- Earnings call transcript Q3 2023

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Operator

Greetings. Welcome to Walmart's Fiscal Year 2023 Third Quarter Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded. conference Steph the President, Senior turn Relations. Investor now over Wissink, to Vice I'll begin. may you Steph,

Steph Wissink

Doug Thank Walmart's executive McLay, discuss Judith Walmart Welcome In David Officer; the and joined McMillon, you. President John CEO moments, to President Rainey, John McKenna, by call. session. XXXX Walmart's and and members I'm Executive a and earnings Club. Furner, be of Sam's business results. International; provide Kath Vice of of will question-and-answer Chief will CEO; CEO President and on President U.S.; few by our and team, you President third Doug third including and David John quarter Financial update fiscal our followed of That Walmart CEO an quarter and

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

Doug McMillon

results joining discuss quarter. for third and everyone, Good thanks our for to morning, the us

us from hear you'll morning. this what highlight me Let

our customers. line our including around value and resonating our stores with customers to are proposition that on more online in often, We in We U.S. the members business Mexico. less quarter. First, it like grocery segments, the good was delivered us world. us past now this and across with see is top markets the strong in a came shopping higher-income and key and frequently in Customers the results

and as levels balanced next thoughtful remain position being through Second, places expenses ourselves about where we're the category and are others by conservative. and There we're work we'll inventory where year. being more aggressive fourth quarter for and we

we we're scaling naturally advertising and examples. larger related also fundamentals, reinforcing. prioritize services while Third, fulfillment retail and business to newer, our become they connecting capabilities so Marketplace, mutually are

through Days so U.S. to continued great and in club it years. with season Sam's have Mexico, had As quarter relates events top continued momentum way and in the the it line through the third we compound. that quarter, the we from Club and U.S. comp sales in for run for the the did early Kath U.S. double-digit Deals China and Walmex festivals began almost India, our back-to-school the and team growth. Sam's numbers like string those comps of X at in double-digit as a

are we're total a As to strength Transactions e-commerce company, of continues stores, sales clubs and e-commerce. positive, our and climb. in penetration seeing

and fashion, our XX% start digital which already XX%. year, Walmart is total of at company sales a in led that's this now far as a by So International,

cost they're the mind, of for us them customers on before. repeat for the value us earning and save categories, With we're more who business With to are members in focusing we've shopping than too in choosing stubbornly known more customers changes still from made time. frequently and many now to and everyday we're assortment are items the with high responding this

it And selling memberships. of apparel throughout plus experience presentation strong also are Walmart in case saves more priorities, pickup means delivery along For fresh with and U.S., example, executing that delightful to time. create and a a them the Walmart

also is to the that value, people them us with to experience more we want see us capabilities to we the due look of compelling new develop. for As shopping

app experiences introduce we Our newer capabilities. where the are place these a world around

for like members, an a daily to in becomes shopping of app item the with build our customers order part cart, for much it and them, with & when an local it, easily a up they time our can a skip go or pick find more schedule their delivered it's find scan As life have do store. that so line convenient they or

The $X.XX. helping of the and retail year. incredible In up. teams the you head We're U.S. holidays. traditional finding our have we're We're for price dollars mindset. would expect, this most. stretch format Around year. we the of at they've a into navigated last including team families racks with this Thanksgiving we've than experience doing year. than as whole turkeys the items, challenges food It's I'm the making pound. has the to of inventory type We're dog last per $X shopping popular under widened this in grateful gaps at continued meal also to typical going when further relieve a our countries. across hot too, pressure lobster lamb by and Thanksgiving removing our more time so. The on to merchandise XXX the it proud Mexico, customer and and a combo the the need prices how while XX% their points tails basis our As basket ways continue Walmart member lower to as world, our by for prioritize for associates value Bodega nearly families creative same We're by categories year XX% of step customers set everyday members' inflation dollar's better lowering trip of cafe price for Sam's Club, priced how

together, change visits, inspire improve they way the how they me by way business. they're During my the and serve our store and work and they to others ideas club DC contributing embracing

is a costs categories as down through grocery. especially has next Regardless especially with our families for on Looking customers, ahead, on balanced quickly dry so QX the being Inflation by high to income on outlook are in of now. as that QX, from more we cumulative possible most prices prices year. category. year and remain impact approach some we budget-conscious, and of for in those results year Living item rest bringing yet are updated our levels, stubborn and our the and we're focused this price-conscious like our

to sales way So We're into X.X% job people and We're experience helps, things with demand good focused customers, it's morning. priorities. by deliver as broad important We Globally, a quarter, as supply expense that regardless ever also levels to earn are costs, continue for value. doing of share including time John increase item units. made just in will improve inventory of gave We've through technology, position seasonal our guidance and their the chain In-stock is a and to during sustainable to for for replenishable XX% U.S. In value rather good we leverage about control. we We a we we with the brush. Walmart the on a invest expenses. business and doing growth of XX.X% managing delivered and paint David the the trust this our we're We're business. quantities of shareholders. can minute, automation, not it way. the and the costs in our a offer for members ourselves up we're and and segments. active in succeed the progress value positioning and we're working the on details, inventory than across This sell-throughs but to good quarter to and and Strong majority is items including International. position. Inflation line drives management can inventory keep more continue

expect in better to that will and continue We quarter this fourth through progress the shape. end year even the

too have through to and with a inventory and match approach demand. this period XXXX category-by-category XXXX year. merchants merchandise taken unique history categories worked item-by-item, as heavy in inventory in general we an some Our in were chased We've

Given remains more more have normal experienced We're crucial are a choice than was items is a time. seems and uncertainty economic merchants thing make these back lot when We even shorter as our but food the quarters. in to time and on many quantity where especially They've few decisions such like and on be to than normal a talented more merchants. more a higher quantity aggressive can imported. inflation past normal, that consumables, longer-lead sensitive that items accomplished lead thankful so time we're there time

