WMT - Earnings call transcript Q4 2022

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Operator

Greetings. Welcome to Walmart's Fiscal Year '22, Fourth Quarter Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation [Operator Instructions]. Please note this conference is being recorded. will Vice the President I Dan over time, Senior Binder, Investor this now conference turn to At Relations. Dan, you may now begin.

Dan Binder

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

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

Doug Mcmillon

about results. thanks our Good quarter us hear fourth morning and for to joining

Let's jump right in.

EPS of team delivered growth divestitures. Our X.X%, excluding and sales X.X% growth net of adjusted

number team challenges world positive. Consumer and was the the deliver in in and around these in were the and gain of strong strong. overcame U.S. U.S. comp quarter share to transactions results. during market a food continued And a to the We demand consumables

the the products Going into people to confident And we had the we prices did. and deliver. we were the that quarter,

Sam's single delivered Food also digits consumables in globally. We throughs categories and high low Our strength and in strong comped strong in based in across U.S. results saw merchandize and inventory sell the seasonal were year. broad apparel position categories China. against we Club And and U.S. improved general across markets. the last

Our shareholders more our I of we're business. points the mind. of than navigating like basis nice and for mixing with rate including customers U.S. goods points cost Consolidated doing are XX inflation in out increased merchants how pressure profit a the gross XX basis in Walmart job quarter, the from

how finding our we working We’re grow prices. in proof inflation, bottom And a line our price the share can roll manage keep items. and we full year, QX point growth our points market want we where range them, our against top where to opening can to gaps deliver closely with that places we're back and suppliers we and algorithm. the manage our attention close few paying price

an Our customers Omicron amazing challenges. during as serving chain even associates job of we faced and and did members season this busy supply

was negatively more calls which teams the during COVID it This XXXX and needed. plan help club and and was in previously than they to store for quarter. I'm our experienced we'd and in anything quarter’s peak our that fill to XXXX. hired We for larger leave associates or gap, clearly management customers members on but expenses, priorities grateful impacted our of set behalf how associates

They're visit our progress navigating delivering is inspiring term I significant strategy. a against growth our it's such As and team making stores how see longer while to clubs, tremendous environment. fluid

in took invested our make $XX to important divestitures, During agreements profit billion services buybacks by acquisitions. two $X.X steps to billion shareholders grew build sales just CapEx the grew dividends, $XX we X%, our excluding to ended advertising key by business capabilities fiscal our globally via share financial and U.S. and business with returned grow to XX%, grew billion net operating to year

like it we're and one Sometimes XXXX, year. just long feels XXXX

If is income, end company of in the XX%. from XX% divestitures, of you fiscal percentage sales our our terms ‘XX, larger growth beginning and at globally to digital excluding through terms since larger the in operating about grew of ‘XX, fiscal of X% of look revenue, XX%

by As the we the new model company year. business grows, flywheel last we're outlined fueled and

running with is life. primary deliver InHome coming earn trip that up delivery and foundational of members to and It's strategy we time. stores strategy Ensuring is It seamless earning with relationship our and Walmart+ our including U.S. I majority basket the my important. by big stock and invest in great The clubs and destination. Our that where shopping our to the We customer is pickup experiences, starts families. a occasion offering for

We're offering this year. We membership building. Walmart+ piece of XX% another we're capacity delivery. last pickup and for to by adding we what important and continues expect increase Our XX% to increased year, by capacity capacity an nearly be

existing be to be of delivery services, emissions our zero The delivery goal million we filled in roles homes an InHome, To this million. support logistics XXXX drivers. these building X experienced up all announced to out of than Walmart expansion, creating delivery vans available recently it we're We'll majority a service electric enable U.S., For the a roles expansion associates. fleet by by will more to fleet and of membership the of associate XXXX. our XX for from about make

news friction healthy and in position of our plans aggressive. customers and of more will Our help brand our flywheel some the have our can out leadership and less operate We of are serve is financial combined the Walmart+ deepening one fintech money, that The the our millions save business. and under shared members and our startup experience broadly, an we and creating with acquisitions JV a relationship to of Finance merchandize them team of impressive, pending forward. about strengthen the for families. Even mix our is going with ONE U.S. Recently, families designed services help and talent for

cross capabilities our services borders. our with advertising As financial financial business, our

which in business Our we an fast us. in is incredibly for and important market growing is PhonePay strong India such have Mexico, capabilities

We look pushing XX,XXX year. opened our the up capabilities We more XXX% fulfillment created sellers SKUs. and to diversify million help our than GMV India, U.S. this from new sellers improve including grow. to our by Many U.S. the marketplace expect experience are looking in and sellers and adding we to the the to our customer delivered XXX now to As and more our year. a our expansion U.S. We're add team business XX,XXX is of add We to more fulfillment nearly marketplace to they're day. last to we're And last up nearly us added sellers their services. expanding grew mix the there strengthen business, by year, important. platform of onboard dedicated services and every

growth this more year robust the We continue as add expect capacity. we will

our For for represented marketplace QX, helps our our services customers, enhances Growing margins. expands total grow our our of marketplace XX% orders fulfillment Mexico. profit choice in and India, in XX% sellers and

