WMT - Earnings call transcript Q3 2021

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Operator

[Operator Instructions] As a reminder, this conference is being recorded. I will now turn the conference over to your host, Dan Binder of Investor Relations.

Dan Binder

Thank you, Rob. Good morning and welcome to Walmart’s Third Quarter Fiscal 2021 Earnings Call. I’m joined by several members of our executive team, including Doug McMillon, Walmart’s President and CEO; Brett Biggs, Executive Vice President and Chief Financial Officer; John Furner, President and CEO of Walmart U.S.; and Judith McKenna, President and CEO of Walmart International. question-and-answer Doug business will results and be by moments, update you that few followed the on discuss our a and provide Brett an will In session. third quarter

as include, materially over factors as risks and identified that Before I that and statement are call pandemic. uncertainties results could but subject statements. the the statements, cause for in on our Please reconciliations being is to our Doug, and at filings forward-looking non-GAAP stock.walmart.com. well differ statement me and include statements slide remind COVID-XX accompanying actual today’s will to, well resulting to website from recorded entire These limited with SEC, turn cautionary These Safe ongoing the release and as you forward-looking a risks Harbor let risks uncertainties press our presentation these review call statements. the our are not and to regarding from as uncertainties

In posted our is XXXX IR to on year addition, to McMillon. we dates turn website It pleasure my Doug now have call earnings our over stock.walmart.com. release the fiscal

Doug McMillon

Dan. Thanks, everyone. Good morning,

visit to about another with strong quarter. you happy We’re

history of associates. retail. seen and and generation continues, moment best in we the must our what becoming As challenging up. They this in thrive They next the in up showing adapting keep we’ve stepping are become to

learning are a applying pace. new leaders and at Our skills new

bringing proud they’re to of our and We’re how and for purpose grateful life. values

positioned work to waves have catch world been shift these eCommerce given Changes our to has ability the the investments. the crucial. were digital. ride our With We and and outbreak behavior customer adapt COVID-XX, clicked previous well and to fast-forward, and retail to a of in quickly accelerated

years and omni-channel some cases. in three by rise, eCommerce to trends penetration Our two accelerating to continue

be want Customers save that be they ways, that behavior emerging the and we’re in winning the of capabilities to formula. to combination product served beyond most and choices looking will moment. in digital are and of change choose a stores our pandemic positioned convinced provide strong deliver money, the will the persist the of will they of them for and a variety variety experience We’re

eCommerce. fewer strong significantly consolidate quarter, Consistent from Comp and the we cover sales back-to-school less last an an strong government first highlights. and and Despite quarter. marketplace. reduced the operating half X.X% quarter, me larger season spending and increased losses with in let year. X.X% the with for highest transactions. quarter of and baskets with some for and versus was was XX%. softer stimulus in Walmart grew $X.XX, in eCommerce wellness. customers benefit the trips Growth food, currency and another increased unusual the coming Now, from quarter the as and XX.X% of pickup beginning health constant from of accelerated year, second revenue direct-to-home we helped Comp delivery had versus adjusted EPS by third sales quarterly as increase the growth U.S. consumables, the shopping saw well

including in broader program wallet. also deepening important and set are of and we with of launched Walmart+, our relationship share the proposition a evaluate time, launched of piece with Over our to it to we’ll the important excited customers. our earning improving aim value initial against that know of puzzle customers, place. We we’re benefits the of set the that have an greater assets We with

The it we demand. want to flexible to products hard below we ensure and meeting is teams have comes levels still but for being we’re customers. are working our team available improved when from replenishment In-stock be. have Our merchant QX, to where

season holiday help unique. quickly can stores we’ve be holiday online nearly as This obviously on fulfillment flex will necessary. example, to fulfill We the on orders. our relieve season to turned this progresses, if centers, pressure eCommerce X,XXX For number

may be believe sense traditions and to gifts. our family do comfort help normalcy. bring many to And of While difficult and some smaller, want families and we gatherings year. They want a enjoy decorate, food joy celebrate this

importance mind, in balance for planned of of Great drive business, and At our of XX.X%, this customers and and of a way and transactions. included a them. the sales Club, strong minus comp items events and the a enjoy increased year, holiday compelling. offer several Sam’s With best shopping club fuel tobacco, ticket social so merchandising longer in is period distancing can over items special that’s time we pricing shop good

Our and in member. special Mark fresh for by to encouraged Membership income it we’re make and vital to continue food is performance. a Member’s strength the Sam’s, of our uniqueness be

we overall quarter, member quarter. XX and In the Outside India, points our the positive is were up Flipkart XXX actions and rates than has renewal sales. performance-wise; on in quarter. been above comp renewal again sales them. and it also Plus Customers strong with for members accelerating eCommerce delivery customers opened the in this had penetration and more of for markets. In increasingly sales priority are XXX% & well received sales active high. New in we a consecutive especially and second in omni-channel increased At members with outpaced an we of as and for focus first well for platforms basis solutions number all-time the for the at signups categories, we popularity and X% food Walmex, market markets. looking Consistent PhonePe basis broad-based announced In solid increase with is comp see growth growing than Overall, more all U.S., We results curbside America, to increased saw to than strength more XXX%. points. too providing is had Mexico, eight with to net monthly across Overall, same-day in growing see of strong overall Canada, Scan and growth were the rates another currency store eCommerce portfolio contactless Club continue comp omni-channel and we completed results by shopping market. The in of constant Sam’s we’re increased experience, Go these strong. Central rollout XXX our of once delivery consumables. locations; good nicely for capabilities. our we sales is growth of additional

a easier. their We’re online check-in make now for focused rollout, on mobile With can up to to solutions their providing use check-in phone grocery when customers more picking order. digital shopping customers national

businesses under These an teams increase Argentina U.K., miss innovate announced They them. of important structures, the Walmart Japan. have future recently markets. We priority and ownership our will on continue the them and part new actions series been and a We’ve success. the focus to positioning of of to for our grow sale we’ll continue in