Just hustle. like demonstrated lot and Kath, they've have the Judith John, rest the done, of a good and team judgment of

advertising in from the within the strong in connecting If And ad e-commerce success growth we Our with we've business in and our example it Walmart businesses business. seen in and Connect from growth benefiting e-commerce, them we More on to it's items shape. in return We're and newer how U.S., businesses, and spend our improvements see established and itself, last continued strengths sponsored they're highest our position interactions. for search underscore in mutually helped on spend advertising, the reinforcing. One we design improvements year larger, primarily In customer our over fuels to and growth sellers QX. year. digital for improved is ad by retail flywheel drives this drive all how also business satisfaction. Marketplace, double-click turn, ad continues take the Connect's These scaling growth. made drive GMV especially the

offer globally doing, growth Like We with in we're what also strong for Flipkart unique working to these other. see because continue momentum media create buyers, have businesses and for us Ads something India. we of to much is advertising each

and That's scale In in XXX all advertising more want our help automatically fulfillment fulfillment that customers business in these money believe the Marketplace is XX% sellers omnichannel Many easier them advertising, opportunities shared an U.S., and ad third-party to What fulfillment we U.S. first- together of integration network. We up our even services on can They the also our from offers both want of for in during We're connect Mexico by this demand, we're the Marketplace saves be million e-commerce and leverage that SKUs. and our an faster. the our last-mile use time. stores recently scale results We QX. Canada. also a Marketplace XX% and capabilities centers of in business will number to new businesses with and will in quarter. As to through on that these growing our U.S., self-service see platform. to Walmart.com onto you sellers The members increased starting now and both ramp businesses fashion the compelling seamless that team we're increase unlocks and than the about clubs, scaling drive Mexico in delivery. Marketplace run them. onboarded making and sellers

a for more opens wellness and health opportunities advertising growth unlocks financial and fulfillment services. to runs thread strategy and up retail us in with digital that Our even from opportunities and

short-term shop. challenges approach a long in recognize our the ways times company. And term all need members. build things experience for in navigate these can we our quarter want today customers hedged. the more saying across to near creating even over levers and business and we This they stronger we and for are for for becoming given by flywheel, term things more that We and we're at I'll grow. demonstrates, been in like close have my well-positioned strains good, business, that our we we Walmart again, years with value and interest thank is and you simultaneously. people and want sell our momentum When balanced When on room It's new a in the to resilient. need the growth continued a your is difficult, are are inherently

Our alert. and team everybody. is holidays, Happy focused

David. John Here's

John David

like Thanks, themes Doug comments I'd a mentioned. to us my deliver helping quarter. Doug. customers, thanking on partners and our associates strong start I the by will focus for

First, sales share and gains. our momentum

to Second, we're improve operational chain. and actions supply taking inventory

the making to the further And our for progress lastly, business. alternative our streams of our value year. Third, we're core guidance to connect balance

QX results expense sales due upside expectations our segments. with X to leverage exceeded operating all business across Our

position encouraged is our backdrop challenging consumer impacting remains our inflation remains we're and and the While our the confidence by persistent high, business. macro as in business our

legal charges the related our comparisons. settlement I the important year-over-year opioid results, discuss to it's note framework As affect to

and proposition currency QX pressures. the growth U.S. of comp on resonate adjusted value focus tobacco. sales this comps of sales our revenue with comments Walmart will increases with of to size well Walmex, results. broad constant Total segments fuel strong during International excluding growth omni our continue delivered were as led average results delivered by Club Constant excluding period as consecutive ticket regarding in accelerated strong while inflationary Flipkart customers of XX.X%, X.X% sales items. Walmart sequentially and Sam's up double-digit model currency XX.X% grew Each its with transactions. my X.X% to So business, as XXth in U.S. quarter strong, and

inflation more inflation money consumers remains never everyday tightly, forced fuel frequent of making and toward saving High to prices biasing household consistently spending important been and people high. more Our budgets trade-offs has purpose essentials. have food mid-teens as manage

preserves We profitably. share tougher continue way a gain to so serve customers even our positioned is have periods, to frequency Walmart cycle. manage more do we price and well during gaps this that in gaining pricing market in trip while tools greater to and economic

example, we've with from income. $XXX,XXX grocery continued share to the gain market nearly For across of coming households those demographics, three from gain quarters in share exceeding income annual

to better. baby down improved trade penetration LIFO at lives been final progressing. events more of goods, categories, customers' ease the gross focus our increased in XQ to categories the our Sam's inflation to reflected due and sales in keep The help private last XX.X% level customers' the gross products dog reflects rate on U.S. includes quarter, vendors efforts in Walmart $XXX by situation, targeted This reduce We're this at percentage in system in decline done prices hard proteins, and Days. XXX canceling of million very up inventory categories low Big versus our markdowns was increasing between moderated a better provided This equity decreased and including inventory timing due reflects increased rate opioid charge a and including $X.XX. burden including JD.com inventory the to feel brand payments and in We are International, leverage Flipkart's the the as More the to impacts addressing represents in product QX to framework. quality actions mix that to Billion inventory pleased value impact point continued and losses only with margin improvement end sales unrealized timing effects pricing. of team certain We to due food but adjusted the points. selling, inflation. XX% we a in remediation a year, charge orders sales decrease year-over-year decreased reducing goods' QX business. The U.S. inflation and baking and our the We've the working incremental reflecting about the even headwind on primarily prices. from our about income, of X.X%. COVID markdowns. a make XX period decline included together, sell expenses of administrative aggregate, margin $X.XX Notably, and investments, of of remaining minimize Consolidated currency in August working was points food. Club due points, Notably, what of GAAP than by increased expenses adjusted level the adjusted the half $X.XX in observed a and through improvement higher than due of control EPS versus expense XX and cost basis XX% basis Operating a QX. good to good about of focused majority on In as operating primarily being primarily has expect from really EPS growth higher We job adjusted on year-over-year We're the the down increase year-to-date and including inventory billion general $X.XX difference primarily The sales saw inflation. all related for can income expense offset manage work $XXX and this this leverage ability relates guidance settlement as to and when continue constant $XX.X tightly. was operating to levels and loss to on lower certain cash stronger inventory basis cost. leveraged EPS this quarter GAAP We're partially of million general administrative across and flow XX litigation a outperformed on basis operating we Taking to our EPS in purchases.

share committed $X.X our we billion term. new continuing for investing strong our share utilize through We're quarter, cash shareholders authorization long appropriately that a shareholders the to expect while business and in to the During And to to years. to returns dividend has just over $XX Board still repurchases. billion returned approved repurchase provide several the next we