Our fulfillment capacity, profitable growth access last plan more mile I'm and and the services to customers Home most local adding Depot It's to of items for the retailers. small marketplace on have help businesses. sellers fulfillment ahead us. new GoLocal, have is to clear delivery for this sizes about year experience includes and But me other of solution businesses Spark retailers. faster. so strengthening of years theme making Staying more fulfillment of all we and for large Walmart Driver launched the reach excited GoLocal scaling platform We a using serving our customers. recently deliveries that

is cost X,XXX. end lower We This by year density. expect the XXXX increasing we good size for for service the and order we clients per to GoLocal have closer the this us nearly order pickup and to and combined customers, our points route as

our billion more As is our expands A ability with only Mexico, advertising those margins advertising grow, great a example and like and bring $X.X years, Globally, rate been Chile. at and places ecosystem, And our we a monetize and relationships. business will few We're and suppliers e-commerce to high we so U.S. our customers, and business. it's now business the the to it in a high learnings continue. business. growing sellers growing to expect into taking as this strong Canada growth marketplace and India including is continues from our

that countries. build be to beginning platforms multiple can we're Importantly, leveraged in tech

because about of intuitive, the that ability and team it's X% like We've see earnings from against growth QX digital as traction algorithm our our our enable at increased these well key transformation real synergies. and wages. make them business one enables There's growth, opportunities make relationship and of We core together, rates operating global to mutually ability growth COVID, strong and us I a advertising, Because power and the we than as the deliver them coming sales. businesses. to last to of easy how in reinforcing. supply time. such we technologists in another highlighted discussed in design year, same BXB Our had connecting the customer costs higher pieces leads and the grow our feel newer about To great flywheels portion to chain income top-line investments

deliver more and are likely and of our we're ability through continue is the the and more the lines. the part and some for I this customers The bottom But more year. business to More of to feel Walmart top on members. we building in And these costs automated, our digital, becoming strength underlying of growth expect. impactful confident diversified

operating by I'll begin a Now Walmart X.X%. They let's sales great our on performance The of with had segment. season. team comp drove move to U.S. holiday

holiday know despite challenges, the for execution and food stores. our looked strength seasonal chain supply and hardlines and good You the about But consumables.

pressures I and stock the is way customers proud improved Building team seamless an of a omni We’re we'll But in of channel to work for our holiday experience overall, I'm continuing challenges. them and convenience the critical. for And stock season. cost navigate through prioritizing for level to course the in delivering year. believe the really

reached XXX% the grew another on stores we're They Sales inventory hybrid. is excluding comps centers. to add the year leveraged driven Last our tobacco, customers rather than stack. the Sam’s count, Membership become year. had continues. some we quarter team in by In versus so the XX.X% Club number many excluding income operating high from digital that's drive on quarter fantastic which orders to strong, operating and have membership record continues income of another fuel The from stores were of and and than competitive hours momentum grew X.X% membership And Our coming Having year, previous XX% stores items two expenses year and They're top during were increased and innovation the and and XX% Sam's U.S. so year. by to nearly XXX% both fuel. a more the a quarter. close days. In advantage. customers capabilities. for before. cases, fulfillment getting

remodels services and with Club Mexico Blue sales are strengthened & strong in had strong delivery another Our growth. we At X.X% divestitures. constant pickup growth drive flywheel. in Walmart Overall excluding of progress led all Bold aspects International, again QX of way. China, and with will year Flipkart the were the and in currency good

points up Billion Days to in holiday Our and record penetration holidays year. is a nearly during New of for serve festivals new quarter XXX from get India Year. XX% Diwali through spectrum e-commerce preparation the to Chinese a basis last Big We and from and

This kiranas During inclusive of mile sellers sellers than growth. marketplace, XXX,XXX, deliveries. last strong first Days, by time XX% making participated and Big Billion on were more the has

grateful few the such acquisition we've And of Foodmaestro remain made of of increase and launch more India. omnichannel business. access aims affordable million and marketplace years an build Flipkart And, telephone operating connectivity value-based great of our that these our of our in of telecommunications our shopping during digital Health had in to leadership health gives Mexico It's investments food customers model to as for personalized and see X affordability customers. to BAIT, Plus members. so great service team I'm expanding Canada incredible online that segments experiences associates. enables strong access time, and enjoy in care include capable the the important. doing While internet areas ecosystem gift examples all A three in to times. our We're to and care, surpassed challenging our our to We've well. couple all and to

business. the in momentum have We

to plans, on the aggressive still It like we're executing have now Brett. it strategy. feels just I'll we're over started. We getting turn and

Brett Biggs

quarter We fourth wrapped great as with and start up Year. Doug. Thanks, momentum we New strong good another the a year

unexpected presented was expenses. our bottom has and expected. we've its last resulted of in some supply couple I'm the chain despite that, rise of each the and one but results navigated Omicron Over of delivered quarter each proud But with on top years, associates. we the impact significant of This no we line The we as faced unique those. fourth challenges, different the how quarter

initiatives last is execute acquisitions, on Sam’s initiatives is We our mile flywheel key accelerating of profit continue club to to delivery. JV few new been The our and fintech outlined strong and vision throughout the we U.S. as Omni fulfill February. business strategic pending other a acceleration and opportunities the of options through launch the like over evident initiatives and growth we income last revenue large next membership the expand and pickup. These represent including years. year data has

had sales increased with of and traffic record to For billion stores the full $XXX clubs. year, we

in $XX and saw While grew consumables. e-commerce more U.S. food market billion penetration by sales approached XX% than share Walmart and gains strong

billion, or and Over the our U.S. income years, XX%. have segments $XX past by by XX%, operating sales two grown

results. QX discuss let's Now

previously the announced reminder, significantly divestitures comparisons. international affect year-over-year a As