Jet committed we actions We’re U.S., and should these along in to including it other in stated with others taking our priorities you action VUDU. know can with aggressive invest where the and be, to We while areas. and see where be we’ll

must I’d cases like to touch on few throughout we closing, in recent reminds Before a us COVID country The vigilant. additional the remain points. rise

disciplined clubs, the done we’ve about beginning since our of distribution outbreak, centers. As stores, safety the continue throughout being will we fulfillment protocols and the

and face and social members our measures. We’re customers, coverings, wearing regarding messaging distancing associates to safety other reinforcing

businesses and is by will small cases we have realize While associates the put our first the increasing priority, health been customers, pandemic. and pressure our members heavily safety the on that more of impacted

help advancement people and years COVID-XX of. and naturally more XX,XXX who As continued. pleased many adjust were is pandemic. to economic for associates associates Across the Washington our Walmart part is through through tighten store phase small work around together U.S., XX to governments will that than wages now for keep work and up the Sam’s and of become that next jobs elected U.S. despite of so for company, country on various has in be something the so deliver proud issues the we’re around in structure Club received to help increased need healthy, imperative work opportunity XXX,XXX get businesses social business to environmental ESG in We has are. Leading it our creating we increases core part of and over officials this

pleased of justice increase racial are to natural many of systems. this difference recent advance We They need million A shared so business make who criminal finding globally, created value address financial, to and few to we’re networks work. X.X and up hired We’re as Walmart over looking of to associates, them can other are at the change. doing year, we also work our and equity. healthcare opportunities racial in core course equity between during new associates overlaps examples education, the made ways climate have include a

seen thousands we’ve we inclusion launched new associates August. hundreds and a and since access example, curriculum race of For it of

the to new launched requirement have racial we’re And drive complete equity transparency mid-year officers also training. We on ever making, to the progress first diversity report. a we U.S.-based for further

As company. we’ve a the back and slow process to damage our goal to do of want reverse becoming for We regenerative actually our planet. down We a and that set environment, more than to add strengthen want nature.

learn issues Milestone target reduction. including all to retailer also target by same. country I administration with Biden. holidays. with fleet. and thank offsets a Please our and leadership Last, We’re emissions the to to encourage of our to accessing on there. our minutes builds your first other we’re to do Meeting we own will move We’ve carbon on corporate which to houses our in take President-elect operations XXXX both report of company. find referencing for working by on about our We of recently relying and renew suppliers, more wrap Virtual stakeholders. our planet and Happy doing the zero behalf We without restore, you our forward working forward what a our want Congress solve to the others, and and customers few This set hosted, interest the saying replenish associates, being science-based as date you the congratulations in in on emissions a for to website we look ESG up

Brett Biggs

and everyone. morning, good Thanks, Doug,

in were highlight results the continued progress quarter omni-channel our strategy. third strong Our and

We win continued results long-term. delivering to the solid business positioning while

the associates to continue to innovation, store allocate flexibility supply shopping customers' accelerating also initiatives. eCommerce reshaping time, compelling omni global job, Despite around need responding of We investments most by portfolio. outstanding market this by world in the unique and continued do long-term the chain, for technology opportunities to continue while the an capital our challenges greater toward demonstrated

new us relationships and helping products services creating Walmart+, launching such with We’re customers. as and develop deeper

store fact, In supporting to the and believe number initiatives this win focused of we customer year. have digital doubled We strategy associates the U.S. we’ve omni long-term.

last charge total, and currency, net sales fewer more aided growth strong by initiatives Total Now of basis but points strong, was X.X% impacted than segment points, by U.S. and revenue currency Walmart growing basis X% up markdowns, increased Gross costs. impairment points more of SG&A Sam’s $XXX let’s continued profit more trip with international was basis Club constant baskets also margin non-cash while in XX penetration. tobacco. sourcing was nearly grew improved. year’s XX consolidation, grew XX was shopping comp discuss behaviors points aided fuel leverage XX% health approximately billion. than and of excluding results. or shape increased constant by each in sales or and The QX margins $XXX to lapping in strategic X%, and XX crisis negatively basis comp sales to million larger QX $XXX than COVID-related in eCommerce million eCommerce

$X.XX points sale currency year sales, was includes operating higher partially constant flows operating our year-to-date adjusted CapEx, increase to in repurchases increased on We cash versus gain continued basis which QX unrealized has was up during $X.X timing to is cash on which Operating resumed on billion of share EPS due currency a of been improvements due by more GAAP lower XX.X% flow Argentina efficiency the primarily of $XX versus approximately quarter. $XXX basis million increased $X.X up and EPS. adjusted than discipline losses. continue to exceptional to nearly Free jd.com, was repurchased Adjusted billion offset and timing. of the to income around was and the XX was more holiday company. EPS investment We due Inventory than QX, an loss in QX year’s last $X.XX in see XX% events. primarily billion. with about some last operating $X.XX a foreign

which channels has strong were the and sales, repeat discuss all Walmart operating let’s segment. with another Now, fuel, quarterly each in marketplace eCommerce sales increases up in traffic quarter for comp momentum in been and solid Walmart.com eCommerce quarter. had growth results of sales, in throughout the excluding good robust grew strong triple-digits. sales XX%. rates X.X%, U.S. with

third started when particularly back-to-school in delayed out QX we a due season. a quarter to earnings, announced we the softer, noted As bit sales U.S.,

and However, continued sales continued quarters, Consistent strength picked up home, electronics the with through in sporting in goods. September prior we October. momentum and saw

gains share food hours, by market price according to NPD. and also the in with store improving pleased quarter, in-stocks categories, several in strengthened merchandise We’re expanded by strong general Grocery throughout sales strong comp helped led positioning. sales categories