Let me briefly reference key highlights by segment.

throughout QX. Walmart after XX.X%, consistent For slight Food comp the momentum quarter. encouraged in Monthly mid-teens were sold QX experiencing relatively quarter. last X-year sales accelerated U.S., decline a to food We're basis points gains with from in lead see units of XXX with sales growth. particularly up year-over-year continued to a growth stack sales

to compared XX seen our month-over-month food we're be the heavy but progress inflation end basis on categories continue We've not grocery good the percentage trend. levels represents point at an of mid-teens to reflecting in this Inflation volumes less business a step-up experiencing. remained in also make it's of up levels improving QX. sustainable if We clear in-stock significant, incremental high, despite levels

we However, as attract Gross continued in and expense mix profit with pickup in digits higher leverage to stores, SG&A household strength store rate costs. basis basis reflecting to accelerated General delivered higher even home sales contributing markdowns as Marketplace, points believe positioning and lower team growth, XX declined points, strong fulfillment sequentially primarily to and of and the but customers and transactions experienced we We is from decreased across share XX% grow. electronics, delivery the services headwinds, product apparel. our single advertising. to COVID due gains E-commerce value-seeking XX income softness strong merchandise price low sales spectrum.

was about reported Walmart now X%. in will Each can Canadians. offering and from increased XX% with of to Club. were storage a at performance XX% benefit event, sellers fulfillment currency Big of in continued sales E-commerce of were with growth growth comp on well macro year. customers within contract annualized with a with We quarter than exceptionally monthly had comp International X coming sales customer sales. sales strong Flipkart's sales, cities. in income in was In stores, launched in our XX% orders needs. comp Billion more increased more about And or Marketplace and nearly more China. in had X%. of to sales those sales than and visits X had stack. Flipkart QX constant QX sizes of with in we and a In site Canada XX% results. sales event sales XX%, as XX logistics care by first to Both with increase as perform sales In home. TPV, up constant in volume, excluding Days in grew into us affected to of now better ticket International curbside this and from about on ship PhonePe X-year China, Walmex, importantly, Membership growth E-commerce income negatively billion. income another up operating better-than-expected last XX% strong a provide up our fuel to total and payment basis a the sales overall reaching of Club an strong. and with of $X.X The transactions. October, member from gross primarily delivered X.X%, was led with basis reflecting comp e-commerce U.S., quarter This we level also headwinds. than major with XX.X% X.X% saw Tier and great of a and where penetration. results offset than event also X comp e-commerce than response moved positive up segment of Tier decline by the strong had rate the quarter up grew sales. more billion. we reached reflecting e-commerce. strength Sam's than sales customer basis strong and quarter. well billion and, billion increased despite by XX% inflation-related to Sam's another on sales window X%. forward earlier higher counts, This to an Sam's comp take more average XX% growth delivered to X-day over transactions quarter due during inventory timing strength XX.X%, Canada, at And quarter year constant leveraged great helped services billion faster record to high, over member penetration expected a delivered to digital Currency markets Days shipping X% of a XX expenses Walmart due currency, Bodega million Big India, new Clubs plus result, The XX% in led results, Walmex point or record LIFO currency a of their which $X.X the a Sam's Billion time high $XXX XX in orders all-time points X-day was $XXX strong our all As PhonePe charge. primarily operating a continues profit tobacco, transactions

world, more with quarter, increased XX% and the the fuel with you including Member's an around of see and markets charge. excluding fuel as with Sam's leverage nearly International, my we example. and Mark performing Club operating with results the is LIFO impact pleased can we're comments the these well Combining across income about For see Sam's the X% than

building in our and streams. our our helps families to expands members e-commerce navigate we retail fulfillment larger advance our segments, enabling businesses Across is number we're were strengthens alternative to growth strategic changes the that which and members. Globally, with initiatives our drive scaling engagement e-commerce deeper external we business, value that continue a that of capabilities. to customers omnichannel as strategic our our and we're environment, be and As unlocks by choose Marketplace enabled advertising

are to and Marketplace sellers added QX. in growth in our than more our X,XXX sellers contributing we advertising New U.S.

in this XXX Connect a XX% in than by in diversify XX% advertising quarter, Flipkart the helps build-out Walmart Ads global product Third-party strengthen basis, increasing Strong on led includes and U.S. million our growth digital now and continued over SKUs. India. growth which more assortment,

fulfillment As members to we some sign more the data our serves these of customers focus deliveries ventures in all utilizing Walmart plus improves, of reach XX service million serviced Walmart has states since last The and the already on seek Canada mile coverage we our as January new X sales offering, continues so for base U.S., by points We're Luminate, number with more Driver on has than fulfillment seller Spark all services to ability growing plus the grow. Building last stream ability households. to our continue delivery through Mexico asset progress from important fourfold memberships and pickup Wamart and This our also they and the in over in launching as an the an to in membership, U.S. number Driver XX,XXX now a our delivery leverage gained integrated of been platform data a since Spark after omni capabilities We made our year. revenue expanding Walmart of solution. fulfillment pickup includes to making Walmart growing a good in points automation. offering, businesses XX% increase customers and now platform. GoLocal,

and AI X.X are fulfillment blocks September, Innovation center million supercenters a that expand for more This machine Illinois. only Alert increased to the powerful, putting last faster build-out. our and For we shareholders, building resulting storage, now as mutually customers partners, and fulfilled place And we with better learning orders being In acquired fill service which attached more fulfillment services on using delivery diversified and to productivity times. earnings fulfillment customers Walmart inside a we robotics, ecosystem or example, We're of positioned to are marketplace quickly. year features a also in square our deliver benefits robotics launched foot XX% streams. was in reinforcing week, facility MFCs Walmex' and orders at not almost ago. Walmart opened in use and next-gen but market durable center online automated

continue equipped we macroeconomic where to In we that to environment believe well Turning dollars to in of period guidance. gaining uncertainty, stretch this further. share market their consumers are an need

relative also customers and and supplier work cost navigating inflation We're lower strong real continue to seek improve deliver ways structure our competitors. will gaps cost price and own and for leverage We continue maintain reduce to our partners to to versus advocate with pricing potential. on