today margin versus the with Walmart with billion. divestitures. reflecting by basis gross $XXX healthy reached another expect by gross offset effect to and costs with mix costs. primarily will partially offset business year. X were of Consolidated million benefits and but $XXX higher primarily points, increasing Supply increased grew us in COVID along expected, advertising deleveraged constant price X.X% cost costs sales So rate $XXX management net margin costs over sales growing from mix. some points partially rates my expenses over us abate chain increased important increases basis supply as milestone Total from we XX SG&A a International resulting margin exclude to basis revenue billion higher last due costs lower strong lower comments points gross exceeding overtime. currency format XX rate quarterly than to those of by wage chain were were

combined. pace the the last we lead than in headwind of million. about higher position, capital QX, Despite cost In cash year, due allocate costs growth us $XX.X last and Although the to first expense of and in have more long-term COVID than these this than Free We towards anticipated. coming under significantly versus to costs over lower throughout just repurchases share unexpected We're a associate $XXX increased more just buybacks challenges, to quarters in for $XXX view X%. of the plan year, million presenting year continue X% both higher were income enabling was COVID returns. CapEx with year costs build financial lead our year million adjusted in operating significantly flow than increased down an or over great year, were a value increased $XXX $XX given increased increase billion, primarily EPS U.S. three we shareholder and company. increases. the the but of the billion inventory

morning. XX%, X due consecutive basis In growth addition, annual this ROI in points in just we years XXth dividend primarily operating under increased income. to the increase best level to announced XX the

had than billion grew plus quarter first U.S. each Walmart up the a sales XX% segment. ever its stack. discuss billion. two-year sales X.X%, of sales $XXX with for Comp more let's Now results on quarterly $XXX

grow Health XX% market strong. gains seasonal continue X% E-commerce Wellness, food year, comps Transactions a grocery We categories two-year were increased resulting high-single & were up while more X% share stack. also apparel, strong grew as in against than and last despite automotive COVID sales pressures. to digits,

having cost of levels see wider continue than inflation pricing gaps taken steps We elevated prudent slightly to and manage to pre-pandemic. while have price

while good price with market of a shareholders both growing have and in customers We balance share managing mind.

ahead. strong new Walmart our large newer in progress make to pipeline margin experienced growth advertisers strong sales with initiatives. and Connect of this growth advertising some a higher robust continue opportunities We year of

of from more year-over-year. about using number In than advertisers double And sales ad XXX% of Walmart grew channels QX, the more Connect half fact, last the than active came automated in year.

a number WFS items continue fulfillment as to few available We top-XX business Connect marketplace the plans expect double past become eCommerce midterm. Walmart have over and next to services years new of at a for we've years introduce to Growing been the scale the for capacity, couple sellers the invested ad of to over in expand customers. priority with

In fact, home by year. the e-commerce XXX more Walmart's have and increase sellers to in pre-pandemic we has of in quarter in also of million Customers delivery WFS bringing items expect the had end assortment delivery, a key marketplace. we been increasingly to over expansion our unlock The fold a six fourth want levels. the in versus

year-end. million of XX by capabilities, announcing continue We in-home acceleration expanding households the including to delivery

more announced business fintech fintech lower partially year-over-year. strong COVID also wage Finance growth January, income were higher earlier, mentioned as increased offset new acquisitions Even. and I SG&A in in as strong much China, pleased Mexico inventory to in holiday with gains more by growth users. of other faster good costs top expenses than Sam's as pending basis in income. according Comp omni active and events two-year ONE lower platforms quarter, sales We strong costs Flipkart improve with operating continued XX by as and to income higher X% market costs, and XXX% PhonePe on a and China the $XXX comps the in sales ANTAD. in stack. solid than membership more year related last offset from growth constant our another well were TPV also Still, deleveraged and grew of of events, in trends favorable with Sam's by customers with increased aided X%, Clubs in position than reflecting on XX% sales sales monthly than sales Inventory sales X.X%, decrease current points mix and ONE grew by We're well sales. by had currency leave the stack. a more nearly to with slightly, including margin by sales with two-year cost currency as higher contributed constant nearly shipments, aided shopping as COVID-related and growth International led strong total about in-store constant Mexico of expenses than gross Operating grew nearly continued increased transit e-commerce margins goods expected. last comps XX% run-rate due adjusted Canada, to up a growth and strength increased inflation, penetration as higher-than-normal In XX%, were currency COVID XX% of in-stock. comp partly International China and and than year eCommerce. nearly strong, were good of seasonal on efforts increased results. billion. increased strong rate versus reflecting from up XX% XX% led Flipkart in to overall, of eCommerce XX%

during and pressure income supply in from higher gross on margin fuel orders a and increased up Operating an the full of members. strong as income Sam's strong the Club excluding clubs was adjusted the with X.X%. our another the record convenience increase Membership counts For year, Transactions head expense we mile up digital operating X% leverage to and was about stack. eCommerce as to grew up chain sales had confident quarter. And member of more and well two-year fuel inflation Year. New were costs. XX.X%, and penetration. offset XX% International as up to nearly membership capabilities XX% rollout XX.X%. tobacco, by partially with nearly into income XX%, X% and business feel Plus as another GoLocal Sam's delivery more of all is impressive than we provide grew service expanded comps leveraging Walmart's ticket last international income delivery quarter we was

that We year. in of we deliver good last the turn underlying can 'XX believe strength full growth algorithm discussed with to and feel the the aligns business Now growth FY year very let's guidance. about we

in As disruptions. costs chain you increased COVID challenged QX, we're related with saw to still supply and

primarily FY progresses economic year. guidance and comparisons we will unique, of relief generally position remains international stimulus U.S. some in as the against see Our in due assumes 'XX. The U.S. that the favorable throughout the timing year that from year to that consumer a last is the and divestitures

