10-QPeriod: Q3 FY2020

Walmart Inc. Quarterly Report for Q3 Ended Oct 31, 2019

Filed December 4, 2019For Securities:WMT

Summary

Walmart Inc. reported solid financial results for the third quarter of fiscal year 2020, ending October 31, 2019. Total revenues increased by 2.5% to $127.99 billion, driven primarily by a 2.5% rise in net sales to $126.98 billion. The company demonstrated improved profitability with consolidated net income attributable to Walmart surging to $3.29 billion, a significant increase from $1.71 billion in the prior year's quarter. Diluted earnings per share also saw a substantial jump to $1.15 from $0.58 year-over-year. Key operational strengths were evident in the Walmart U.S. segment, which reported a 3.2% increase in net sales and a 5.0% operating margin, reflecting strong comparable sales growth. While the Walmart International segment saw a modest 1.3% revenue increase due to currency headwinds and the divestiture of Walmart Brazil, the acquisition of Flipkart is starting to contribute to growth. Sam's Club experienced a 0.7% increase in net sales, with positive contributions from eCommerce and membership income.

Financial Highlights

50 data points
Beta

Revenue

$126.98B

24.5% Gross Margin

Net Income

$3.29B

2.6% Net Margin

EPS (Diluted)

$0.38

Total Assets

$239.83B

Cash & Equivalents

$8.63B

Free Cash Flow

$460.00M

Financial Statements
Beta
Revenue$126.98B
Cost of Revenue$95.90B
Gross Profit$31.08B
SG&A Expenses$27.37B
Operating Income$4.72B
Interest Expense$547.00M
Net Income$3.29B
EPS (Basic)$0.39
EPS (Diluted)$0.38
Shares Outstanding (Basic)8.53B
Shares Outstanding (Diluted)8.58B

Key Highlights

  • 1Total revenues increased by 2.5% to $127.99 billion in Q3 FY2020.
  • 2Consolidated net income attributable to Walmart rose significantly to $3.29 billion, up from $1.71 billion in the prior year's quarter.
  • 3Diluted earnings per share increased to $1.15 from $0.58 year-over-year.
  • 4Walmart U.S. segment showed robust performance with a 3.2% increase in net sales and a 5.0% operating margin.
  • 5Walmart International segment's net sales grew 1.3%, though impacted by currency fluctuations and divestitures.
  • 6Sam's Club reported a 0.7% increase in net sales, driven by comparable sales growth and membership income.
  • 7The company continued to invest strategically in eCommerce, technology, and supply chain initiatives, allocating $3.86 billion in capital expenditures for these areas in the first nine months of the fiscal year.

Frequently Asked Questions

For the three months ended October 31, 2019, Walmart reported total revenues of $127.99 billion, a 2.5% increase year-over-year. Consolidated net income attributable to Walmart was $3.29 billion, a significant increase from $1.71 billion in the same period of the previous year.

Walmart U.S. showed strong performance with a 3.2% increase in net sales and a 5.0% operating margin. Walmart International's net sales grew by 1.3%, despite currency headwinds and the divestiture of Walmart Brazil, with contributions from Flipkart. Sam's Club saw a 0.7% increase in net sales, benefiting from comparable sales growth and membership income.

Walmart is prioritizing strategic capital allocation towards eCommerce, technology, and supply chain initiatives, as well as store remodels. For the nine months ended October 31, 2019, capital expenditures in these areas totaled $3.86 billion, while investments in new stores and clubs were significantly lower.

Walmart is involved in several legal proceedings, including the ASDA Equal Value Claims in the UK, National Prescription Opiate Litigation in the U.S., and previously resolved an FCPA investigation. While the company believes it has defenses and intends to defend vigorously, some of these matters could potentially result in material liabilities. Environmental matters and other claims are also ongoing.