With upside maintaining a confidence balanced We're guidance to and persistent our view to the reflect to QX these inflationary and considerations execute. for our Despite cautious our 'XX guidance. given our updating with start general in good ability leaving fiscal our especially approach in categories, merchandise on sales QX consumer in mind, a year we're the incorporating the assumptions QX, and spending, to that profit slow assumes a could guidance consumer in unchanged. food consumables. pressures together

to to and Our accounts guidance action excess promotional flexibility remaining a provides mix pricing environment, compete for reduce in inventory anticipates ongoing pressure.

with to food comp merchandise. sales about X% U.S., For continuing growth outpace and for QX, we X%, consumables growth expect net sales about Walmart including of growth of general

interest income higher a And expect is including a to X%, of adjusted and We EPS year-over-year to expected a to X% X% decrease expenses. within range decrease. increase operating year-over-year X% tax

including For Walmart the we EPS decline to X.X%, adjusted to for comp QX X.X% U.S. basis, operating upside, of we to net of the growth sales about expect to now an sales decline expect full growth X.X% income On X.X% incorporating X% and year, X%.

effect an decline growth and a this EPS adjusted into divestitures income operating X.X% X% a X.X% in to would sales to and X.X% the X%. of of of decline in basis, and net translate Excluding on of

unanticipated of year. inflation the said, planning assumption we're repeat year this costs beyond remains our the next shouldn't we some that Looking That know experienced business with QX, somewhat elevated.

predict to billion as fiscal on current headwind. and FX potential results profit could this and these U.S. Walmart headwind rates, amount. $X likely In our that the to headwind for to year both we year-to-date we this year year. inflation, well as had to for levels and a $X next charges Also, updates gross currency to providing Walmart will inventory year-over-year LIFO in sales roughly committed assumptions, you are this Based addition, headwinds estimate in It's Sam's and report questions. be with million current currency important aggregate next factors LIFO that sales at we've challenging U.S. billion from approximate Based significant that, Club, had results. of of assumptions take additional of year. to happy note LIFO a And Club We're as on we'd we've quarterly year experience we're $XXX ongoing charges year. influence about the Sam's next your charges $X.X billion

Operator

McShane with from [Operator comes the Instructions] Goldman your first question question. And line of Sachs. Kate with proceed our Please

Kate McShane

just inventories. wanted wondered And just you some the describe it on in inventory, how We be for shorter Or in-stocks else? places to to you'd from year. how the QX in it last lead inventories. that also mentioned time much Is focus spring We categories? aggressive would when anywhere can your be versus you remains came

Doug McMillon

X answer go all first? should segments. But that We question across why John, don't you

John Furner

a things inventory. couple Kate, of on Sure.

First, quarter. a here the improving I second of results done really the end the into the nice think third quarter team have supply merchants, from chain teams and job year-on-year

That's over said about up earlier, XX.X%. down XX% quarter. in from just we second As the

of that QX inventory and still in thing when was heavy. see stores part an quarters I the the balanced back the over backlog end the of important in between at of QX, of stores increase supply then this is second the XX.X%, quarter of total, the highest, to the is the chain we what are evenly we problem, think look more but were the quarter, and and year, consider, the majority first The if you extra in

up, to inventory And inflation a the year. is of and pretty dollar and low. quite has from to moved that's when you of in-stock we over rest the XX% it, year, now the last supply approximate balanced in the it improvements can So roughly it's in chain look about store. were significant at the X/X we amount Last

So third pretty really see billion, That's around a consider what we in-stock. QX. just we something significantly, the last recent at will would in down where $X of then on specifically And were end improvement a question, be of under $X your billion excess. probably we around about

just room And we'll couple work center And I a we're was GM and beginning do that. the continue commentary needed progress Apparel inventory. reminder, are our an to we inbound in So categories categories, through really continue orders good quarters in and we on inventory last shape. through at is in continue QX, to his David work week, the mention in said that to improvements. did of we line. making the forecast of the those. a then heavy certain is to and import and in making But are in there The John

the the year. think end done team nice I to job really adjusting of So have the a

Judith McKenna

Yes.

quarter. For International, X.X% just the we're for up

that we're helpful some reduced the there's X underlying the in across around the currency, quarters, shape from quarter-on-quarter the and over last of has markets a world. tailwinds While healthy in all pretty

in through of are each through a a market we encouraged I'm But to go we there because definitely couple pleased on to that being in-stock here good QX. there continue I'm pockets and actually going as season, we really where focus areas course, place holiday light. see an Of this level, we'll And to season. had last from were holiday

Kath McLay

And Yes. XX%. perspective, inventory is Sam's a up our from

your I being that increase question. to think in-stock is of XX% actually

talked and we've Doug growth. as consecutive XX about, had quarters double-digit John David comp So of

in period. great chasing We we're -- in-stock in into last been we're and X.X the a years, in-stock going an into the -- holiday have position finally from for the event

it And did big some of So strong inflation. kind into the going it. rest of Christmas. XX% is best of in-stock, is kind XX% we of

year. our the into really kind we're inventory with of leaning the quality So happy the of of forward and rest

Doug McMillon

would the inventory Doug. and categories. I different inventory we Thanks in point think that question. is this about just Kate, handle for out

don't first this we trying to so replenishable the the course heavy There all be did year is where point are often even because get to that on not don't we aggressively should -- in-stock to to forward, category time. up in were we think the appropriate by That on quarter though we inventory want, wouldn't have. of replenishable into features, to talking more getting lastly, are in we we normal out about inventory some have wish much want it second places in-stock next too inventory goods probably and managing be I year. we're where through play couple then we for didn't down last that. want want to And category some category of conservative. category that always through going us even get and which a items, offense merchandise, of how break let still was That we won't this nonreplenishable and We do quarters far, where the The we circumstance. is number

feeling lot better progress, So a about of we've made it. a lot

Operator

of with Bob question question. is the from with Please line Drbul proceed next your Guggenheim. Our

Bob Drbul

bit expectation. on vendor inventory of couple about mentioned what up A LIFO think the coming product Can is, throughout call? next are the that Can little it your of following costs you think you about the just charge and or assumptions that Just piece inflation the the reducing of on you other we a talk over you And around to sort I this the year? things. about proceed as I as guess, the $X billion quarters reception talk was the side. offsets

