. Walmart reported first quarter diluted earnings per share from continuing operations of $0.98. This compares to $0.87 per share from continuing operations last year.
. Consolidated operating income for the first quarter was $5.9 billion, up 2.8 percent versus last year.
. Net sales for the first quarter were $103.4 billion, an increase of 4.4 percent from last year.
. Walmart U.S. comparable store sales declined 1.1 percent in the 13-week period ended April 29, 2011, approximately the mid-point of guidance. Sam's Club comparable sales, without fuel, increased 4.2 percent for the same period, which was 120 basis points above guidance.
. Walmart International continues to be the growth engine for the company, increasing sales at 11.5 percent.
. The company leveraged operating expenses for the quarter.
. Return on investment (ROI) for the trailing 12 months ended April 30, 2011 was 18.5 percent1, compared to 19.2 percent1 last year. The primary drivers of the change in ROI were the impact from currency exchange and cash held for pending acquisitions.
. During the quarter, the company returned $3.4 billion to shareholders through dividends and share repurchases.
BENTONVILLE, Ark., May 17, 2011 (BUSINESS WIRE) -- Wal-Mart Stores, Inc. (NYSE: WMT) today reported financial results for the first quarter ended April 30, 2011. Net sales for the first quarter of fiscal year 2012 were $103.4 billion, an increase of 4.4 percent from $99.1 billion in the first quarter last year. Net sales for the quarter included a currency exchange rate benefit of $1.3 billion.
Income from continuing operations attributable to Walmart for the quarter was $3.4 billion, up 3.8 percent from the first quarter last year. Diluted earnings per share from continuing operations attributable to Walmart (EPS) for the first quarter of fiscal year 2012 were $0.98, which included a benefit of $0.01 per share related to currency translation. By comparison, last year's EPS were $0.87, which benefitted from currency translation of $0.02.
1 See additional information at the end of this release regarding non-GAAP financial measures.
For comparative purposes, in addition to the impact of currency translation, the company had certain discrete, pre-tax items in the first quarter of this year which are described below:
Approximately $117 million from mark-to-market gains on certain foreign currency derivative positions.
ASDA recorded approximately a $67 million charge for the realization of expenses in the current period related to the removal of future benefit accruals and the effect of future pay increases associated with its defined benefit plan.
Walmart Japan recorded approximately a $51 million charge for casualty losses related to the March earthquake and tsunami.
Walmart Chile recorded approximately a $51 million gain from the sale of an investment.
All of these items are included in operating expenses, with the exception of the gain from the sale in Chile, which is recorded in membership and other income. In summary, the net of these items accounted for approximately $0.01 of the company's EPS for the quarter.
Strong earnings performance
"Walmart is reporting first quarter earnings from continuing operations of $0.98 per share, which was above guidance," said Mike Duke, Wal-Mart Stores, Inc. president and chief executive officer. "This reflects the stability and strength of our global operations.
"Walmart U.S. comp sales for the first quarter were within our guidance range," Duke continued. "We recognize we still have work to do and comp sales growth remains the greatest priority for me and the entire Walmart U.S. team. The good news is that the plan Bill Simon and his team are executing is gaining traction. We're focused on delivering every day low price and a wide assortment."
Walmart International grew first quarter net sales by 11.5 percent over last year to almost $28 billion, with all countries except Japan showing sales increases. The March 11 earthquake and tsunami negatively affected sales in Japan. Because of the calendar shift, the majority of Easter holiday sales for International will fall in the company's second quarter.
"International remains the key growth driver for our company, and the segment is seeing continued growth through a combination of comp sales and new stores," Duke said. "Mexico, China and Chile had the highest percentage sales increases for the first quarter compared to last year."
Duke also highlighted the strong Sam's Club performance.
"Sam's Club delivered really good results this quarter, with a 4.2 percent comp that was well above our guidance," he explained. "Sam's momentum is reflected in comp sales and increases in new members. The warehouse channel is increasing in importance in the retail landscape and Sam's is gaining further momentum. We expect Sam's to add even more value to the company's overall portfolio."
According to Duke, Walmart has tremendous growth opportunities in e-commerce.
"The recent acquisition of Kosmix is now integrated into @Walmartlabs in Silicon Valley, and allows us to expand our capabilities in the online social commerce environment," Duke said. "On Friday, we announced that we are acquiring a minority stake in Yihaodian, one of the leading online retailers in China. We expect ongoing activity in the e-commerce area around the world."
The company leveraged operating expenses for the first quarter.
Walmart ended the quarter with negative free cash flow of approximately $400 million1, compared to a negative $1.6 billion1 in the previous year. ROI for the trailing 12 months ended April 30, 2011 was 18.5 percent, compared to 19.2 percent for the prior year. The primary drivers of the change in ROI were the impact from currency exchange and cash held for pending acquisitions.
"In March, we were pleased to report that our board declared an annual dividend of $1.46 per share for this fiscal year, a 21 percent increase over the previous year's dividend," said Charles Holley, executive vice president and chief financial officer. "We returned $3.4 billion to our shareholders during the first quarter through dividends and share repurchases. We remain committed to returning value to shareholders."
1 See additional information at the end of this release regarding non-GAAP financial measures.
Guidance
"Based on our views of the economic and sales environment in the United States and around the world, we expect second quarter fiscal 2012 diluted earnings per share from continuing operations to range between $1.05 and $1.10, compared to last year's reported EPS of $0.97. These estimates assume that currency exchange rates remain at current levels," said Holley. "We are committed to growing sales throughout all our businesses. Leverage will continue to be a key focus, as it drives both growth and returns."
Operating Segment Details and Analysis
Net sales results
Net sales, including fuel, were as follows (dollars in billions):
Three Months Ended April 30,
2011 2010 Change Percent
Net Sales:
Walmart U.S. $ 62.669 $ 62.324 0.6%
Walmart International 27.905 25.030 11.5%
Sam's Club 12.841 11.743 9.4%
Total Company $ 103.415 $ 99.097 4.4%
Walmart International net sales included a $1.3 billion currency exchange rate benefit for the quarter ended April 30, 2011. On a constant currency basis, Walmart International net sales were up 6.2 percent for the first quarter. Mexico, China and Chile had the strongest comp sales growth, and the highest increases in year-over-year net sales for the first quarter.
Net sales for Sam's Club, excluding fuel, grew to $11.3 billion, an increase of 4.9 percent from last year's first quarter results.
Consolidated net sales on a constant currency basis increased by 3.0 percent to $102.1 billion for the quarter.
Constant currency results are calculated by translating current year results using prior year exchange rates.
After this earnings release has been furnished to the Securities and Exchange Commission (SEC), a pre-recorded call offering additional comments on the quarter will be available to all investors. Callers may listen to this call by dialing 800-778-6902, or 585-219-6420 outside the U.S. and Canada. Information included in this release, including reconciliations, and the pre-recorded phone call are available in the investor information area on the company's website at www.walmartstores.com/investors
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