Summary
Walmart Inc. reported a decrease in net sales for the three and nine months ended October 31, 2015, compared to the prior year, largely impacted by unfavorable currency exchange rates and lower fuel prices. Despite the sales dip, the company saw an improvement in gross profit margin due to better margins in food and general merchandise in the U.S., partially offset by pharmacy reimbursement pressures. However, operating expenses increased, primarily driven by investments in associate wages and digital retail, leading to a decline in operating income and net income from continuing operations. Diluted earnings per share also saw a decrease. The company continued to invest in its strategic priorities, including capital expenditures for store expansion and technology, alongside significant investments in e-commerce and associate compensation and training.
Financial Highlights
49 data points| Revenue | $117.41B |
| Cost of Revenue | $87.45B |
| Gross Profit | $29.96B |
| SG&A Expenses | $24.25B |
| Operating Income | $5.71B |
| Interest Expense | $509.00M |
| Net Income | $3.30B |
| EPS (Basic) | $0.34 |
| EPS (Diluted) | $0.34 |
| Shares Outstanding (Basic) | 9.63B |
| Shares Outstanding (Diluted) | 9.66B |
Key Highlights
- 1Consolidated net sales decreased by 1.3% for the three months and 0.5% for the nine months ended October 31, 2015, compared to the prior year, impacted by currency fluctuations and lower fuel prices.
- 2Gross profit margin improved to 25.0% for the three months and 24.6% for the nine months, driven by better margins in Walmart U.S. and changes in merchandise mix internationally.
- 3Operating income decreased by $551 million for the three months and $1.7 billion for the nine months, primarily due to increased operating expenses related to associate wages, hours, and digital retail investments.
- 4Income from continuing operations attributable to Walmart decreased to $3.3 billion for the three months and $10.1 billion for the nine months.
- 5Diluted EPS from continuing operations attributable to Walmart was $1.03 for the three months and $3.13 for the nine months, down from $1.15 and $3.46 respectively in the prior year.
- 6Walmart U.S. segment showed net sales growth of 3.8% for the quarter and 4.0% for the nine months, driven by comparable store sales and square footage growth, but operating income declined.
- 7Walmart International segment experienced an 11.4% decrease in net sales for the quarter and 9.2% for the nine months, largely due to adverse currency exchange rates.