Tag Archives: paycheck to paycheck

Walmart’s Q3 2018 Results – Comments

I found various notable items in Walmart’s Q3 2018 management call transcript (pdf) dated November 16, 2017.  (as well, there is Walmart’s press release of the Q3 results and related presentation materials)

I view Walmart’s results and comments as particularly noteworthy given their retail prominence and focus on low prices.  I have previously commented on their quarterly management call comments; these previous posts are found under the “paycheck to paycheck” tag.

Here are various excerpts that I find most notable:

comments from Doug McMillon, President and CEO, page 4, wrt Walmart U.S.: 

We had a strong quarter with comp-sales growth of 2.7 percent and
comp traffic growth of 1.5 percent. While we recognize that there are some
incremental hurricane-related sales in these numbers, our core business is
performing well.

comments from Doug McMillon, President and CEO, page 4, wrt Walmart U.S.: 

Walmart U.S. eCommerce sales were up 50 percent this quarter, with
the majority of the increase through Walmart.com. Existing customers have
become advocates for popular initiatives like online grocery and free twoday
shipping, and as a result, new customers, suppliers and partnerships
are coming to Walmart. The expanded assortment on Walmart.com has
also contributed to growth. Over the past year, we’ve tripled the number of
items on Walmart.com to reach more than 70 million SKUs today. As you
heard last month, Marc’s team is making progress on hiring additional
category specialists focused on improving the customer experience and our
positioning with the top one million eCommerce items. The recent
agreement with Lord and Taylor is a great example of how we will be
creating specialty experiences that complement what we offer and serve
customers with the brands they want. We’re making good progress
attracting premium brands to the site such as KitchenAid and Bose.

comments from Brett Biggs, EVP & CFO, page 7:

We expect top line growth going forward to be led more by comp
sales and eCommerce with less emphasis on new units in the U.S. We
have good sales momentum and cost transformation is gaining traction.
This gives us confidence in our ability to operate with discipline and
leverage expenses. In terms of capital allocation, we’re prioritizing
eCommerce, technology, supply chain and store remodels over new stores
and clubs, which we believe will contribute to long-term value creation for
shareholders. We’re excited about the future of Walmart.

comments from Brett Biggs, EVP & CFO, page 9:

Walmart U.S. eCommerce continued its strong performance with net
sales growth of 50 percent. We began to lap the acquisition of Jet.com
mid-quarter, which impacted our overall growth. Walmart.com, including
online grocery, once again led the way and was responsible for the majority
of the growth in the period. Throughout this year we’ve talked a lot about
the speed at which we’re moving, and we continued that progress in the
third quarter. For example, we launched new partnerships with Google and
August Home – these are capital-light initiatives that expand convenience
for customers by enabling hands free voice shopping and unattended
delivery in the home. We also acquired Parcel, a technology-based, sameday,
last-mile delivery company focused on customers in New York City.

comments from Brett Biggs, EVP & CFO, page 10, wrt Walmart U.S.:  

Walmart U.S. had a strong quarter with comp sales growth of 2.7
percent led by a traffic increase of 1.5 percent. While difficult to quantify
precisely, we estimate hurricane-related impacts benefited comps by 30 to
50 basis points. On a two-year stacked basis, comp sales were up 3.9
percent and comp traffic increased 2.2 percent. This is the strongest
quarterly and two-year stacked comp performance in more than eight
years. The food business continued to accelerate with sales, traffic and
unit growth across categories. In fact, food categories delivered the
strongest quarterly comp sales performance in almost six years. Market
inflation was around or slightly less than what we saw in the second
quarter. All formats had positive comps and eCommerce contributed
approximately 80 basis points to the segment.

Gross margin rate declined 36 basis points in the quarter. The
margin rate decreased in part due to the continued execution of our price
investment strategy and the mix effects from our growing eCommerce
business. In addition, we estimate that hurricane-related impacts were
about one-third of the overall decline.

Operating expenses as a percentage of net sales decreased 10 basis
points, with stores leveraging at a higher level than that. The U.S. team
has made great progress while maintaining high customer service levels,
as associates are more efficient with improved technology, training and
processes.

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 2564.62 as this post is written

Walmart’s Q2 2018 Results – Comments

I found various notable items in Walmart’s Q2 2018 management call transcript (pdf) dated August 17, 2017.  (as well, there is Walmart’s press release of the Q2 results and related presentation materials)

I view Walmart’s results and comments as particularly noteworthy given their retail prominence and focus on low prices.  I have previously commented on their quarterly management call comments; these previous posts are found under the “paycheck to paycheck” tag.

