10-QPeriod: Q1 FY2002

Walmart Inc. Quarterly Report for Q1 Ended Apr 30, 2001

Filed June 5, 2001For Securities:WMT

Summary

Walmart Inc. reported a solid performance for the first quarter of fiscal year 2002, ending April 29, 2001. The company demonstrated robust revenue growth of 11.8%, reaching $48.052 billion, driven by both domestic and international expansion and a 3.7% increase in comparable store sales. Net income rose to $1.380 billion, or $0.31 per diluted share, a slight increase from the prior year's comparable period. While overall sales are strong, the gross profit margin saw a slight decrease to 21.2% primarily due to a higher proportion of sales from lower-margin food items and increased promotional activities. However, operating expenses as a percentage of sales improved slightly due to strong expense control in the international segment. The company continues to invest heavily in capital expenditures, totaling $1.9 billion for the quarter, and is actively managing its debt structure, with plans to refinance and potentially issue new long-term debt. The increased dividend and expanded share repurchase program signal management's confidence and commitment to returning value to shareholders.

Key Highlights

  • 1Total net sales increased by 11.8% to $48.052 billion for the first quarter of fiscal 2002 compared to the prior year.
  • 2Net income grew to $1.380 billion, or $0.31 per diluted share, representing a modest increase from the prior year.
  • 3Gross profit margin decreased slightly to 21.2% due to a higher mix of lower-margin food sales and price rollbacks.
  • 4Operating, selling, general, and administrative expenses as a percentage of sales improved slightly to 16.9%.
  • 5Significant capital expenditures of $1.9 billion were made for property, plant, and equipment.
  • 6The company's debt-to-total capitalization ratio was 42.6% at quarter-end, slightly above management's target of 40%.
  • 7Walmart announced plans to increase its common stock repurchase program by $1 billion, bringing the total authorization to $3 billion.

Frequently Asked Questions

Walmart Inc. reported a strong 11.8% increase in total net sales, reaching $48.052 billion for the quarter ended April 29, 2001. This growth was driven by both domestic and international expansion efforts, along with a 3.7% increase in comparable store sales.

Net income increased to $1.380 billion, or $0.31 per diluted share. However, the gross profit margin saw a slight decrease to 21.2% primarily due to an increased contribution from lower-margin food sales and ongoing price rollback programs. Operating expenses as a percentage of sales saw a minor improvement due to effective cost management, particularly in the international segment.

The company invested $1.9 billion in capital expenditures during the quarter to support expansion. Walmart is actively managing its debt and capital structure. The debt-to-total capitalization ratio stood at 42.6% at the end of the quarter, which is slightly above the management's target of 40%. The company also continues to return capital to shareholders through dividends and an expanded share repurchase program.

While the company is not party to any material pending legal proceedings, there are ongoing matters related to environmental compliance. Specifically, the EPA is considering legal action regarding storm water permit violations in Texas, New Mexico, and Oklahoma, with potential penalties calculated at $5.6 million. Additionally, a lawsuit was filed in Connecticut regarding storm water management practices at 12 stores. Walmart states it will vigorously defend against these allegations. Notably, the company has been reimbursed by contractors for prior environmental settlements.