10-QPeriod: Q3 FY2013

Walmart Inc. Quarterly Report for Q3 Ended Oct 31, 2012

Filed December 4, 2012For Securities:WMT

Summary

Walmart Inc. reported strong financial performance for the nine months ended October 31, 2012, with total revenues reaching $341.2 billion, a 5.4% increase compared to the same period last year. This growth was driven by a 5.4% increase in net sales to $339.0 billion, supported by comparable store and club sales increases and contributions from recent acquisitions. The company demonstrated effective cost management, with operating expenses growing at a slower rate than net sales, leading to a 5.7% increase in operating income to $19.2 billion. Diluted earnings per share from continuing operations attributable to Walmart were $3.35 for the nine-month period, up from $3.03 in the prior year. Key financial highlights include a robust increase in net cash provided by operating activities to $15.9 billion and a significant surge in free cash flow to $7.0 billion, more than double the previous year's $3.4 billion. This improved cash generation reflects enhanced operating results and disciplined capital investment. The company also maintained a strong commitment to returning capital to shareholders, with dividends paid totaling $4.0 billion and share repurchases amounting to $4.7 billion for the nine-month period. Despite ongoing legal and regulatory investigations, including FCPA matters, management continues to express confidence in the company's financial condition and operational resilience.

Financial Highlights

49 data points
Beta

Revenue

$113.80B

24.9% Gross Margin

Net Income

$3.63B

3.2% Net Margin

EPS (Diluted)

$0.36

Total Assets

$205.82B

Cash & Equivalents

$8.64B

Free Cash Flow

$913.00M

Financial Statements
Beta
Revenue$113.80B
Cost of Revenue$85.47B
Gross Profit$28.33B
SG&A Expenses$22.24B
Operating Income$6.09B
Interest Expense$522.00M
Net Income$3.63B
EPS (Basic)$0.36
EPS (Diluted)$0.36
Shares Outstanding (Basic)10.09B
Shares Outstanding (Diluted)10.14B

Key Highlights

  • 1Total revenues increased by 5.4% to $341.2 billion for the nine months ended October 31, 2012.
  • 2Net sales grew by 5.4% to $339.0 billion for the nine months ended October 31, 2012.
  • 3Operating income increased by 5.7% to $19.2 billion for the nine months ended October 31, 2012.
  • 4Diluted EPS from continuing operations attributable to Walmart increased to $3.35 for the nine months ended October 31, 2012, from $3.03 in the prior year.
  • 5Net cash provided by operating activities rose significantly to $15.9 billion for the nine months ended October 31, 2012.
  • 6Free cash flow more than doubled to $7.0 billion for the nine months ended October 31, 2012.
  • 7Dividends paid amounted to $4.0 billion and share repurchases were $4.7 billion for the nine months ended October 31, 2012.

Frequently Asked Questions

Walmart's revenue growth was primarily driven by a combination of a 3.6% year-over-year increase in retail square feet and positive comparable store and club sales across the company. Additionally, net sales from fiscal year 2012 acquisitions contributed significantly to the nine-month period's increase, partially offset by negative impacts from currency exchange rate fluctuations.

Walmart focused on leveraging its operating expenses, which grew at a slower rate than net sales for both the three and nine-month periods. This effective cost management, along with strong sales performance, contributed to a 5.7% increase in operating income for the nine months ended October 31, 2012, reaching $19.2 billion. However, operating expenses did include $99 million related to third-party advisors for FCPA matters during the nine-month period.

Walmart demonstrated a continued commitment to returning capital to shareholders. For the nine months ended October 31, 2012, the company paid $4.0 billion in dividends and repurchased $4.7 billion of its stock. The Board of Directors also approved an increase in the annual dividend for fiscal 2013 to $1.59 per share.

Walmart is involved in several significant legal and regulatory matters, including ongoing investigations related to the Foreign Corrupt Practices Act (FCPA) in various international markets, as well as a wage-and-hour class action lawsuit and gender discrimination class actions in the U.S. While management does not currently believe these matters will have a material adverse effect, the company incurred approximately $99 million in expenses related to FCPA investigations for the nine-month period and notes the inherent uncertainties associated with these situations.