UK a the end the quarter of and Japan in FY last the were EPS about reminder, QX, and year, in near of in billion of $X.XX divestitures our $X completed about As the 'XX. contributing businesses first sales

be will ex-divestitures. guidance Our

above expect We with for X% to about total sales X% sales the U.S. comp slightly Walmart company year. increase

stimulus sales first increase followed comp Given sales the we in from growth expect X% higher overlaps, the Walmart X% year. timing comp remainder of of by a U.S. somewhat about the quarter, throughout the to

to than investments part income in expect to We X% rate a FY EPS and grow 'XX to growth aggressive versus last share operating sales slightly to quite growth profit program. XXXX. X% our as lapping adjusted wage 'XX EPS year's February variable increase FY due total and company quarterly at higher stimulus cadence September to is to as well repurchase The due expected U.S. in be initiated

you a of As viewed expect, extreme stack. less looks variability the when two-year quarters the on would

income still moderation year-over-year mid-single to this income expected and We nearly last be expect QX QX operating up as operating a operating at a ease growth, to increase to would mid-teens stimulus as in year EPS as percentage. wages low-double digits two-year to down last year. of income the stimulus low that and part QX increased due QX and benefits to the resulted in EPS stack, rates comparisons cycle we On from digit are be XX% effects operating low-teens as year. well income

rates costs EPS percentage. expect versus FY resulting of half wage as QX particularly in higher income benefit leave fully back 'XX. a quarter will from the high-teens operating elevated investments some international year, increasing in as cycling COVID in in growth FY timing by We fourth well cycle and also income we the as 'XX, operating

mix. earnings expected Our XX% primarily tax effective XX% is to increase due to to rate to

rates new we pricing, expect mix due increase to business gross and initiatives. For the to year, margin

is case. Although variability be quarter-to-quarter will as there usually the

accelerated being expect I'm expense by costs. continue $XX.X capital chain a enhance in tech on see billion, continued was we time investment chain wage timing deleveraging focused projects than and due elevated first and challenges. we the about impacted automation to of lower as to some productivity. investment For fulfillment supply journey continue multiyear of while, We'll supply to technology that increasing to anticipated FY 'XX CapEx Due capacity, the and priorities, of company future. very I'm closing, this at an pleased and 'XX the guidance upper our really X% is in our enviable CapEx we of also The to strategic year's year the In members year to of this results. shareholders. in last position FY with confident we anticipate serve end gave sales. to look achieve the I customers to goals, and to financial benefiting as X.X% and

be happy your to we'd Now take questions.

Operator

this At is with session. question. you. Wissink with Instructions] be Please you. question-and-answer a Thank first [Operator our Steph conducting time, we’ll now Thank And from your question Jefferies. proceed

Steph Wissink

made your Thank versus widened Can quarters the you your I'd you what price how are on the like those sense inflation. of to have gaps real are of of one you. seeing double-click expectations wider that maybe And signaled us much slightly then pre-pandemic. price regarding as elevated you give I and comments for levels some you everyone. Good progresses. remarks observing think morning, the How inflation much gaps you're year time? in

John Furner

with Steph. Walmart morning. This is Hey, Good U.S. John

both stores. and customers monitoring competitors. we're years. of continue a share, long-term We're through for first, our seeing to do the our just on constantly we to we shareholders. And as increase want I had really that opportunity the proud pricing then right the we for been of the seeing but thank for in at QX When this. And take want team. pricing, of all only are end move really to in teams customers, gaps the rollbacks proud view And to also $XXX comes valuable of the appreciate they the have. price sales our couple are challenges to just everything about that our we're we're we're last has the I And impressive, We're we delivered given of it the number quarter, billion that not last been Now, now last team the to rollbacks what gaps our And year. manage now they've we'll number seeing is of some that same forward.

So pricing while nice chain costs and our and shareholders. doing looking have are supply both the teams coming and and after managing challenges a other customers we our mix through, job

Operator

Next Bob the question Securities. Drbul of Guggenheim line with comes from

Bob Drbul

Hi, good morning.

questions. couple Just quick a of

experienced to first many one And you the up piece. Walmart+ the number, you've us Can And the for elaborate to you willing would you that get just number? thanks have for do how just The on really, more us ramp? growth fact expect you $X a just the billion how the given giving bit advertising to quickly the little membership $X that give gave be signed Doug, people us billion to that

Doug Mcmillon

The Bob, advertising and got here. model I'll can surprise one John That business and you me. want doesn't is the add both. you start with number, changing.

gives advertising and us business, The the a first is growing it's and business It grown And low operating keep to have helpful. going is grow that's help the income. the fast across us that us markets They think income other to important I India, eCommerce percentage. in number. party, they customers the rate, the opportunity third party headline. and We've got growing. a deliver help for that's markets. growth are becoming at too. digital, number U.S. Mexico But prices margins It's increasingly there, are

So There as want the with Walmart+ really Everybody share advertising growth playing be helps to see our helps we're look a our And where world, across and out. the across grows eCommerce are about we've to business yet. times are periods at always the some Walmart other that. Sam's focused seen data. such how some going number. subscriptions other grow not of don't businesses excited I metric. us when like And customers you growing. one defined the what the gets going is during topic days. to to types the business and it point, relates being going We're eCommerce have time. not us is be looks And to these about certain And Walmart+ of on just deepen need is to company we'll memberships, It a important. the way, with are business. omnichannel by attractive future that than by that of It but business. the in more of stores. Club stores are too, probably as relationship recently, faster talk there have in really

there type a to an get we're time don't good number metrics if of eye Walmart+. keep So would I I that think be want probably on. overly it be membership focused But you'll going think will to on over

has why serve improved to ability as made the you one delivery and we capacity of reasons pickup continue growing people that. to much we're Our how with do to It's investments. tell we've these