Here are various excerpts that I find most notable:

comments from Doug McMillon, President and CEO, page 4, wrt Walmart U.S.: 

We had a strong quarter with comp-sales growth of 1.8 percent and
comp-traffic growth of 1.3 percent. It’s exciting that sales growth is coming
from across the business– including stores, e-commerce and a
combination of both.

comments from Brett Biggs, EVP & CFO, page 8:

Walmart U.S. eCommerce again performed very well on the topline
as GMV grew 67 percent and sales increased 60 percent, including
acquisitions. The majority of this growth was organic through
Walmart.com, including Online Grocery, which is growing quickly. We’re
delivering growth through an improved customer value proposition that
includes free two-day shipping on millions of items and Easy Reorder, as
well as an expanded assortment, now with more than 67 million SKUs – an
increase of more than 30 percent from the first quarter. With Easy
Reorder, we’re integrating both in-store and online purchases to provide
customers with a single spot to view and repurchase the items they buy
most frequently. Initiatives like these, along with everyday low prices, are
the reasons why customers are choosing Walmart in greater numbers. As
a reminder, we’ll begin to lap the Jet.com acquisition in the third quarter.

comments from Brett Biggs, EVP & CFO, page 9, wrt Walmart U.S.: 

Gross margin rate declined 5 basis points in the quarter. Savings
from procuring merchandise benefited the margin rate but was more than
offset by the mix effects from our growing e-commerce business, as well as
continued investments in price.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2468.11 as this post is written

Walmart’s Q1 2018 Results – Comments

I found various notable items in Walmart’s Q1 2018 management call transcript (pdf) dated May 18, 2017.  (as well, there is Walmart’s press release of the Q1 results and related presentation materials)

I view Walmart’s results and comments as particularly noteworthy given their retail prominence and focus on low prices.  I have previously commented on their quarterly management call comments; these previous posts are found under the “paycheck to paycheck” tag.

Here are various excerpts that I find most notable:

comments from Doug McMillon, President and CEO, page 3, wrt Walmart U.S.: :

Comp store sales grew 1.4 percent and comp store traffic improved 1.5 percent. We got off to a slower start than expected, due in part to delayed federal tax refund checks, but saw sales strengthen throughout the quarter. We also continued to manage the business well from an inventory and availability standpoint.

comments from Doug McMillon, President and CEO, page 4:

In U.S. eCommerce, we like the traction and we are working hard to make even more improvements. Walmart.com launched two new initiatives in the quarter. First, we made the change to shipping terms at the beginning of the quarter. Customers don’t have to pay a membership fee to get two-day shipping on millions of items. Second, we recently began offering customers pick-up discounts on non-store items. Our stores are located within 10 miles of nearly 90 percent of the U.S. population—so this is convenient for many of our customers, and also saves them money when they order online and pick it up during their visit to our stores.

comments from Brett Biggs, EVP & CFO, page 7:

Gross profit margin increased 1 basis point during the quarter. The rate for Walmart U.S. was flat, while Walmart International was up slightly.

comments from Brett Biggs, EVP & CFO, page 8, wrt Walmart U.S.:

You will recall in our fourth quarter comments that the first quarter started out slower than anticipated from a sales standpoint, due in part to the delayed issuance of federal income tax refund checks. As anticipated, our sales strengthened as the quarter progressed, delivering comp sales growth of 1.4 percent, led by an increase in customer traffic of 1.5 percent. This marks the 10th consecutive quarter of positive comp traffic. On a twoyear stacked basis, comp traffic is up 3 percent. Average ticket declined slightly primarily due to lower sales of higher ticket items at the beginning of the quarter, as well as continued price investment. Additionally, the grocery business continued to improve with food categories delivering the strongest quarterly comp sales performance in more than three years, due in part to a lack of market deflation in food, excluding price investments.

comments from Brett Biggs, EVP & CFO, page 9, wrt Walmart U.S.:

Gross margin rate was flat in the quarter. Savings from procuring merchandise and the acceleration of post-holiday markdowns taken in the fourth quarter benefited the margin rate, but this was offset by investments in price and the mix effects from our growing e-commerce business.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2357.03 as this post is written

Walmart’s Q4 2017 Results – Comments

I found various notable items in Walmart’s Q4 2017 management call transcript (pdf) dated February 21, 2017.  (as well, there is Walmart’s press release of the Q4 results and related presentation materials)

I view Walmart’s results and comments as particularly noteworthy given their retail prominence and focus on low prices.  I have previously commented on their quarterly management call comments; these previous posts are found under the “paycheck to paycheck” tag.

