 billion in total revenue for the fiscal year ending January 31, 2017. The company serves over 260 million customers weekly across 11,695 stores in 28 countries and e-commerce operations in 11 countries, demonstrating significant global reach. The core strategy revolves around "Everyday Low Price" (EDLP) and "Everyday Low Cost" (EDLC), aiming to build customer trust through consistent low pricing and operational efficiency. Key to Walmart's operations are its three reportable segments: Walmart U.S., Walmart International, and Sam's Club. Walmart U.S. is the largest segment, contributing approximately 64% of net sales and historically the highest gross profit rate. The Walmart International segment, representing about 24% of net sales, faces currency headwinds but maintains a broad international presence. Sam's Club, accounting for 12% of net sales, operates on a membership model and targets a different customer base. The company is actively investing in its digital capabilities to create a seamless integration between physical and online shopping experiences, recognizing the evolving retail landscape and increasing importance of e-commerce.

Financial Highlights

52 data points
Beta

Revenue

$485.87B

25.6% Gross Margin

Net Income

$13.64B

2.8% Net Margin

EPS (Diluted)

$1.46

Total Assets

$198.82B

Cash & Equivalents

$6.87B

Free Cash Flow

$21.05B

Financial Statements
Beta
Revenue$485.87B
Cost of Revenue$361.26B
Gross Profit$124.62B
SG&A Expenses$101.85B
Operating Income$22.76B
Interest Expense$2.04B
Net Income$13.64B
EPS (Basic)$1.47
EPS (Diluted)$1.46
Shares Outstanding (Basic)9.30B
Shares Outstanding (Diluted)9.34B

Key Highlights

  • 1Total revenues reached $485.9 billion for the fiscal year ending January 31, 2017, underscoring the company's immense scale.
  • 2Walmart operates 11,695 stores under 59 banners across 28 countries and e-commerce websites in 11 countries, highlighting significant global diversification.
  • 3The company's core strategy remains focused on "Everyday Low Price" (EDLP) and "Everyday Low Cost" (EDLC) to maintain customer trust and operational efficiency.
  • 4The Walmart U.S. segment is the largest contributor to revenue (64% of net sales) and historically exhibits the highest gross profit margin.
  • 5Walmart International, despite currency challenges, is a substantial segment (24% of net sales) with operations in 27 countries, demonstrating global retail presence.
  • 6Sam's Club, a membership-based warehouse club, contributes 12% of net sales and offers a distinct value proposition.
  • 7Significant investments are being made in e-commerce and digital integration to create a seamless omnichannel customer experience.

Frequently Asked Questions

Walmart's primary business strategy is centered on "Everyday Low Price" (EDLP), which means consistently offering low prices to customers to build trust, and "Everyday Low Cost" (EDLC), a commitment to controlling operational expenses to pass savings onto customers. This strategy is supported by a focus on providing broad access to merchandise and a positive shopping experience across both physical and digital channels.

Walmart structures its operations into three reportable segments: Walmart U.S., Walmart International, and Sam's Club. Walmart U.S. comprises its domestic retail operations, Walmart International includes all operations outside the U.S. across various countries and formats, and Sam's Club consists of its membership-only warehouse clubs in the U.S.

Walmart is actively striving to create a customer-centric experience that seamlessly integrates digital and physical shopping. This involves investing in e-commerce capabilities, mobile applications, and services like 'Walmart Pickup,' 'Pickup Today,' and 'Online Grocery' to offer customers convenience and access to a broader assortment of products, bridging the gap between online browsing and in-store purchasing.

Key risks identified in the filing include macroeconomic factors impacting consumer spending, intense competition from both traditional retailers and e-commerce players, challenges in growing and managing its e-commerce business effectively, operational risks such as natural disasters and supply chain disruptions, risks associated with global suppliers, potential cybersecurity threats, risks related to its pharmacy business, labor and wage pressures, challenges in international expansion, and fluctuations in foreign exchange rates. Legal proceedings and regulatory compliance, including FCPA investigations, are also significant concerns.