John Furner

Yeah, of And John. couple things. this Bob, then a is

I think I'm them, in named we in Walmart have be us home, really in is curb that the help platform. whether way opportunity on is And to total any the Walmart customers or And at the an their grow the retail for and a reason Connect way and suppliers has advertising of in business, served, a reflection to to the their business the of want we buyers, customers specifically and connecting position in First, to they do customers. it a it proud serve omni team have sellers way be And a we're Connect, refrigerator, way suppliers sellers, that's door, front at unique the positioned business that's of store. top we effective is able momentum helped reach the U.S. at

our our excited transact base. to store Services. sellers customers. Those can about large seller to able the more in I'm the is and the enable key with growth, supplier advertising reach Fulfillment and And that customer that's really the about growth Walmart additions excited be the to capacity certainly, base So in have of frequently

Operator

Thank you.

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

Karen Short

much. very Thanks Hi.

question. Doug, a you wanted to So I ask

the the respect You've past made plane knowing but destination. you land analogy where to the when to in getting with and to are moving plane, the parts there to want

landing? the could ask think So where the plane. about source you'd calendar I where wanted also upside you risk put the on when you 'XX, And well think 'XX biggest specifically then to be picture to just sources biggest bigger of of landing

Doug Mcmillon

Karen. Thanks,

we side will at an I been over risk on good good sources lot lap a as managers. we've or the of unusual cost think have last on Walmart. stimulus, what be year us to as think the side I of both It's managers of that to happens operating biggest demonstrated inflation, with well cause goods time have really external. the two are But

In India what's is strength terms Sam's lot and excited stores exciting. Walmex There's a be momentum in from good. upside, Sam's. in is strength international. China got We've about of really of continues excited to about kind our going to business great I'm happening be in in to clubs.

can think International So And Walmart U.S. then in here contribute. Sam's side, I John, jump the you that can too.

way that we've exciting now I think the and is And encouraging. both an opportunity to really to got up services. eCommerce. customers XXX continue improve to fact is stores and the we're sellers seller responding items And are that and to million for relationship fulfillment

component we're think that marketplace those that of building I last growth, out. mile is one So we see where including areas can

too. exciting that's think I

John Furner

the momentum how an of just just year, mentioned being the Karen for one, that customers, will help it's country. components and things way the model all really shareholders the quite have addition ago, and in excited customers the these out many help across business. Walmart and could growth just I'm also proud us all offer businesses that to customers GoLocal, about Mile, too help the model, time. the algorithm And a value But reach to about. Add we Doug of so position Brett that operating the shape last And excited all business help model retailer. changing. the an these and they'll impact and they sellers, services omni they'll referenced including And the which Marketplace, positioning Fulfillment way Last laid early the that the change on over business are number second

about points GoLocal, So today. talked of we we at That's expanding. have that number the

is electric Our have years. expanding. the Last Mile over We'll online fleet a coming of business couple vehicles of next

ready clear. ability We've lot the a take a got out team in on also just friction I'm next then fundamentals We’ve are to customers' whatever lives, experience excited is strategy stay going of stock lot see. that really year. this. over great the the them of that very doing about for manage got of improvement at forces through help lot to And this. is And external we home. there’s a our So in with going that

Operator

line your next comes The proceed from with Gutman Morgan with Please question Simeon the of Stanley. question.

Simeon Gutman

is QX Brett you but And change is given than it's it any within mentioned SG&A 'XX Hey, In the hefty you you're big some 'XX. better seems a there Is the to good international alternative? like being growth guided. ends about If of for 'XX, be or And to by could it driven what your some clarify, EBIT guidance. guidance, margin sales you on a fiscal the Is something question little My everyone. guidance does and jump, there it laps. lapping chance because morning, in the beat a just perform better can your comp going up amounts. -- it way by both unpack you growth. just three then EBIT said healthy

sounds, to So as look steep maybe the I think, if just not it some of it's try as pieces. at -- we

Brett Biggs

off. Simeon. Brett. kick I'll Hey, It's

laid I think Doug I the better there is what to -- than out what and year think John we've of we've a for just talked of and done just end lot we of lot get if it's guidance, were about. if this a they said

we've That's sales We continue is new of on growth. Our continue higher done. X% to big with number this that are to businesses top Sales a obviously momentum what assume, margin already grow. going continues. a

that can we we helps given business be which many play stronger, to. different talked and actually all all our we So that gets it levers about levers to also with as as general And can mix. year times can margin so new any time. could develop those given it pull at things. advantage be It's at continue businesses those of It's when driven any always merchandize need sales as driven, there's these to in well our

some good this I this I'm shape said model. ever there's a -- about I've about feel the as the business. of momentum the the couple There's the international. timing holiday of and specifically, business just answer I been business in So To as things. QX morning, I'm of optimistic as

We change. this happens When do operating look big things also And that's over but that the expect adjusted impairments income. of happens, seen. it’s those that quarter, we and help is that obviously QuarterX QX, some costs at that some the be the how to abatement of also those was costs that you But year. chain some had costs impacts things, in out. When But some of the supply COVID it's cost.

Operator

you. Thank

Our with comes next the Lasser with your Please from question proceed line Michael of UBS. question.