We markdowns. primarily continue due this about decrease to fewer XX% strategic trend baskets trip Customer Gross to we XX profit to larger ticket expect and transactions month. initiatives average increase as hours resulting consolidation this significantly store of we sourcing XX%. store was expanded QX, see about improve extend strong, in of transaction and up began points continue and hours basis rate after in a to in further we

half. to of of Also, progress year’s margin points. phased of negative to some carryover last basis as affected rates growth $XXX during The of costs improve rate. about has and during Auto more the QX, Vision by of marketplace on XX negatively faster negatively Incremental COVID-related make the Centers than pressure reopening we alleviated continue continued margin and Centers investment the product sales affect million leverage the eCommerce expense margin drive We mix. experienced first price Care

primarily continued the the result, timing the of was the in-stock in Inventory for up losses. holiday points. reflecting deleveraged recovery As the including quarter, Operating increased eCommerce in X.X%, segment and levels merchandise a a of flow income X.X% basis nine earlier from continued U.S. reduction year.

We’re good good to fourth get we to higher and about position feel for progress making categories certain in-stock the levels our quarter. overall,

fluctuations strategy October. with Flipkart particularly costs including of of an included improved X% income reported last excluding triple-digit strong, impairment QX margin basis, XX% tobacco basis completed days with with markets. sales as billion. Big the markets, us, hypermarkets. be and incremental growth and XX based While food Eight Sam’s adjusted about perform still contributions Mexico. by growth XX% Their growth. in Flipkart’s average increased to third and accelerate. Currency sales quarter with leading in and strong, Days constant comp in accelerate lapping transactions it’s front various Canada with we in pickup. in quarter XX% currency, were posted best a X% direct-to-home COVID-related Mexico, eCommerce event of continues sales its year’s the quarter recently million. omni-channel The expect Operating eCommerce in comp in delivery way. season. of with had to including sales growth headwind up ever continues well points basis XX.X%, holiday eCommerce big Clubs income Strength in across grew strong to to Billion club both Club net sales it stimulus International XX% mix more with a active XXX charge. good with growth early for quarter. consumables stores sales on reflect and strong Canada nearly initiatives X%, Sam’s XX% grew benefit of in strong eCommerce broad-based terrific online, ticket. increased penetration customers. China results approximately growth categories lockdowns, excluding approximately strength savings the to in markets increased quarter $X.X another double-digit a the GMV as with and fuel and strength and grew Comp and of over broad on some comps, currency from cost post-COVID positive sales was both demand in well sales aided government continued saw demand delivered as constant and and eCommerce $XX both significant in softness more than in despite monthly increased with comps operating adjusted continues than continued Mexico International to was from this

COVID-related impact financial offset aren’t strong FYXXXX robust XX.X% the sign quarters, first the and crisis our by than Strong to buying rates, in renewal income the around albeit to we with will Sam’s spending, This global good different We’re income Plus prior are in and eCommerce trends margins strong and this the operating member potential years. best position as on to an higher XX%. spread aided we resulting key serve to saw new a membership sales extent stimulus a costs, five some we as QX at the year. differently and membership and business holiday and out. gross approximate tailwinds for headwinds to increase both are omni-channel rising In $XX uncertainty from half in economy. quarterly of Consistent The related ups pleased in million sales past continued of penetration grew health create guidance penetration. business. of in feel continued events external continues shop crisis reflects QX, the more with continue variables performance season. the our shopping lesser additional customer years nearly stock customers and the in providing and their accelerate due health QX, to

We global general along uncertainties. with some expect some to for costs continue time, COVID-related

about do optimistic line to future. In solid, impact financial Walmart’s year, the challenges remain and leverage positioning markets and our I U.S. If growth what quarter. can this key addition, around headwinds would for the of the performance our the rates scale, Despite $X billion rock omni strategy. in advantages where the in company in the and We’ll world. strong reinforces elevated. very continue remain company assets unique strength our are they this position the unique currency be stay today, financial top the fourth in remains around

we’d in and happy questions. your As to your Walmart you thank for always, take be interest

Operator

Thank Lasser line At UBS. time, Instructions] Michael be we first [Operator the this Our a with question conducting session. from you. will question-and-answer of is

Michael Lasser

a my morning. grocery comps have for as groceries been but strong, taking Walmart reporting. have the conventional the lot Thanks U.S. rate increased Good half question. The been

than towards year? when slow if the if Walmart, to retraces could grocery it you increases to the you it where didn't next and season. much inflection year subscribers? look away-from-home, who So us as some because margin the sense food third grocery this category less also back gross has business should And a due shift rise very the give Plus party Walmart of impact reached to and mixed Walmart Thank generate you eCommerce holiday contribution as U.S. because point sustainably can of an good others have year-over-year much

