Summary
Walmart Inc. reported its financial results for the third quarter and first nine months of fiscal year 2017, ending October 30, 2016. While consolidated net sales saw a modest increase of 0.5% for both periods, driven by comparable sales and store square footage growth, profitability faced headwinds. Operating income declined compared to the prior year, attributed to increased investments in associate wages, digital retail, and IT. Diluted Earnings Per Share (EPS) also saw a decrease for the quarter, though it slightly increased for the nine-month period. Key strategic initiatives are underway, including significant investments in e-commerce through the acquisition of Jet.com, which contributed to increased operating expenses but is expected to drive future growth. The company also recognized gains from the sale of e-commerce assets in China (Yihaodian) and non-core retail assets, bolstering membership and other income. Despite the near-term margin pressures and ongoing legal and FCPA investigations, Walmart's strong operating cash flow and liquidity position remain robust, supporting continued investments and shareholder returns.
Financial Highlights
49 data points| Revenue | $118.18B |
| Cost of Revenue | $87.48B |
| Gross Profit | $30.70B |
| SG&A Expenses | $25.58B |
| Operating Income | $5.12B |
| Interest Expense | $528.00M |
| Net Income | $3.03B |
| EPS (Basic) | $0.33 |
| EPS (Diluted) | $0.33 |
| Shares Outstanding (Basic) | 9.27B |
| Shares Outstanding (Diluted) | 9.30B |
Key Highlights
- 1Consolidated net sales increased by 0.5% to $117.2 billion for the third quarter and $351.6 billion for the nine months ended October 31, 2016, driven by comparable sales growth and increased retail square footage.
- 2Operating income decreased by 10.6% to $5.1 billion for the third quarter and 5.2% to $16.6 billion for the nine months, impacted by investments in associate wages, digital retail, and IT.
- 3Diluted EPS attributable to Walmart was $0.98 for the third quarter, a decrease from $1.03 in the prior year, and $3.16 for the nine months, a slight increase from $3.13.
- 4The company completed the acquisition of Jet.com for $2.4 billion, net of cash acquired, with preliminary allocations including $1.7 billion in goodwill, to bolster its e-commerce capabilities.
- 5Significant non-cash gains were recognized from the sale of Yihaodian assets to JD.com ($535 million) and from the sale of Chilean shopping malls ($86 million), contributing to membership and other income.
- 6Net cash provided by operating activities increased significantly to $19.6 billion for the nine months, up from $15.0 billion, driven by improved working capital management and tax benefits.
- 7Walmart International segment net sales decreased 4.8% in the quarter and 6.2% year-to-date, primarily due to unfavorable currency exchange rate fluctuations.