Michael Lasser

Thanks a lot for morning. question. my Good taking

inflation of the this outlook Your customer base given is consumer. a looks consumer for consumer. the the you were There year U.S. lot factor ahead? algorithm away and all less of did uncertainties. How divestitures. your excluding other in planning have you the that lap, low concern The to the mid-income a year, like around to You than probably guiding something with lot overall gotten stimulus as that could

as good. you the doesn't across So snarky, the There's is visibility where bias than a you was a there investment lot uncertainty now. into January but of right or others? the come hopefully, have have risk just out that this you recently think in do more And macro community a there business

Doug Mcmillon

I'll Michael, this Doug. is first. go

was and made the year overtime. a periods that greater was and told shared deliver we told there that X we going are And ago As time X, higher because as you, that, Brett be periods pieces that repeat But about. to we those to when are And really is can that of numbers, than that's believe overtime, confidence business we've it that life, time to have you something to is we relates to lower. model we that we are what been and numbers beat commitment have we that or talking share. coming strategy changing. think that the is because sound of a the And we still thought it The important set confidence. all

and to because believe relates of improve this -- And to know got We different year just opportunities we what sure. these we've COVID results. was the in it there important make leave. for that opportunities just in-stock, And As There's But to improve there's be we store definitely it will the we've upside. that opportunities to challenges. to choices particular, happened standards to with got club number. repeat deliver have

John Furner

Something said important that about is Doug improvement. really

just to for saw in last I've as in is, One better large But groups working income and of almost the question we one having your and fun than that Walmart really day and important groups team things XX up at across really a be growth And enjoyed most geographies we the try every of all income serve get is such they've U.S. the a parts all amongst years. of business. and year, geographies. been run that's better

through households of including pickup I will we to choices So to the this in-store a in significant think up that's Walmart.com offer We expand between, everything households experiences, offer delivery, XX customers. and of number home clear just which reflection offer year. about million We and of customers a number offer e-commerce. experience that customers we

So exactly the execution for would this be I year, for execution. same And And and I thing, on we're think represented. focused our know forward. the fight really we're say important great geographies really across well ability going deliver the income, to team the year. to customers to serve all going across Sam's we'll is quite all hard across but

Doug Mcmillon

U.S. the that And Michael, really you Walmart saying started population, looks and degree. like customer a the does U.S. large to by it

inflation during we'll our And middle so periods And even families, everybody. wealthier families, income And price to families that's this, income middle sensitive. serve of become like lower advantage. more

that has U.S. the inflation And times and just all now than been through we looks to kind right in we’ve like. with for what other time. places So sure, in been a dealing before. Inflation world it is inflation in and South we've this understand recent around and the run the but different with environment Mexico been of America

Operator

is Our question. of Kate with proceed the Sachs. from question Please your next Goldman line McShane with

Kate McShane

Thanks taking morning. question. good Hi, our for

supply chain improving 'XX. you the improvements how in-stocks We you the up mentioned you And how in you the ended benefit how what and still had and QX would from rest view could categorize just sequential any level throughout of about year. wondering improved the and inventory. throughout cadence of challenges were talk made supply can from You areas an in-stock the

John Furner

This Kate. is morning, Good John.

Let to talk come I'll back chain. about and supply then QX, me the

resulted late and our deliver seeing saw. QX, and QX. season in out, how ability right including January, general, demand, business you throughout out effects with in-store what seasonal hard But step in -- with stood which apparel Health in-stock were the that I a is holiday due seeing think those we quarter. across to and nice the line. of flow resulted were to the the Those were the throughs. now in of business in strengths Omicron early in-stock supply through happy We're really quarter improvements pretty we're the better couple lines all & the in really And the Wellness both took in turned back we sell strong then A decent across chain.

heard a inventory, the increase what inbound. You large in reflection of is

of we lead and see two sell ports, thirds moved the getting stocks the in pretty store But There just national And a well. far containers see is are changing were States. that So significant is growth as about into it at There some country of of see improvements reminder, we in those supply issues. the categories helped. manufactured couple about QX. we in chain, you'll recovery the through across all in quick. what categories times, some And really assembled a we as talked out that's as are or that flow here United

get I position So see next we’ll into think we first into much a months few in the good quarters. really the and and second and flow us lean weeks as

Operator

from your is with Please proceed next of you. Haskett. Chuck Thank with question line Grom The Gordon question. the

Chuck Grom

I light off lap in on seeing career wonderful noticeable any is I'm inflation, of a at Hey, good My if And the Walmart. again. stimulus. guess question patterns Brett and Congrats of year you're on a spending on hats morning. curious income great the in cohorts by a changes consumer

just being level. January you basis, by little about income if unpack talked You a but best on the it a bit two-year wondering could

John Furner

Brett I echo Chuck. a mentioning Thanks also is on John. for that. This career. congrats to Hey, great

Doug Mcmillon

yet. He's not done

Brett Biggs

I'm chill on that.

John Furner

about income brand penetration a We brand, things. the like point. really a made couple we has broadly, of strong see groups. do serve he really versus definitely And Chuck, We nice see a Private brand don't see flat. serve But we ability country second is said things to this the impact. all private ago, demand. we

really So with see demand strong strong shape this we the customer balance who's point, a good at sheet. and in

transit So to will into we're that as done this have the in and optimistic to pull-throughs inventory get great we in position have us get that year. customers fiscal able we serve be

Brett Biggs

Chuck. sentiment, the Appreciate Thanks it. for

Operator

Thank you.