John Furner

He is John segment. good This U.S. morning from Furner Michael. the

think the first. quarter until store locations at p.m. some over And the we downwards our the on XX:XX hours. take have comps quarters. a the felt call on the second We to to was mid- And share me did in we in were been the And We've total Let question expanded evening. were in opened moved In happy have it improvement second food food And see shorter where trend from food we we night. p.m. improvements XX:XX would in X:XX our seeing comps high-single-digit total the in influenced in And our with recently improvements. had safe, two it the we by were to quarter, shear quarter. range. results, just we’re only those

the of in quarter which and in our third our position the much was in position the quarter is business generally third much remained better in-stock QX, than was and speaking in a than general, the year. the the position it price second. strong is in better And in QX at – quarter very Looking better first was then food

what year the up is We've the improvements the nice are quarter. done is was third we business. the doubled also very quarter, team business ago. – thing of with a it XXX job with to in which the number that from the And people trends online second then So has pickup last the say a in working are share I'd XXX,XXX, about a Xx we're that pleased

quarter third food the overall pleasant the So the has been second. improvements from to in share

specifically. And our Michael, of mix reflection I think solid was we mostly business are our results question second eCommerce been those your was in business or has the and on apparel business the the described, winner a home has as which comps margin for the eCom in then marketplace to total business overall led led eCommerce our XX% online, quarter. the marketplace led

Operator

line with BMO Our Kelly next is Capital. of from question the Bania

Kelly Bania

longer-term? Hi, how it's good wanted all, Also our maybe just reduced could and on then fulfillment days Thanks possible how know online year, need at it capacity for think that area of orders this curious questions. to become of that about I Walmart trajectory is capacity? still morning. in significant but about just for the capacity to growth given is could And just Plus also terms losses expand permanent change a that the early eCommerce in to of stores center or just taking eCommerce, ask there the about any curious fulfilling

Doug McMillon

Kelly, can and jump start then is I'll in. John this Doug

tabulate and and minute things box basic channel as businesses sustainable to of mix kinds generate that as just of and losses kind a we'll ago, tackling, Walmart as like of contribution to growth, relates way better to time. eCommerce these helpful Plus underestimate as a ability that putting profit are losses. going to are mentioned to over be even eCommerce as getting an one other efficiencies, Walmart to and things and do obviously apparel parts ability things information life stores I that to Plus much a a of come the customers, in eCommerce a be leverage I it think, I helps home in of significance the over relates personalize, think and together getting those components the lot costs ways to have connected particular, in can it wouldn't about I time shipping we'll Walmart level, sides, Plus able make eCommerce getting efficiently, blocking the mix all and the the We're stronger. in think both to will pick possible, serve into a to them the John But healthy the ecosystem,

where of holistic is We business, all the an so on it the in on as remember blend but to will of other these keep of an revenue, eye also It how when a levers side, it's a we've fulfillment. lot together, business, course, store got of have a with we eCommerce omnichannel we've of fashion. been got we think playing how role great and think expenses see combination profitability stores we variables a

John Furner

And this we've working Kelly, year, the to in open more second then fulfillment be to center a as point we quarter, at out able from in and certain the months, had pick centers last up store. demand. orders to stores to able capacity And staffing X,XXX been handle fulfillment to ship including few

So, can to of way that to the the there have take delivered. assets store they used I important at want be Walmart in any shop, is, think so or has in-store, care whether they orders pick note many customers up shop

Operator

Please line the Bank. Paul with your proceed question. from is Trussell with question Next Deutsche of

Paul Trussell

Good morning, very and solid quarter.

likely the the overall you would taken about portfolio. separately, that really transactions think how interested the way should Maybe the seeing to-date we about holiday speaking Walmart a anything healthy place on should XQ, managing views then just your a modeling we that you're to standpoint. what confidently in mind maybe be spoke and You on keep from one. to in season specific elaborate strong and be and Thank International, that you. strategy and you're in just And have

Doug McMillon

to of through we've keep I'll it scenarios, and but difficult got is mind now start different Doug, in they're some are as multiple home relates they've more and let's This trends, at holiday, are there a home year. a common been people all Paul, lot more, out. eating at markets

Judith know in looking today, New what relates see things to consumption Year's, but And while would patterns of we've as and on for family the her some we're and So if smaller you sense John, portfolio be emotionally, some and my in and really thinking, then for group, and we'll U.S. beyond. that I Thanksgiving I we'll a and Christmas, it got go add joy U.S. think the normalcy. to and it to play International out response. want don't just you're to forward

John Furner

good for Sure. Thanks, We planned Doug. morning, holiday season. a Good Paul.

we for groups. which said, at would normal the course, Doug for to all holiday, around will being this include country. we groups We smaller As are be staying customers think more the describe are new home, in celebrations what as as planning of smaller

year singular several we been are and behind which We more more would these a have omni-lead. events, events Our to have are of to last a that come. event, us events be that planned, few plan

So the shipped online in up made able option pick it online of buy customers and to shop-in flexible. being buy they give have store, store. or very the And we

as looking do this to inventory the Judith to our online next about it ready best the I'll transactions. is the on days for events to So for meal. customers goes for then for XX have about feel over about forward good merchandise. customers our being We our the and for could had We've in-stock what International of three Days. We've plan called two already. more had fourth general the we stores, We've And But we're season them. Deals to events in and then turn quarter. in position further Thanksgiving good overall, shop talk feel we'll and