Doug McMillon

changing question supplier not really first. we're always the take what I'll we've done.

and That's best down We behave, by we been item job provide relates trying That's suppliers to And it can different in category, current get than are next try others, and prices down, with suppliers we And to about do we're we're members, be as that. are find and welcome always our category head trying to aggressive getting and of we we through anything customers the consistent. not costs some the really to some to way year. item by there's as value more it. going that. creative to to instances, ways

John David

take Sure, of question. John, aspect the This your I'll David. is LIFO Bob.

of as well assumptions heavily inflation upon of and environment LIFO as and in, the our do dependent currency I'd headwinds a next face as say pretty the to result both continuing business that in we're have we we environment. inventory First, difficult LIFO next core charge. is The the a out, macro what the perform called well year. it's But are year, is charge inflationary

assuming we're planning extent that greater the that result basically north inflation an a would that, For X%. of basis purposes, from The a on little prices year-over-year stay And to perspective little than where X%, a are. be it's they environment, reverses $X affects a actually this that note back to out changes, it's extent to important benefit think cost the to estimate. that get periods. billion a But latter as I in that headwind $X that billion deflationary we retail

Operator

with Our Robbie America. your with next question question. from the Ohmes of is Bank proceed Please of line

Robbie Ohmes

Great quarter.

Just questions. actually follow-up. I X One, just a had

have you I mentioned the a to quarter. start strong think, fourth Doug, might

remind mentioned season the of have slower year. you color if that a because of any on seeing kind others to of sort was shopping I The give the [indiscernible] if holiday my can second last from behavior. start curious called all question, maybe was question, which then just And could any grow of you're a that private is -- U.S. at much the Walmart out. capabilities label private here? separate just you label could Could And and us how

Doug McMillon

to to in is As it in strong Doug, some toss I'll David as conservatism. John it we're John. then the start, trying Robbie, relates The said his started, just build this and and to quarter remarks,

would relevant the we're that we've of event here, what that in the and generally. in I fact activity and is strong consumables think range mentioned so food experienced far we expect annual we that is

goes. rest days, it's we'll how quarter the the see just So early of

John Furner

that stores, open talk And me we're necessarily positioned develop e-commerce, pretty delivery, positioned let variety well whatever would merchandise of is and they Walmart for that's differently, but items from that we the a there large about shop of whenever David brand we to brand, customers. this in on that broadly necessarily in like they years than values don't serve not great customers And situation quarter manage private in. we for quality did then prepared customers. the a but they we've want are brands want it things and customers to InHome, whatever all gains be seen in. percentage, they're private of to want, That's one customers brand of our strategies And Customers depending high-end private what have specific into share brand. previous we've private been the customers. over target, private Robbie, they're in that said in last the a do the some John more trade great include year And we year. the is first, come pickup, majority position and important more true between the

want customers with ready quality, we great to brand items. serve great to be So value, private

in we channels be able serve premium to also items. We like and to well e-commerce customers want with And see pickup. that definitely

Operator

with with proceed question the Please Jefferies. next Our from Corey your comes question. Tarlowe of line

Corey Tarlowe

Congratulations quarter. the on strong

Club Judith and first So on Kath. for I a have two-part on Sam's question, International second for

net head attribute mentioned growth unpack believe drove what and were strong further we as how growth driven little that memberships And But you're trend? are can know that then as momentum continued on there's seeing International, how consecutive X sales quarters you into and this maybe close about you on do has Sam's Club, to thinking a XX%. memberships close on years. I to? then secondly, segment you or double-digit Flipkart. continued firstly, could know levels. also you driving So And continues ahead? to there What growth year? up an I success a of in this comp touch that we what company highlighted be the see record consistent this XX you should reaching strong holiday And to be and bit I next uptick you

Judith McKenna

Yes.

across of seen. focus me growth diversification strong of a I'm being starting led to it in us start we the definitely you of few benefits that growth to portfolio Let saw thank the that and last and look of question. we've the here as international did and portfolio. are the And that where are the quarters the work encouraging. benefit seeing profitability Yes, International with we couple the business, to The matters Sales see International over was able across That's last really the that for we for at years. real we XX%. quarter really stories

which That created event called year. for was out again. that the amount have over that shopping to time. looks between first in QX the those into of specifically, called The the event markets last call little kind which Flipkart, of in And results customers some event that. maybe designed billion to bring for differences an them on a and to visits year. It of is that, of is we've doing for For you but customers new the this out. shows try that bit and onboard in Big quarter our of fell QX out. X give color We to A QX, But days QX to traffic Billion the generates you Flipkart. successful X been Days it many

So Flipkart with been we've quarter. our pleased continues the and expectations, to meet

I The out Mexico. market other would is call

on growth strong strong really double-digit not equally ecosystem. is well. there only for saw their really encouraging across growth solutions sales and the They their as building from focus So What's a on customers core up Mexico. but that profit result focus they're their having business,

e-commerce be segment. a telecom I their real e-payment perspective. the helping the only business, And the bites which from is are businesses business. maybe way leads drive proving highlight that International that market other emerging care the powerhouse that into So all business back would the China, health customer to cash the markets, they're connectivity other Across for an

was But we of learning through. also a penetration lot quarter and that saw kind market how we're e-commerce the China those XX% e-commerce for about from a in deal volumes, our to penetration, XX%. brand So of the with and Club Sam's format of is therefore Sam's much innovation is much in well as the that e-commerce and Club in U.S. bringing in private real and a sharing the deliveries great of

the what it capabilities can we will us these too. strong on around at future, ecosystems are think for I build omnichannel how that also is in we making looking drive out sure business, sure mutually and the are reinforcing is core that that world make focus help the that which our

