Summary
Walmart Inc. reported its financial results for the quarter and nine months ended October 31, 2014. For the three months ended October 31, 2014, net sales increased by 2.8% year-over-year to $118.1 billion, driven by growth in retail square footage, e-commerce sales, and positive comparable sales in the U.S. However, operating income saw a slight decrease of 0.7% to $6.3 billion, impacted by a lower gross profit margin and increased operating expenses as a percentage of net sales, largely due to price investments and higher healthcare costs. For the nine months ended October 31, 2014, net sales grew by 2.1% to $351.6 billion. Operating income decreased by 1.7% to $19.2 billion. Despite the revenue growth, the company faced challenges in managing operating expenses, which rose faster than net sales due to investments in e-commerce and higher healthcare expenses. The company also noted a negative impact on results from currency exchange rate fluctuations, particularly in the Walmart International segment. Key financial metrics such as diluted EPS showed a slight increase for the quarter but a decrease for the nine-month period compared to the prior year.
Financial Highlights
48 data points| Revenue | $119.00B |
| Cost of Revenue | $89.25B |
| Gross Profit | $29.75B |
| SG&A Expenses | $23.49B |
| Operating Income | $6.26B |
| Interest Expense | $561.00M |
| Net Income | $3.71B |
| EPS (Basic) | $0.38 |
| EPS (Diluted) | $0.38 |
| Shares Outstanding (Basic) | 9.69B |
| Shares Outstanding (Diluted) | 9.72B |
Key Highlights
- 1Net sales for the three months ended October 31, 2014, increased 2.8% to $118.1 billion, while for the nine months ended October 31, 2014, net sales increased 2.1% to $351.6 billion.
- 2Operating income for the three months ended October 31, 2014, decreased by 0.7% to $6.3 billion. For the nine months ended October 31, 2014, operating income decreased by 1.7% to $19.2 billion.
- 3Gross profit margin decreased slightly for both periods, attributed to price investments at Walmart U.S. and the Cash Rewards Program at Sam's Club.
- 4Operating expenses increased as a percentage of net sales for both periods, impacting leverage, mainly due to higher healthcare costs and investments in e-commerce.
- 5Free cash flow generation was strong, with $7.2 billion for the nine months ended October 31, 2014, an increase from $3.8 billion in the prior year's comparable period.
- 6The company continued its share repurchase program, though at a significantly lower pace than the prior year, with $1.0 billion repurchased in the nine months ended October 31, 2014, compared to $5.8 billion in the prior year.
- 7Walmart International segment faced headwinds from currency exchange rate fluctuations, which negatively impacted net sales by $0.4 billion for the quarter and $2.7 billion for the nine months.