Wal-Mart International Business Boosts Q4 Performance

Fourth quarter International net sales were $29.6 billion, an increase of 19.5 percent from last year. The increase in International net sales includes the company's Chilean operations (acquired in January 2009) and a $1.9 billion positive impact from currency exchange rate fluctuations.

18 Feb 2010 --- Wal-Mart Stores, Inc. has reported that net sales for the fourth quarter of fiscal year 2010 were $112.8 billion, an increase of 4.6 percent from $107.9 billion in the fourth quarter last year. Net sales for the fourth quarter included a currency exchange rate benefit of $1.9 billion. Income from continuing operations attributable to Walmart for the quarter was $4.7 billion, an increase of almost 24 percent from $3.8 billion in the fourth quarter last year.

Net sales for the fiscal year were $405.0 billion, an increase of 1.0 percent over fiscal year 2009. On a constant currency basis, net sales for the fiscal year would have been $9.8 billion higher, increasing 3.4 percent to approximately $414.8 billion. Income from continuing operations attributable to Walmart increased to $14.4 billion from $13.3 billion in fiscal year 2009, an increase of 8.8 percent.

For fiscal year 2010, adjusted earnings from continuing operations attributable to Walmart were $14.2 billion, or $3.66 per share, versus $13.5 billion or $3.42 per share in the prior year, an increase of 7.0 percent per share.

Adjusted EPS for both the fourth quarter and the full year were also above the company's most recent guidance of $1.08 to $1.12 and $3.57 to $3.61 respectively, as well as above First Call consensus.

"Walmart's exceptional earnings for the fourth quarter and the full year exceeded our expectations," said Mike Duke, Wal-Mart Stores, Inc. president and chief executive officer. "These results reflect the ongoing underlying strength of our business and our strategies to improve shareholder value through our priorities - delivering growth, leveraging expenses and improving returns.

"We successfully shifted the productivity loop into higher gear. The diligent way we managed our businesses and tight control of our costs resulted in the company leveraging operating expenses for the fourth quarter," Duke explained. "We plan to grow expenses slower than the rate of sales in the new fiscal year.

"The company added more than 34 million net square feet of selling space this year, with International contributing more than half of that growth," said Duke. "We expect continued strong growth from International this fiscal year. U.S. sales will be more challenging in the first quarter, as Walmart U.S. cycles through strong year-over-year comparisons and deflation. We remain focused on growing top line sales, and expect improvement in the United States as the year progresses."

Walmart continues to generate strong free cash flow, reporting a record $14.1 billion in fiscal year 2010. This is an increase of almost 21 percent over the $11.6 billion reported in the prior year. Duke also noted that the company continued to deliver consistency in pre-tax returns, ending fiscal year 2010 with return on investment (ROI) of 19.3 percent, equal to last year.

Fourth quarter International net sales were $29.6 billion, an increase of 19.5 percent from last year. The increase in International net sales includes the company's Chilean operations (acquired in January 2009) and a $1.9 billion positive impact from currency exchange rate fluctuations. On a constant currency basis, International net sales were up 11.9 percent to $27.7 billion from last year's fourth quarter results of $24.8 billion.

Full year International net sales were $100.1 billion, an increase of 1.3 percent from last year. The increase in International net sales includes our Chilean operations and was reduced by the $9.8 billion impact from currency exchange rate fluctuations. On a constant currency basis, International net sales increased 11.2 percent to $109.9 billion in fiscal year 2010, compared to $98.8 billion in fiscal year 2009.

Walmart U.S. expects comparable store sales without fuel during the 13-week period from Sat., Jan. 30, through Fri., April 30, 2010 to be flat, plus or minus 1.0 percent, as compared to 3.6 percent for the comparable period last year. The company will report this comparable store sales result when it reports first quarter earnings for fiscal year 2011 on May 18, 2010.

Sam's Club delivered solid comparable club sales without fuel for the full year, with strong sales from fresh and health and wellness categories in the fourth quarter. For the quarter, Sam's leveraged operating expenses after adjusting for restructuring charges. Sam's also reduced inventory by 9.5 percent versus last year, with some of the reduction due to deflation.

Sam's Club expects comparable club sales without fuel during the first quarter 13-week period to be flat, plus or minus 1.0 percent, which compares to 4.2 percent without fuel in the comparable period last year. Sam's will report its comparable club sales May 18, 2010, when the company reports first quarter results.

Walmart International ended fiscal year 2010 with more than $100 billion in net sales, with strong double-digit sales growth in the fourth quarter. Many countries delivered strong comparable sales performance and gained market share. On a constant currency basis, fourth quarter operating income for Walmart International grew faster than sales. International rounded out the year by leveraging constant currency operating expenses for a fourth consecutive quarter, before the Chilean acquisition. International remains focused on inventory reduction and improving returns.

The company expects diluted earnings per share from continuing operations attributable to Walmart for fiscal year 2011 to be between $3.90 and $4.00. For the first quarter of this fiscal year, the company forecasts earnings per share from continuing operations attributable to Walmart to range from $0.81 to $0.85. Earnings guidance assumes that currency exchange rates will remain where they are today.

"We are confident in our strategies to grow our business around the world and deliver great returns for our shareholders," said Tom Schoewe, executive vice president and chief financial officer. "Walmart remains a very strong company financially, with record free cash flow for the second year in a row.

"Walmart doubled its share repurchase activity during the fiscal year just completed versus last fiscal year," Schoewe said. "Through our share repurchase and dividends, we returned $11.5 billion to shareholders during fiscal 2010, a level of return that is 58 percent higher than last year. We remain committed to share repurchase."