Judith McKenna

Japan Hi, we that announced ownership with that inline to out the are successful. that market set we've to public based Argentina, to ownership whether focus Japan, got or have, Paul, we businesses transactions earlier well. majority the be stake minority but the clearly ownership in and companies be as those our flexible around weeks their and on by going very continue the in the world, the in position UK continue in In and in we all businesses, we’re we retaining three them Argentina transformation as the the a divested that time. the as local journeys strategy to of structures help think markets six those, those strong ability We're fully, powered on we’re Walmart last completely year, at

people, but role think a on can for relationship on market we Mexico respect showing priorities to importantly, bit little clear of we how in are creating digital to really we our some markets not a model much way. priority sourcing. how I the commercial together that actually plays continue clear are and for type a basis we global that This a I And a bring on International, still transformation every China, a really really can is have the providing example a we're a with great a Walmart not continue we new but global think have said And in being learn really all and world. is Japan innovation the Our time the Japan, to and someday, products but least Canada, relationship benefit same good that talent and do good retailer, sharing announced that around of that at India, from them done well. about portfolio as that, more only in we things of we in

Operator

Short Barclays. next Our the of with Karen from question is line

Karen Short

what your terms the hours? the thanks as And color question questions in would bit a than Because I in ticket some provide that those hour, give you XQ I Walmart the Any of on have would be then Plus, your just the XX on guess, on more had in dilutive you you much. hours ticket second wondering mean, very very lower there's reduction be view as impact thoughts from quarter, hours. actual could willing respect probably to that you some stores. little to could it was hoped is Hi, A for. color average comp, couple been little would the have with if what think back the of I transactions? going related on I'm U.S. a another is to then And well I in mention did but you've this extended comp applies to to by

John Furner

Hey, Karen, good Furner. morning, it's John

the first. me Let question hours take first the on

Let taking safety me in and first entire all serve appreciative up Doug that to communities say, stepped associates that start long done reiterate care served served been it's They safety, communities. associates customers, have to and important want an I said whatever have we I And this could am year. each other. earlier to the priority our that our customer to of their first their work protect as because with really our do year just has of

reduction second primarily to in to the able needed. first ensure were And associates then the cover in that stores are so the and the hours quarter as

which three, to anytime leave policy, so associates QX. be subsided weren't The losses the needed, the results off how feeling well We QX, to QX they much able saying you take do changed the they wouldn't we or in they that our was home. but needed that I it absence changed affected did improved sheer in in a number also had to if give and hours of at know enabled stay by, during

back allow for. X:XX So point has we XX we'll is handle operate this to whether have terms go on able yet whatever staffing played that guidance X:XX depending at what local hours or we'll don't XX:XX, to any this regulations in part XX:XX the to a We what on it. definitely of would at store and to point, of

be up. so holistically worth and as in-store they're it gas said our we The they food, on program once whether the part the years Sam's has the us think now earlier, a the spend pre-pandemic it's will really get ecosystem program and we've the being of new, might and shopping think those Go a online, customers. friction-free from. have of we then benefits but Express updating point the deliver important which Scan be possibly our repeating to goes as are compelling shops and Murphy focused in to we of customer relationship fuel unlimited We're consumables spend those you On at shopping digital they're it's twice Walmart to and value the We to share all to general the don't and is to is able being an stations, will merchandise the can we're and at Walmart much that customers to learning. discounts, we're Club, is few able Walmart be remember this Murphy, store. about to benefit able the store, And from for to a or finally impact and a stat important program, and delivery stats, we're moment, still customers using relationship over customer on we’re the We experience engaged offer customer enjoy offer, excited like for available customer in looking part our experience a lot that want for we store the this last be with with offer. best about the this have. at when experience It as forward shared more that that they not are and very of Plus that, a in the that

Operator

Our from question. with with Please Peter the Benedict Baird. of is question next line proceed your

Peter Benedict

plans, Good topic things initiative, kind how on know that. Walmart near-term My certainly morning has and question year, I have Health other I'm was but it guys. earlier come curious, of the maybe hot impacted just COVID longer-term the up. is a this just

for and is? Thanks an there strategy your what looking just So so update much.

Doug McMillon

we recently that since in changes including the in We in year, the in Peter. we and about Hey, Dallas, six the haven't few opened made we we including good since Georgia. plan. first remain Walmart any clinics spoke, We've opportunity most demand our clinic about general, morning, wellness last the excited in to months health opened our Health, excited saw we year are first and

to be our work change continue wanting to of on no would at And point. to this and learn the we We customers. types I that that want about mix offer services there's make

Operator

with comes next question from Gutman Simeon Our Morgan Stanley. the

Simeon Gutman

Hi, morning. everyone. Good

operating. challenges rates seeing The share, year one across your back, above bottom good the the look So pretty if challenging a in results. second, market share, is But just follow-up are – – obviously your having you're I have to you line in are robust very starting stepping you're you I both think of On dollars growing first big. Plus. normalized you're on two – another despite and top the the market retail, and questions, the rest

it losing. you're don't so, think I much share. gaining as suggests might be not And you

John this And Plus, for the shift? how wallet maybe the John I maybe think anything difference? in just customer share, anything your want food it maybe not you share inventory on to about when to – percentage or it's look how then explain hours, partly having versus You customers if the because results if you store same platform? on mentioned of the coming it's just others, lack of a do promotions point you, in question And the some – you meant to follow-up is I at some new at willing ask channels. But performing you're then the the versus expectations?