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

Kelly Bania

my morning. question. Brett. for congratulations good I'll add taking And our to Hi, Thanks you,

there not Just you two questions. But this are maybe results XXXX. quarter ask. growth into One, about could to that's I guess, tried question, in whether been concerns the or against some similar strong algorithm earnings going kind maintain of

factors you And base. grow underlying help on so that maybe you higher can this us to the enable understand just

bit profitability? that and what we about talk Is the about this underlying the anymore, I little think are do level don't eCommerce maintain helped it just growth? a but of talked you just same way in advertising underlying know drivers progress You you Connect business. those there

Doug Mcmillon

Okay. Kelly, to answer all that. want we

number, the just the you changing gross statement is when is income the more shape. And automated I we will become So starting kind to become overtime even can is And It that are at digital. the the think it. and headlines model, of automated. business company more becoming manage look more margin

margin of watch some sense quarter-to-quarter. to gross guess you as, Now I makes like

track us was can -- yesterday, crazy record. margin. at I mean, our doing Gross As gross can We drive manage that. you margin reminding yourself look overtime Brett

get in larger Now shape high. not productivity an And confidence businesses but center the our mile itself. the whether store to like of an in U.S. got total, percent a then we've the as an fulfillment view. a around robotics point we That the in eCommerce, app a business, And services helpful business, the businesses operate floor And distribution opportunities And last the gross are in in world of from delivery only productivity or associate the of advertising these sales is for other technology, below for become and helpful. statement marketplace creates opportunity it's margin, is overtime. then you changes. income the margin on they a for the in that, markets these

And go next? why Brett, confidence you us. so that from sense you that's to want do

Brett Biggs

address said John, You do well. you want it to that?

John Furner

of I'll there. add couple And just a things

relationships and stores having as as said fulfill customers from act is more, More First, digital we centers, with also our -- but earlier. to stores we so they stores important. fulfillment

with to ability digitally is this So customers important. interact

becoming digital. Our more workforce is

I'll value a we've ability of years. seen We're proud had have can and in close right finally, lot that's at saying really in-stock place. in million of just leave, couple the hands a a time. from And reiterate device to right chain things don't walk to room mentioned We the our time their we added, is And the optimism lot on are they time got our spend in what things the improve year just the we've have saving want a spend until like associates availability. they and minute in-stock the You automation them position and then supply using this of customer and the automation by and last and I'll as they the Doug doing much done to over the is associates that who so that so that inventory over growth. improvements got could augment more we time had know

there upside the on that top optimistic really I'm So is line.

Doug Mcmillon

as of marketplace years. a marketplace manage growth e-commerce. last standalone the can And the with apparel vertical. in helps. contribution as there We're mentioned and million And been number. couple we've You $XXX important, e-commerce over then faster, and are continuing has The seen you profit home to the business scaling see

Operator

comes proceed Our your Company. Oliver from Please Chen next & with question question. line of with the Cowen

Oliver Chen

Hi. you. Thank

ecosystem, what a as experiences, in really particularly on we fintech difficulty] consumers about are shopping Regarding you And spoke [technical few future Walmart your remarks, prepared see your investment thoughts the times.

from strategy of shopping how that be care. as and great health to as So hear the it you integrates would well your broader consumerization experience,

different Thank in across You're a of great you. communities. provider care health ways

Doug Mcmillon

voice breaking was lot we think But it. we bit. a a got covered there, your and up you Oliver,

things really On so imagine. mean shopping, there that we the are exciting. many future I can it's of

business this John, key, on serve take they future And other up relates people a in working in stitch reality items transacting, and impulse part happens of the jump as been challenges we've future. keeping as pickup in if think got, so which business years is happening and is obviously, that This mentioned the has world setting about and that health in John, financial we data buy care, on and just should from exciting experience think part it. app in cost to as will But future. AR forms. we've our Delivery thinking terrific it stitching delivery whether trying strength don't make business, it health what Walmart One is of that's growing towards that use together for well transact that. the default think items and with The really you our becomes can stores, priorities friction have obviously or Not stock I think shopping and out social that of in that's to And clear. a about leads we world. wearables and the my do really to just point be magic way that's of can The care. about too with one And around We InHome really we on not that our many I as and checkouts even view, as customers, much. buying this and digital for then great delightful other more it's to will great changed do unattended U.S. now. mean all you I for that fintech in too. time of they and together that become and mixed is it the fintech services of a we're and us. be shopping, commerce the future remarks, the the to around

John Furner

the it was to we question the going But help of fastest-growing excited consumer, On of get these those there. the historically all delivery. number consumer, believe it's & the are underserved Because or on weekend. there. depending as for big some week the they right But the can looking way the things which need we Doug comes you segment, and a in And to that business that we may offer which ways flywheel way of to financial consumer start our see segment, our the two I just in customers, couple because important considerable I'll that something on you kids’ day. in the see a regulatory about away, potential acquisitions very our Oliver, this need digital. And Wellness, affordable work is when And with One, hours the of hour to we're QX. on access of can then changes really that might with we're the have pickup business just are fintech, solutions that's the day and fits things modern services. Yeah. in and consumers to may customers, we have of the comp we or thought Health it a in fintech under role birthday for including those. express health And do care, innovative specifically and They of reasons. health party excited financial all a exciting. sometimes in in for customers income Consumers on can need financial mentioned pending middle in there that's the days, ability products. a order have approval. we past,

be excited to are pharmacy. to serve about continuing customers the We able at

And Our and last pharmacists really pharmacists their a at customers we're help of for and top live like addition customers. with telehealth and our better. techs tremendous pharmacy in services, other seeing our to the have and tech year of practice this ability the company licenses job the done things serving

to of all the health retail, these services and So through this really to financial together, really money in they live all customers position better its of wellness you do do company combination and live the so help opportunities that’s well. put And that purpose. can

Operator

from proceed is with question with next line Please the Ben of Our question. Stephens. your Bienvenu

Ben Bienvenu

a been a one. so lot of There's asked, want Good I Thanks. great more questions to ask specific morning.