Here are various excerpts that I find most notable:

comments from Doug McMillon, President and CEO, page 2:

Good morning everyone. As you saw in our earnings materials this morning, we delivered a very solid quarter and it’s great to see continued momentum in the business. Total revenue grew 3.0 percent in the quarter and increased 3.1 percent for the year, both in constant currency. Comp sales growth of 1.8 percent in the Walmart U.S. business this quarter was better than expected, and I’m particularly pleased with the traffic in our stores. U.S. GMV grew 36 percent in the quarter, so we’re headed in the right direction with this important part of our business, too.

comments from Brett Biggs, EVP & CFO, page 7:

We saw strong growth this quarter in the Walmart U.S. eCommerce business with GMV and sales growth of 36 percent and 29 percent, respectively. Our integrated offering means customers are shopping with us through multiple channels. In fact, over the holidays, Pickup Today, which is available in Walmart U.S. stores, grew by 27 percent over last year.

comments from Brett Biggs, EVP & CFO, page 8:

We accomplished this while also returning a substantial amount of cash to shareholders. In fact, over the past year, we returned $14.5 billion to shareholders in the form of dividends and share repurchase. As of the end of the fiscal year, we had used approximately $10.8 billion of the current $20 billion share repurchase authorization. Additionally, today we announced an increase in our annual dividend from $2.00 per share to $2.04 per share in fiscal 2018. We’ve now increased our dividend for 44 consecutive years. We’re proud of our track record of returning significant cash to shareholders, while investing in future growth.

comments from Brett Biggs, EVP & CFO, page 9:

Gross margin decreased 8 basis points in the quarter. Savings from procuring merchandise as well as lower logistics costs benefitted the margin rate, but were more than offset by the continued execution of our price investment strategy and the timing of post-Holiday markdowns. We’re entering the new year in a very solid inventory position. For the year, Walmart U.S. gross margin increased 24 basis points. As a reminder, both fourth quarter and full-year comparisons included a $56 million impact last year related to store closures.

 

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2351.16 as this post is written

Walmart’s Q3 2017 Results – Comments

I found various notable items in Walmart’s Q3 2017 management call transcript (pdf) dated November 17, 2016.  (as well, there is Walmart’s press release of the Q3 results and related presentation materials)

I view Walmart’s results and comments as particularly noteworthy given their retail prominence and focus on low prices.  I have previously commented on their quarterly management call comments; these previous posts are found under the “paycheck to paycheck” tag.

Here are various excerpts that I find most notable:

comments from Doug McMillon, President and CEO, page 4:

Comp store sales grew 1.2 percent in Walmart U.S., driven by a traffic increase of 0.7 percent. Greg Foran, our U.S. leadership team and our associates continue to execute our plan to win, and it’s working. Our customer satisfaction scores continue to improve, and the team did a great job of managing the flow of inventory again this quarter. Comp store inventory was down approximately 6 percent and in-stock levels are up.

comments from Brett Biggs, EVP & CFO, page 8:

During this transformational time, a key priority remains using our financial strength to provide strong cash returns to shareholders in the form of dividends and share repurchases. In the quarter, we paid approximately $1.5 billion in dividends and repurchased 19.6 million shares for approximately $1.4 billion. Year-to-date, we have now returned $10.9 billion to shareholders. As of the end of the third quarter, we have utilized approximately $8.7 billion of the current $20 billion share repurchase authorization.

comments from Brett Biggs, EVP & CFO, page 9:

As a result, operating income declined 11.3 percent for the quarter. Excluding last year’s lease accounting adjustment, operating income would have declined 9.8 percent.

 

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2187.49 as this post is written

Walmart’s Q2 2017 Results – Comments

I found various notable items in Walmart’s Q2 2017 management call transcript (pdf) dated August 18, 2016.  (as well, there is Walmart’s press release of the Q2 results and related presentation materials)

I view Walmart’s results and comments as particularly noteworthy given their retail prominence and focus on low prices.  I have previously commented on their quarterly management call comments; these previous posts are found under the “paycheck to paycheck” tag.