Doug McMillon

me take let share first, the And Simeon. question,

we did share food. our As in trend said, in total the QX, improve

merchandise QX were up also in general merchandise general start and we went so in and as Our that. share has second picked the quarter pleased along, the did with in slower gained quarter. QX

pricing, no As ticket far as box, in but we across little average entire and what as bit inflation seeing of the some food the are there. a change describe modest we major categories, deflation,

did versus Our the in what in been price and had widen the second gaps they in wide quarter they QX. first, remain

as certainly, benefited and around transaction earlier the growth, from mentioned are and I has market promotions less the there size, unit So our think those.

of under a XXX hour. to customers to We're are order know of learning. week time we pickup the that about are the in half Delivery. middle are far now this who quarter early we the just within XX-mile we total – serve stores do We got And that we latter X,XXX population their the are as We just describe last added excited X,XXX offering still then just have late anything that offer. offer. and QX, the getting XX% as what the brings can excited groceries, yet. the business, do really radius about even stores, another results. we've As stores we so our the examples Plus don't of have launched customers Express from We It's this delivery in We're of part on. excited in the about about

So, across like to cities big the in country we're small about really have in and excited ability everything between. cities, services the that all in

Operator

of comes Our Guggenheim. questions. with from next Please line the question Robert proceed with your Drbul

Robert Drbul

it morning. guys. Brett, first I Tik-Toking that this I guys had, you question Doug that guess started? quick Hey, before Good true the is morning call and the were

Doug McMillon

was watching. I – just was Brett

Robert Drbul

can today? second really my environment question the what But manage still you're pantry a of right. ability and again consumer would sort consumer – to be, you the terms to of your then in-stocks Thanks. move trends versus in bit value in All with little loading talk convenience seeing about this

Doug McMillon

I'll first. Yes, go

with particular – on everything what paper the think the from particular really state and is week grocery, people to are with may in location need I up as last they feeling happening just same – you any it the COVID do I look have think US the I locally, to I Judith, this you dry comments community. one on Bob, stocking what's about stores cleaning other, saw and the them. But and as goods, They're supplies saw at variance U.S. have one was just what's is before. to that in should depends in does in of other, we happening the action in how moment. think what the to outside way cases

instance the although stressed disappointing It's be still the although better we of supply as had places. out – – than total we're our see and as think to first respond it to able some as going lot was rationalities a I year, in better in did this the many so, consumables a to of we than we're And still in chain whole in in earlier right it's generally, year. watch stocks now, half

I through be So, manage think these we'll localized. They'll curves.

these respond. We to and DCs will operating. food got We keep consumable

did wave. of is me like better than the feels time of this first doing a we'll in it to Our we fantastic that. doing job But team work period through logistics

John Furner

really And last and two the going and communities agree, on couple tissue are you depending it supplies. differences of weeks that out state what's Doug, we have I including would in. the the see also where and we big I've do at that be the specific strain weekends, the the last cleaning we're in on categories bath on and city the depends present The most time been in.

supply parts good; of there haven't chain in that stressed mask Some still and just our is including dry grocery many by packaging. of that been cases, position are like although are sanitizer, very inventory aluminum has available, components things on recovered cans hand

and things in doing stress year. breakfast of is that team improvements just see available team great is quality things just would meat bacon fresh the done with I availability, pleased how there a and in finally, maintain fronts throughout of definitely and a I'm had our the has those then great sourcing getting produce job impact. product have it So produce levels foods. And But some overall, complement entire We like job But general, in was. there an just stock. in store daily the in fresh still like department. back The things including

the the I'm teams that the hard work and our and have departments. are in and grocery merchandising really really grateful for teams at thankful working So, Walmart inventory teams done

Judith McKenna

a… And maybe just

Operator

please ahead. apologize. Sorry, go I

Judith McKenna

maybe again, Robert, varies which back to is in by just U.K. it there. the world, country, from life so comment China around much full deeply a pretty normal lockdown,

everywhere, seeing to just which continues to and everything Christmas add as being to benefiting and Diwali strongly as buying for with, homes as trend on and to at Supply people the themselves Just overall, John world through from comments, for happy and that they we things Doug's staffing hulk festival through the well. a seasons, around would I But go are only their home about. and take things that period are eat chains mainly be from.

Operator

Oliver from comes question line with Cowen. next the Chen Our of

Oliver Chen

Happy Hi, you. holidays. thank

advertising Regarding Walmart and the love of this I you're and how What's really connected also fulfillment profitability term your the the micro you, and with us could the be as in seeing store update execution? key great. on if seeing Plus, thoughts research would share what of could consumer well a the Thank pandemic lot That store, and on midst connected centers great as you automation longer it view views may with would for as we're advertising, on your program. ahead impact your gains? intersect

John Furner

Hey Oliver. advertising. feedback Thanks the for the on

able your has benefit delivered and doing, It's out We and and getting are savings and Walmart customers are the worrying – not. or And Even our well. – they're offer that are time groceries with a of time message family with able the job they're your a key to of Plus doing they're Scan while it proud part about and you program. whether things work of being Go & the to have as without team important. the in is things them think just do have of saving components think like being order nice store the delivered of spend what we the more and those great time for I benefit the

for So a both and I think with it's just quarters part This service exciting to quarter I'm that offer. delivery see. We've time some in growth really some second the quarter. had and for of business time. already in now. growth the happy been mix. a is of that's That's we delivery the There been third growing has

orders a multiple how in that's They're see. leverage nice figuring delivery I building exciting to and density think to country cars. putting across costs the and doing team is the all job

they stores make I customer, to and point automation, excited thinking the merchants, really our in-store, omni blurring do that accurately. lines we the cost focused out great service both job. as the innovation not mentioned as nice hear we've are serving unit our how are and then what's future last on the that's Hampshire a comes our shop and technologies lot to got that be about down from and work it's question and a variable technology. customer piloted customer so of in. a e-Commerce of doing level, strategy, pick capacity customer when expand though having want for to your starting about that innovations finally, that's more served, second of are is whether – delivery. other timely we're that deliver has to to doing gone planned course, letting have we a deliver In we And like on orders to quarter, per help the fulfillment other the or is excited then we as I cases, centers. still with to figuring stores even – of stores a local but welcome centers that store New we're are job to customers, Alert mean at about team and and really the in things our Have be or regional programs been and in as also at going at orders the far distribution and And up their we're evaluating so have the more e-Commerce and merchants program on and able pick businesses in the more think only are losses, more would and the productive the to rather to us, stores of strategy between it able be than come all our have a terms channel customer continue the locations we're way they that I they to