You to Or you because for those inflation I'm that mentioned because curious, I there see you roll in prices. the places see opportunity less change And some a where a idea, in back consumer? it that places behavior, are suspect is that categories? opportunity categories, whether resonate is really you're it's with for seeing you the within trading consumer or to all? down unique not.

John Furner

John. It's for Thanks Ben. Hey, question. the

this merchants rising customer offer parts At On customers a value find inflation what do. we And is about the all see able sure time making of many in and when do. that is so what being value. the the are rollback, continue. our will economy, prices to It's

the and from to quarter As counter where today first last of about I rollbacks quarter said earlier, pretty end the at up is year. the it significantly the the end was of third

the in got matter street early about rollbacks parts become And the was dry more morning, as -- customers and they and those say consumer inflationary pressures. grocery. across we've really values concerned think just So of I and I store was I'd in this more electronics

customers continue deliver every an sure to everyday shareholders that operate. get as as each this retailer. categories in into we'll we great be key for we’ll values we that platform. see make So But price year. offer to low day to want price our That’s gaps We well with value and

Operator

proceed question. you. the Ciccarelli line Thank from Truist. is Scot of with The with question next your Please

Scot Ciccarelli

of question. a guess I follow-up bit everyone. morning, that on Good a

you are can't way Or higher prices you kind to almost the just of response? because gaps, any price costs yourself find hold other do companies procurement competitive you you can? down prices hold you're despite against guys As competing seeing drive down

Doug Mcmillon

Scot, reason Good. to are relative it's a inflationary position for all because having and our fluid an we prices about Around leadership this. the world, this. more like retailers And manage gaps, environment price price talk in are

paying the trust for a have and things family think mix about from view. attention then lower the staples that like point of some more categories. income price to opening that. at of points as have of our earning protecting for And do them time to John We spend We they a across mentioned, their are some we reality need down prices So things coming or only customers a period not the places, this. we us there use to rollbacks to want about and emotion communicate but of being during perception like we time of

I that. we're unique having to through So that work wouldn't say in

to But bit them between with and the talent be it of the we and relationships help communication try through longstanding course, experience situation is. them supplier and are and way high. of have particularly team The to that as always a we high likely with get is It's the we now. of our the able us Of everybody suppliers manage to unique amount depth and work right well. our

John Furner

are It is that things page change top past. features. page they they on the on -- categories, They do in last merchant We've overtime mix team manage that, just section we this. change who And position this can There do mix the that so people to things got number do it this. experienced I what we a can they to a have home can a many our into the puts the at modes, good know to change said refer how is feature can in inflation and home common, they inside levers rollbacks. A that's here so between business. year have of been markets U.S. expertise that is the really that to this just morning in to many associates in has the here of worked quite have other where helpful

Operator

Thank you.

from with Please with your the of Christopher Horvers proceed line Our next question JPMorgan. is question.

Christopher Horvers

have the at questions shot everybody. take to prior. been that morning, Good Thanks. wanted asked of some a comp I

X the That quarter, XQ about the fourth and in talked sort roughly first You in accelerate X% X% in X% in the U.S. would of you and suggest XQ. quarter.

be going elevated food-at-home benefits. is inflation, my question SAP I some So guess of peak again sort you'll

of that out accelerate and in in how of fill customer want that, accelerated So Do sort as to -- growth some embedded getting value? base is share into any then I merchandize get there gains to like to more of your you thinking you're assortment general out And occur seeks is grocery expect about as you expect fulfillment deflation the options? in sort there? the

John Furner

customer include consumables. couple a include reflection with definitely the on positions in of believe things talked a the We better does a we that and a Add demand. in better food considerable in strong way, in-stock They of Christopher. being are would up lot general amount transit be But -- about has total Hey, the A XX% which of question. the phasing that say is regarding also that, merchandize. what inventory inventory positions. in of include forecast

phasing the the stimulus has in that year the had quarterly storm lapping in, months in and we of we Texas. March And had Now was month we're a April, year. also of the In then significant. large ice last stimulus last

So it anything. does reflect else unless have I the that you anything add Brett, think don't that. I'd across quarters. And to

Brett Biggs

more against. Chris, that we John total make we there's challenging given to the I during the No, phasing imagine, can given good number year we're stack I'd the we've up you as be for as it comparisons is you will there's the as a us said, think, where during the we say, feel can than in different that some quarterly up year. quarterly variability things certainly think like the today normal just But quarters. But year. going as confident And feel and of

Operator

Thank you.

We turn have of end Doug session. reached the for now call McMillon question-and-answer closing over remarks. the to I'll the

Doug Mcmillon

your as for just to again and in we start summarize this momentum it's attention. time saying three have by I'd all year. segments great Thanks

in while earnings at are business members centers delivery, thing grow it's having The that. business the helpful up, they these great changes member it. and that of in And fulfillment benefit customers company changing time. and and that customer, the and think them to the things that our model line to is served it want the to doing same about pick to business, as relates the benefit we’re serve and can way it the is it all clear enables designing be way to we’re grow building a marketplace, and bottom and eCommerce that stores I those the we're and

you, all. about momentum So to the and I’m forward excited year. looking short-term the Thank

Operator

Thank you. today's concludes This conference.

disconnect your may you lines at time. for this You Thank your participation.

Walmart (WMT) 17 Feb 222022 Q4 Earnings call transcript