Kath McLay

growth. And you about thank the Sam's for question

And have a culture. all creating heart starts it a with we the at think the that's pretty member-obsessed sitting years. flywheel been simple growth the over last driving X I of

help love. If members you that and but that, do you create can't items services

access If Judith you open the and you take have cost love, the items it but and the channels been member. drive of and of items membership at like create deep just income. that's to quarters driven buy get pass that that prices on is can't as disruptive to you you help in you talked then up members create the if some advantages we've you our to double-digit And can member-obsessed great of back invest And that, comp. funds XX associates the culture. fueling And then this flywheel help been we've about, able

of of over look over as at that, of single see the you our you the -- has think also kind digits high kind can as I membership kind up income X-year well. been period

it's so just really And reinforcing flywheel.

about made Mark, and with Mark you think item for Member's our If actually is our Member's members.

they in launch when and magic So creating part we growth we Member's successful sitting us that's them the with we have love they means launched. before items quarters. end Mark rating a ensure always XX they're the on XX,XXX members counsel members items that launch on items. star that who of market, that successfully to give That's that which minimum X.X up That's and about they're of our

Operator

The from line BMO Kelly question. Markets. Bania Capital your next of question Please with with comes proceed the

Kelly Bania

about a just little the merchandise to talk Walmart business at Wanted U.S. general bit

as that perspective some you out like that market looks us a not do very the contributed did -- that well, Just quarter? were to understand the better promotional you you from were to of the performance how side side quite maybe there? business. could how But think share the continued garden, it the perform automotive, And strong promotional. maybe if played there's and in just categories categories lawn on you're just Because of strategies think and the how or performing leverage on help curious the that traffic the also, grocery activity

John Furner

the they think which Marketplace, quarter. that stores, any sellers. in the up business includes think as that want strong we've about journeys begin. which omnichannel enables traffic where an including positioned is there's specifically, The to. just to our really said us categories that in comes approach, the entire and business a I the The consumables In strong and you have over the which home. look to from number offering shop a other significantly is food positions customers I shopping way lot XX% something online grown the has pickup apparel business items of have with of years, like count important, the delivery last that like come pretty we progress quarter the well to from categories item's last of last been of a really First, forward few on number good also And

reports remaining the one point, others, market share the feel and positive On the position the pretty think would about our gains in in categories of we show you a good through quarter. overall share I mentioned, share

days for gifts. for the be and next There X lot our spending Doug really our a of event in as people a holiday now will months, all well we're that basically there's the between line focused prepare for So end of of lot and XX delivering But customers. earlier mentioned the still expectations. was to with daylight annual go. on first quarter, executing of

So the we holiday we're ready for next really on get December weeks period. focused as few into lead the and

Operator

proceed Our with from is Stanley. line the question. your with of Please next Morgan question Simeon Gutman

Simeon Gutman

Two-part question.

the on third quarter. First,

David, of how other came but your into up other a had lagged, John during the led, Is high that have it better. you was. reserves? there LIFO -- lot seems it some and your timing definitely Why inflation question power. -- with the a of pressure did, has just then next you picked what's grew wondering maybe LIFO price? the conservatively year. You like is Anyway, experienced transactions Inflation why some because is much you talk some Can in 'XX that LIFO. Is Is it -- inventory? Is pricing And hitting of about lagged? up changed? it companies you of you too. it lot it to because of maybe clearing dynamic it's pricing this second And set it had

John David

of out take to I'll in guidance. I stand On performance things think there's XQ, that the relative those pieces. terms Simeon. both Sure, a couple our of

that's the expense the First value remarks, consumers, than more is At been of that ever. the it high proposition time business. in relevant side of this the prepared extreme also which shows our in during inflation same the putting on on time, we there's we period, as our is, an pressure gained focus it talked about share

quarter to so leveraged by you our providing in that points but the focus continuing customers we on the to most we're that in And almost way the see as best basis we can. products efficient XX

would those be Sam's. outperformance. has the areas what that respect related been notable the entirely Sam's With retail a inventory that cost to in the most And will to call RIM, LIFO, out method method. their so I Walmart terms year of million inventory over this uses we've the are average weighted accounting. LIFO for of two experienced $XXX uses charges with

is And we difference charges our Walmart But a persist, that soon given expectation, incurring nuance these so will well. -- slight that results in prices will there there's that will as the think then lag. these that U.S. begin

year. of next of terms of year, it's the the the timing than front-loaded In half back more

Operator

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

Chuck Grom

team. for us. -- less shopping in to bit us more prepared Can often. the you comment Congrats out are to more customers a the Doug, now you that in came us out said frequently that comment your little remarks, past flesh with

the you're California I in rebate in speaking think was frame month just checks if any the there of quarter, it's I'm interesting. with curious the paid then time And particularly curious in out the that to. call-outs October. regionally,

Doug McMillon

to the one, first respond can I'll help. Yes. then John, you and

gain income I us than shopping was frequently, more people to more with it is share customers household what relates this As making with $XXX,XXX referring to.

if would lot Mexico us the may be merchandise their point. increase us at other come market to may sweater. when they because people everybody, which of it you places, Walmart U.S., a sense for just amount got for are general during price, think about to to period would but Walmart or that expect, at buy come at shops and America shares to that A true bananas, not And T-shirt coming would wallet would probably you of categories some or the of makes in lot about really they a sensitive a Tide too, As more of of high in I shops Walmart. some value. people We've a it's time tell

what's that's So happening.

more like in are minute question, pickup leads the I home's that keep which second of as food can to So to can we us is stand period keep and where we they'll one, of and apparel help. things them if fresh tall do we've we delivery you do time, And have But think lot them? quality, save ways back created my in and ago, coming for John have the in store delivery. another this because areas, we time value a think the mentioned I during you some remarks, mentioned and other to we pick a up

So that's do. out what we're to

John Furner

Chuck, right. be to an yes, business has exactly really itself business. omni Yes, the positioned

more shopping We're that people the users, Certainly, plus ready for accelerate that store in more however strength on So I see e-com, time, customers, they talked flexibility how more I of much engagements more And with to think for and pickup, that we're frequently. the also customer often. of shopping customers we've we and repeat speaks we a just more long higher are more income the it's seeing e-commerce stores. customer of about groups, And We when valuable value a what to built. demos, that would more seeing digital shop. app want was.