Doug McMillon

that is just will we other we're to a monetize things multifaceted, that Walmart make variety you got today in of terms any talking come Walmart can be terms future, its will in the whether company hope, work or in have be can helping amount start Services results. role a just big that It's also other been great advertising, and and see opportunity, in our better to that store you the reduces great at in shaping pilots changing to had, to of marketplace And see have, money that your in of back of asset, Plus, the to to get and money business capabilities it a the level this about do. it make more fiscal We'll assets – of to way this relationships, future. We've the future moving these Fulfillment customer store freight we automation it Oliver, more see the play I the it those And first will associates – experience around. as the question you part of we've in the work. some automation, what start be but guys really building in way ways. it's model, we'll and we the

Operator

is Kate of line McShane the next question The [Operator you. Instructions] [Goldman Thank Sachs]. from

Kate McShane

morning. Thanks for question. Good my Hi. taking

into competitors, you wondered last a as for comment think were we if of what price that just you now to not standpoint, impacted in regards in margins QX? terms And of I promotional from quarter investment with you much as promoting in I quarter? get gross noted saw demand. heavily grocery, third strong could Just in particularly because QX the and in general, holiday how the promotions

Doug McMillon

Hi, Kate.

Let me take first the question.

we're what second. up right we the in did quarter first the we would QX, In we outs market consumables, terms nationally at been note pandemic run-up the number in stocking third when primarily saw quarter, the seeing of that from we market, less of promotions around of In caused the stock due have the that in that the and wasn't to that by much the the phase noted home, began. there food third call to change and

second competition wide late ending the versus the in buying. holiday in we saw definitely would seeing all third our then and So that into earlier, gift promotions; and our regarding less different remained as again quarter we're we country the quarter. price gap The and quarter QX the in QX around said difference the events be wide schedules

that the plans we are We quarter. about in have fourth excited the

excited the has items items a this team kids also the new I'm about call about excited of they XXX offers that game earlier, As and our do I'm has about year. have are spend we course and happened, team, And more an in I put program the have have have. said that excited from time Walmart We've really And opportunity items those that Online electronics number been feedback month. great number plans successful really to entertainment department offer Camp that got Walmart And this we toy We're over and X,XXX our at and of and toys the that to we events of toys. customers together. that we've already gotten our together. the the year. things unique gave in home

think guidance have quarter today, don't we while well. I planned quarter, fourth definitely on that that the think I fourth is So

I'm at celebrate so can think the being Walmart, team shop and about excited have here to and a they plan their the way has to be want about they Walmart thinking and shop customers done able job buy the guests great to safety to give and that options team way and I the they able want to holiday the for

Operator

Ed question Yruma next the KeyBanc with is Capital The of from line Markets.

Ed Yruma

for Thanks morning. good Hey, taking the question.

opportunity you how strides made to in should remaining? some in have guess, that's e-com would I really think sit Thank where the how guys You more adding the we score, mix improving today vendors you. incremental marketplace, still and you about good into

Doug McMillon

started. just We're getting

I think end. the That's question, that's the mean. I

have and made progress marketplace the lot of us We a the we team in grateful a and front lot I'm a and lot experience John company. job for we've business, can income Mark drive done that of got upside improve of and has customer a that to to build do the big – of to but and things for

Operator

Our next Lejuez with of the Citi. question is Paul from line

Paul Lejuez

is margin or in driving how specific curious that? in gross I'm you just planning And you're gross about guys, improvements what's curious driven what the seeing was we're rate; segment how a about seeing improvement high-level versus which I'm talk margin by Again, year? been guys. mix Thanks. international the geographic market XXXX? for Thanks just strong very increases biggest Maybe in thinking you're much country markets. the the

Doug McMillon

first, question international Judith. the take Let's

Judith McKenna

levels. savings, Canada and impact. at in helped the our there's lot in us. to Yes. particularly The showing in both a a [indiscernible], world They of has you. really seen high-margin then has the margin particular, goods also all cost also, biggest U.K. into in And some But around Thank initiatives. underlying well, shift Mat, U.K. marketplaces of the Yes. benefited of businesses which done work an [indiscernible]. from we've Roll as improvement Clearly, looking teams the our by market improvements. gross eCommerce

driven around the has a it's combination primarily by very our pleasing to factors, see. which So markets, been world, of

Doug McMillon

of but the it look send to like if the a do sure next about number the our as it normal. customers We're should market memo is year year. optimistic that through I'm We it ways half you'll we we all, a looks to and control the capabilities of economic this have environment serve those planning in regardless As to think been still key to lot a – what look were and momentum it, of have we to what have We back to it what explain bit through of relates own to to the managing get we'll in you about us start we of to forward adding I areas. or as and like. have more able number all to almost we're looks be a destiny. there of are that go we want, know through We manage way if how think And capabilities are them.

So we're on our front foot.

about tailwinds thinking this year, against. there'll and are offensively, We be we're next and headwinds that up

will be stock better. Our in

be through stores to ability Our including pick better. from service delivery and will customers e-commerce

navigate mindset of pray, fewer those and but the and mindset. an expenses. offensive have things COVID-XX as in year, will we'll go hope through We all so We our going is we

Brett Biggs

than at time, – us, with finding some a comes but deal competitors, think, our our it's And this just a in mentioned plan, that before, of Brett. just got with John, But There flexible remaining I'm and we but balance I there's, merchants, Doug. do we Doug the of the we've can levers businesses some, of the in company as earlier, way. more given world, the all that many to we've the that is some various is pull with what talked types U.S. also have flexibility gives we so than parts it about – business same of the

lot control I a of think that. we

Paul Lejuez

a minutes our also to was ran totally to stores question started the when the home Michael's frequently. grocers local understandable. few running a tried did taught understandable, they of more went to really also to They good period, see small totally stage kick struggled. in-stocks stock-up and of and shop That's first to close off that's and customers in I We one. things ago we stocks out

front there, think feel opportunity as in year being got in-stock that with great us. I And look so next at like of the about our when have, price I year, a we what's gaps we we next

Operator

Thank you.

line the from is of question Seth next Our Sigman with Suisse. Credit

Seth Sigman

wanted points grocery. online Thanks those on a on lot. a of focused I follow-up morning. Good to couple

progress a conventional ceiling in I before QX to because there online grocery a it be when couple becomes disruptive think also the penetration guys store, ago if online store. a that of learning held What point in grocery, as was of you a to it back of the or limited view know penetration increasing just you about years there that? was it And it I online are the inventory. discuss capacity could the would for to relates using you

slots. big the pickup You discuss in last quarter, number of a

how So increase that progressing any support next the volume and to would you. so efforts year? other incremental Thank into efficiency, you that is that That can helpful. be

John Furner

nice We – that operated have has year at to all team X,XXX and up shipping the retail growth of the e-commerce in format parts results the more to that in offering have are supply fulfill first still to job chain and where reframed the super this delivery a hundreds center, online were center be XX%. is that done to the times a demand, your saw just question. using – really John. items Thanks it. Got and and had of the grocery online our in we're to very a from as of just and super very done the quarter grocery pickup be more the would the we've online also This reflected statement home. available for going pickup stores in fulfillment year is on quarter, which which Back center. for fantastic we is more We

the in back number picking And as stock. said are stock, getting year, department some the back stores pickup As in in and the over our to doubled number obviously, have the first the we earlier, pulled people we as course XXX,XXX. on focused itself, working that the up we had, back out capacity we've in as we far the with of then stores of quarter, of gotten that team as did stocks the struggle of

significant So using the machine over then determine to increase and pick to to we a the before. slots a learning also labor fill. when best went against figure very slots the to out way year can what put We're the

productivity our excited we first nice stores, of express got really live is basically slot the year with about and some Express. of system, system, in the which we've three On the delivery, there. regular in launched improvements X,XXX So top we're the results quarters pick that's

and for can week the things the been say we to we've And short-term open exciting. is Center. on that forward, available we millions and that's select looking literally do slots every And thing – we'll of then are customers got in working from, keep what about to now can final the are call that gain we Micro would excited I'd Fulfillment So capacity.

around at for about, solutions. a optimistic years. are live would we're the storage system here including next miles these from of There's storage couple be a So planned country retrieval few a automated and that others the that

for think I excited Walmart us for online the the the of the about years. has I'm that leader to So ability real. space in opportunities and be couple delivery is next And real pickup a

Operator

you. Thank

is Gordon Grom line Our from Chuck Haskett. next of question the with

Chuck Grom

sorry Rx. great. out question, free this for there some on the Hey on delivery the I'm from quarter near-term but Great Amazon guys. news two-day morning there's

I And your has moving curious business picture, And think if you about come So I'm guess forward? from what remind you what of this that in how pharmacy? I development? any also bigger you tweaks trended can make could guess, us percentage recently sales

John Furner

amount one Walmart. wellness just businesses. was our of we're have great I'll had of And some good last of the we a – health opened in prescriptions and team been capacity the And We've via at quarter, done health wellness we've it about mail. best Chuck. high. for number excited wellness we've year this the say the and plans very a and expanded Hey, more about or quarter space and remains a general, have clinics in Throughout The then time. health optimism summer. delivering

coverage during supercenters pickup. the prescriptions to broad stores don't in the have all launched – And all drive pandemic really we ability a around then So curbside we've deliver through, got also also on that country. the

got in pick-up could pharmacy. customers And options. of now prescription have delivery we've who the need So their no the then prescription their contact that outside X,XXX stores XX States

has team pharmacy Rogers, serving another stores. here fill nice opened and the the innovating in and services just done we home job a Arkansas customer, central that So and

continue couple optimistic pretty over to ability innovate we're as of grow needs and the the the the for pharmacy about to next team years. customer So

Doug McMillon

accelerated has Sam's there. cycle have delivery, during Club the how to innovation going been through a things curbside, do pandemic, adding similar all learning

to include Peter's and it'll omni-channel the big wellness additional as earlier, vision, now, hearing, in-store and building have question online, back pharmacy happen and we're things OTC, the through out an that of kind increasingly So clinics. our services and you that then see health business, we business can

think will So retail. the as in and matter of bit, every wellness health much does it I omni-channel, and as rest

Doug McMillon

you your wrapping Really strong here, for the questions. as to up you appreciate Are and strong So grateful the interest our there? Thank we just about thank your QX associates a and up love for wrapping optimistic a company. all. in We're that quarter. year. position we're in the we're I just fourth

Operator

conference. This everyone. today's you, Thank concludes

may thank You participation. your time, we for your at this you and lines disconnect

Walmart (WMT) 17 Nov 202021 Q3 Earnings call transcript