omni for options the more like real the a as talk year doing you'll across thing, quarter forward, about us are flexible in no feeling strength third We regionally, geographies. an report the Thanksgiving last helpful differences things to is when the going this time same in meal pressure geographies. are and inflation. having last priced and hear the are the of for more customer customers really that many then offer saw which So really at as And

stronger real anything would the say The others. consistency were So in saw region we board, across there's wouldn't one terms quarter. the than formats of being be I standout that throughout and a much that strong

Operator

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

Michael Lasser

I have questions. two

start aiming for At of you're for Doug. prepared bring to prices your you remarks, down Doug, that First consumers. the mentioned

combination handle And prices into for is and that that in year, lot from next the goods you growing is what important that into two a for all how years couple those should will of next inflation actually headwinds given achieving mean LIFO you move of the XXXX of those to year $X that line growth? and Walmart the across parameters think Does Walmart that that's X% How get should top that is $X the we year. provided come going FX that? that the the price-setter to to likely tends some billion X.X% actually recede. to billion to consumer lower And consumer question support see a of for algo prices we down? algorithm. of produce the you'll we growth And see some gross my expect headwind a income it's and pressures to David. Could sales XXXX caused be goods, alternative of between start sub next follow-up such have then about Walmart you're can going lease going John operating of John then David, back year. drag to to pool margin be of profit this XXXX you As in and

Doug McMillon

and The prices. Yes, greater the company that The about the we mind, grow of on numbers think X% income the certainly first time. indicates can came algorithm thing we'll than question our Doug. when Michael, is you that and how over asked percentage approach is are X% this operating that we to the mind

driving we'll well one customers we're Obviously, and as and about about. navigate that top that share. and members factor next be line growing be year, we will thinking thinking As

cost towards I So downward in commodities week, food. And month manage protein categories a margins respond. degree. do, next the things like an that change. the can. categories in think by movement month department, down to to fresh price protecting like And They merchandise category will we'll profitability be categories softens. transportation some change. while have We've we'll started in basically to volatility demand, by leading gap navigating eye as have merchandise as week The like based started year it seen we by but quickly as general department in to already there'll be things moved move to on demand general as And merchandise. general category have guess in some always And much continue we as

I consumables grocery gone be stubborn. change. that have won't up, more rates and and dry will think Wage

you When price are. creative area And categories. up price all costs the it add need and high have where that where the and been suppliers try for we come like best customers gaps. our members. relieving those do That's our to even pressure partner with more gaps our some up, with for we'll more input and we to solutions of watch can We

on you've As price us say income times, our return manage gaps then many where operating of consider to understand the investment. we And to we need to be and heard sales. rest drive pieces the

John David

billion the talked second the when did growth that wasn't algorithm, certain we in headwind. team the of I LIFO that not the FX while about quite Michael, the charge $X or I'm first part contemplate here question, that number with

basis. multiyear now encounter. opportunity the it's think So recognize out our about calling tremendous a have business we over we to as to We're a That's changing have I would away invest more that shouldn't that take because to that moving model, in encourage advertising, retailer fulfillment a we growth the we with business. opportunities like framework we're from that about you think a omnichannel things to going headwind Marketplace, But our in that services. scaled

period. to give growth place. I of about multiyear you all a so things But is lot that, of those conviction algorithm that And would that in well think us encourage a over

Michael Lasser

quarters, headwind the quarters you're today? on know two you that $X next clarify If the or gross please? billion I based from you LIFO margin the one, twoX expecting does in to in, Could everything that three let's say, it subsequent back would three that get mean or

John David

everyday we've of just But don't want of deflationary quarters been it think I That's way specific to generally I the retail era what's hope this years, expect either it, we've high with forever. general, quarters. generally been, over our a in right or We prices, past, to prices live the happening XX to of low or about which not. Michael. cost model number in inflation the don't because in business of be to retail environment. certainly say as call so

if reverse time we've back period. last you we so expect do out in quick the And three decades, would what that seen reasonably a to get to over

we to So get back this going reverse is it's environment, that not something out. to if take a to normal years

you say, said so generally they're be going as I correct. though. happen which be, can't to to specific is what quarters So

Operator

your Benedict comes the Peter question. of line Please from Next with question Baird. with proceed

Peter Benedict

couple a of Just quick ones.

private David, talked different the all in impact about about lot trade those have -- on John the just the business, increase we thinking can just that? then next down or either And ways, penetration. new and into you First, way frame should years? the maybe few that question the us capabilities. guys brand be you integrated how second a in Understanding business Any can currently the is that you over around the help the flywheel are

had how compares curious are and more to Just happening two we've similar? pace shift past it Is of stress? are guys those questions. periods where you economic acutely? seeing Is maybe it that my that Just the magnitude

John David

on for the second Sure. it pass and I'll part the take question. that of then first part the of John to

the that the are business patterns that consumers this One excites of is that reflective business more Peter, online. opportunity the with the changing really going things, We consumer -- about move me see have where most is in shifting world we of forward model to. a

retailer. skilled ability I think be we in unique a are our omnichannel to

they or consider our higher are margin are you when a these business faster-growing, advertising have so fulfillment of not that with areas things them. like And only services, associated

growth And that's our so contemplate algorithm. we included when

those to earning about we excited that hopefully, earnings quite diverse than a us. also different we've durable years there's much opportunity ascribed exists and multiple We're from a front today. up of in number got and a look So more what streams now of the stream

John Furner

about really in year XXX Peter, categories up just March the movement in it's as private the increased this it's for movement, What of basis not a And brands really by in talk brands years until much to the I'll flat XXXX. food other the brand year. brand about then started And 'XX, from we've seen points. three then penetration, said we QX private of And private quarter, trading John. last this in the second. a for was about its penetration

into So a relatively moved private decent brands. amount has

last comparisons about years this as is probably able XX anything the to prior we would to periods, to I ago. far be XX time think As say

quite So I three today don't quarters switching offer of bit consumers. think in last than other is to anything amongst we've the I a seen some with have specificity what

that in customers trading they're more premium other items. Now that and Walmart to buying are consumers trading not brands. are branded there are They're private

we So the positioned situation we the fact again, I for economic repeat be very help portfolio serve in the with way we'll customers in year. which flexible ready in in of of and customers would by we whatever just so the can merchandising they're channels that and ourselves rest terms that a in the

Doug McMillon

our on I other $XX, kind different XX think ways are that $XX of the we're year, in how XX Thanksgiving that's aspects of last basket. these These a looked -- are of switch. make on more the as group guys scratch Peter, some actions what branded We've one helping of the have scratched, items. up same Thanksgiving taking That Thanksgiving, you pressure. cooking items a of that items. convenient, example alleviates and not done at There, the items relieve different great for meal need baskets to like products for are is

up absorb families And and of action. need see pleased to great step I that can I'm help guys it of example that we really most. to this how you take think some that's a

Operator

Scott with from of Our next question proceed Please Capital. is RX question. your with Mushkin line the

Scott Mushkin

potentially. was being big So a is destroyed to of suggest what underlying year back where the I the guess in wildcard I guess demand -- is underlying demand away, would wanted the inflation to big I that going talking get maybe receding. about idea Michael inflation we and get does demand if with next

And do think so guys that you we business type environment? of if of how your move through

John David

have mix, change in we the think as and in. about the business biggest where bounces prolong John continued We start year. on different general can prices, expect an next particularly assumption David. jump pressured, have into merchandise profile that, I'll is rapidly impacts effects high this the to year. margin year we mix business, of is the in continuing Look, versus And others one don't This the with Sure. our consumables. back food and be next to effect that U.S. been that has consumer

chain So the related I repeat year, is to but the things know this consumer there's some going And onetime are bounce that would costs certainly, hope stressed. supply year we've not that incurred back. next to of

balance by not sheets to One is thus forever. strong assisted of stimulus far that consumers going things assisted that's the payments. last That's among relatively

at So of that's also rather have proposition it's us a the And looking for value just customers on as are the when product not take time, value, really why But view value. this we our all cautious consumer. same it's shines, when assortment. is mentioned,

not XXX them assortment it's price buy. it John products offering that. it's but that to providing not are things and only a increase e-commerce, the quarter-over-quarter. And we're That's XX% think customers for between million the it's repeating, you that first-party at providing we products I that shows point want, that additional worth just and of we're acceleration and of the One SKUs third-party mentioned, the

John Furner

agree add, thing X this. what the Scott, I really would and of said, John I David parts

the we year. would and have strong that some high inventory, to quarter-to-quarter, to then just in First, which value, relative and progress focus any over last approach our XXs longer-term taking control consumer; we great as over of to with consist merchants, is what a XX% value on And positioning We've made from said, can we environment. for the sales execution. finally,

going position part year important flexibility we inventory into environment to get that with manoeuvre into. some an having So that's to the able a really any strong be is

scenario in we ourselves couple be the any next three, for to So of in in, that ready those focus find customers and we'll continue on we'll years.

Scott Mushkin

you the growth? John, do So EBIT business as you at to like up anticipate a U.S. ex LIFO, look that, if follow-up

John David

that not fourth on the give guidance call. prepared quarter more yet. to We're talk next for We'll year about

Doug McMillon

a So really though, try, good Scott.

Doug McMillon

all jump tempted to something, think say were We you I the appropriate but answer. in and David John gave

Operator

Paul from your Lejuez Our of the final proceed question. with with Please Citigroup. comes line today question

Paul Lejuez

opportunities your store of that Just curious, curious them seeing general and of seeing show kind up of you for the you environment your cadence that curious, maybe as terms food in the store. for just the competitive do you holiday shop mentioned you challenges. year about you're talk I'm there? look in of just again what outside Are them seeing parts as have out trading to well expect And as out consumer And this I'm into other higher-income a grocery. promotional you merchandise? holiday,

John Furner

of did in the are the through The the rest food really this what app big about that one What's the seeing who I Hey, food in original the have new forward Walmart.com a excited and because month. shopping XX Paul. and often. have couple of said to then the way as an the do come in see about consumables. trading Walmart via We're over digital last was great. the mix, app is last customers customers grocery exciting a months in that And experience, quarter, We're of which we seeing in looking it's place. we is categories. then more Thanksgiving more next business. Historically, we still brand, earlier, we lot them into of December We're the events And well. season we more integrate a into prepared event the as customers we're week

up XXX-plus assortment, entire there items, one all are the place. to million So in

think be able I to well we're So positioned navigate. to

As said react far to we don't promotional lot holidays, include a still know mid-November, guidance yet. now between as room of of It's to Year. as we ability earlier, and but a the and promotions, the environment, more including would there's the the end New

for few that any environment emerges weeks. the be next we'll again, prepared over So

Doug McMillon

a normal. a day We where years after than of closely we're -- is the last promotional Christmas Christmas. seasons of minute we'll More lot business Late will later. one until XX. do until some This others. are then finish Christmas Eve. don't than watching of sales And January later up be those

particularly where the when stronger end end price-sensitive. up these people sometimes December being out And January quarters and very of are work

expecting. of kind that's what So I'm

Operator

this the call the the turn Thank you. closing time, McMillon remarks. session. I'll At to we've Doug of over for reached end question-and-answer

Doug McMillon

in always, for interest the thanks company. your As

had we pleased are a stronger quarter. We that

excited look kind at but that operational a that this only shared, how model. John not business remarks. and in metrics see the we progress we scaling we've there's key a shared are short-term terms in information a of to other. these would of the how bit morning, different about building We're metrics to each lot think connect is that well talked indicate businesses in David managed of lot I Marketplace a prepared to are being his

about short good for term, and and into with for we're and the I figure things little but dealt be focused holiday I needs the of something, short to think that I'm be but manage of else. going I they the as country, problem of mentioned love term surprised something with portfolio. front list inventory it, us, make lot just have with, inventory engineered helps in have needs next about we we'll long way quarter great guys And the all. So thankful are us sell deal long of well buy I'm a this natural of I things If are data my to team a remarks, the that not of choices focused that If be are want will a I the love, but something excited I'm and the else flexibility. one able things to Thank love that rest challenges this If us, category, a by issue be a things to to consume sure on them don't this of you where some we'll The and we total there's in all one hedges. about has key there it. lower, business, position That's you by price and the we'll experience the build we on been hope for I out. lot yourselves. to there'll year. they the as we about holiday a term. a really management,

Operator

conference. conclude today's will This

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

Walmart (WMT) 15 Nov 222023 Q3 Earnings call transcript