Here are various excerpts that I find most notable:

comments from Doug McMillon, President and CEO, page 2:

We exceeded our Walmart U.S. comp sales guidance this quarter, with Walmart U.S. delivering comp sales of 1.6 percent, driven by a traffic increase of 1.2 percent. This was our 8th consecutive quarter of positive comp sales and our 7th consecutive quarter of positive traffic. I’m encouraged by what I’m seeing when I visit stores and pleased with how Greg Foran, our leadership team and our associates are executing our plan to win. Our customer satisfaction scores continue to improve, and the team did a great job of managing the flow of inventory again this quarter. Comp store inventory was down 6.5 percent and in-stock levels are up.

comments from Brett Biggs, EVP & CFO, page 9:

Gross margin increased 33 basis points in the quarter. Improved margin rates in food and consumables were a contributing factor. In addition, we had improvement in our cost of goods due to savings in procuring merchandise, lower transportation expense as a result of lower fuel costs and some improvements in shrink. These benefits are somewhat offset by the implementation of the multi-year strategy of incremental price investments.

comments from Brett Biggs, EVP & CFO, page 10:

Operating expenses increased 8.3 percent over last year due primarily to the previously announced associate wage rate increases and investments in technology. We remain focused on managing expenses with an EDLC mindset while elevating the shopping environment for customers. Overall, the SG&A increase was partially offset by improved gross margins, resulting in an operating income decline of 6.2 percent.

 

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2182.22 as this post is written

Walmart’s Q1 2017 Results – Comments

I found various notable items in Walmart’s Q1 2017 management call transcript (pdf) dated May 19, 2016.  (as well, there is Walmart’s press release of the Q1 results(pdf) and related presentation materials)

I view Walmart’s results and comments as particularly noteworthy given their retail prominence and focus on low prices.  I have previously commented on their quarterly management call comments; these previous posts are found under the “paycheck to paycheck” tag.

Here are various excerpts that I find most notable:

comments from Doug McMillon, President and CEO, page 3:

We delivered comp sales of 1 percent in Walmart U.S. due to continuing traffic increases, which improved 1.5 percent this quarter. This was our 7th consecutive quarter of positive comp sales, and our 6th consecutive quarter of positive comp traffic.

comments from Brett Biggs, EVP & CFO, page 9:

Gross margin improved 44 basis points in the quarter. We delivered improved margin rates in Food, Consumables and Health & Wellness as our continued focus on reducing costs both in how we operate the business and in procuring merchandise provided benefits. In addition, transportation costs benefited from lower fuel prices, we had some improvements in shrink, and we also lapped last year’s incremental expenses related to the west coast port congestion.

comments from Brett Biggs, EVP & CFO, page 10:

Finally, as we communicated in October, price investment is always an important part of our growth plan. We began the initial phase of additional price investment late in the first quarter, lowering prices on key items in select geographies. As always, we’re committed to providing quality merchandise at a great value, using data and analytics to better serve our customers.

 

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2047.63 as this post is written

Walmart’s Q4 2016 Results – Comments

I found various notable items in Walmart’s Q4 2016 management call transcript (pdf) dated February 18, 2016.  (as well, there is Walmart’s press release of the Q4 results(pdf))

I view Walmart’s results and comments as particularly noteworthy given their retail prominence and focus on low prices.  I have previously commented on their quarterly management call comments; these previous posts are found under the “paycheck to paycheck” tag.

Here are various excerpts that I find most notable:

comments from Doug McMillon, President and CEO, page 4:

Overall, this past year has been a year of investment, operational improvement and change, even while we delivered solid growth. We do see an underlying strength in our Walmart U.S. business that wasn’t there a year ago.

comments from Greg Foran, president and CEO of Walmart U.S., page 9:

Secondly, in January, we announced the closing of 150 U.S. stores, including all 102 of our Express format locations. Closing stores is never an easy decision, but it’s necessary to ensure we are positioned to deliver our long-term plan. Strengthening the Supercenter and Neighborhood Market formats, while simultaneously delivering a seamless experience with e-commerce, will require our full attention. In fact, we expect to open more than 135 stores in fiscal 2017 alone. While we know that closing stores affected a number of our associates, I’m proud to say that more than half of these associates have already received offers or have been placed in open roles in nearby stores, and we’re moving aggressively to identify other open positions for the remaining associates who are interested in transferring to new locations.

comments from Greg Foran, president and CEO of Walmart U.S., page 13:

We opened 69 supercenters this year, including relocations and conversions, and 146 traditional-format Neighborhood Markets. In FY17, we expect to open 50 to 60 supercenters, including relocations and conversions. We’ll also open 85 to 95 Neighborhood Markets. Additionally, we plan to further expand our online grocery program to more markets this year. As we have discussed in the past, we are committed to growth, but we’ll do it sensibly, with the customer in mind as we select the right locations, products, and service offerings for each store.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1926.82 as this post is written

Walmart’s Q3 2016 Results – Comments

I found various notable items in Walmart’s Q3 2016 management call transcript (pdf) dated November 17, 2015.  (as well, there is Walmart’s press release of the Q3 results(pdf))

I view Walmart’s results and comments as particularly noteworthy given their retail prominence and focus on low prices.  I have previously commented on their quarterly management call comments; these previous posts are found under the “paycheck to paycheck” tag.

Here are various excerpts that I find most notable:

comments from Doug McMillon, President and CEO, page 3:

As we expected, operating income continued to be pressured by our decision to invest in our front line associates. To improve the store experience for our customers and create a bridge to our future where digital capabilities will play an increasing role in our stores, we’re making a $1.2 billion planned investment in our people this year that we understood would impact near-term operating income. This is by far the biggest driver of the decline in consolidated operating income.

comments from Claire Babineaux-Fontenot, EVP and treasurer, page 9:

I’ll close today’s discussion with a few comments on returns. At Walmart, we remain committed to providing good returns for our shareholders. During last month’s meeting for the investment community, we announced a new share repurchase authorization of $20 billion, and said that our intention is to utilize this authorization over a two-year period. The company repurchased approximately 6.1 million shares for $437 million during the third quarter.

comments from Greg Foran, president and CEO of Walmart U.S., page 10:

Our customers told us they’re happy with the improvements we’re making in their shopping experience, as reflected in our customer experience scores. To date, 70 percent of our stores have achieved the initial goal we set for them, and we’ll raise the bar for next year. We also saw some progress this quarter in gross margin, with the work we’ve put in on pharmacy, markdowns, and shrink. However, as we’ve discussed before, the investments in our stores and our associates are significant, and will continue to pressure the bottom line.

comments from Greg Foran, president and CEO of Walmart U.S., page 12:

Moving on to the remainder of our financials…gross margin increased 32 basis points versus last year. Gross margin rate improved in food, general merchandise, and consumables but was somewhat offset by declines in health & wellness. Reimbursement levels continued to pressure pharmacy profits; however, we’ve made some strides across several initiatives that improved margins in this department versus Q2. Additionally, we remained focused on our urgent agenda items, including better management of markdowns to zero. Finally, while only just beginning to show in our results, we are pleased with our efforts thus far on addressing shrink, which has been a significant headwind for us this year.

 

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2054.61 as this post is written

Walmart’s Q2 2016 Results – Comments

I found various notable items in Walmart’s Q2 2016 management call transcript (pdf) dated August 18, 2015.  (as well, there is Walmart’s press release of the Q2 results(pdf))

I view Walmart’s results and comments as particularly noteworthy given their retail prominence and focus on low prices.  I have previously commented on their quarterly management call comments; these previous posts are found under the “paycheck to paycheck” tag.

Here are various excerpts that I find most notable:

comments from Doug McMillon, President and CEO, page 7:

In the second quarter, Walmart generated more than $120 billion in revenue and delivered earnings per share of $1.08. I’m encouraged by the improvement in our constant currency sales and recognize that our bottom line results should have been better. We had margin pressure from pharmacy reimbursements and higher shrink than we expected during the quarter. These impacts, coupled with higher wage investments, impacted EPS.

comments from Greg Foran, president and CEO of Walmart U.S., page 13:

Second, we’re investing in our associates. This April, we raised the minimum starting wage in our stores to $9.00 per hour, resulting in over 500,000 associates receiving a raise. This new wage structure is expanding our applicant pool. We are also introducing 8,000 new department manager positions, a more focused role that allows the associate to be trained and become more knowledgeable with the areas they support, providing our customers with a better experience in the store. Additionally, we are continuing to focus on career development for all of our associates. Finally, we’ve increased the amount an associate will receive upon being promoted into higher levels of responsibility. These changes gave pay raises to an additional 150,000 associates who are critical to improving the in-store experience.

comments from Greg Foran, president and CEO of Walmart U.S., page 17:

Moving on to the remainder of our financials…gross profit rate declined 41 basis points this quarter. As I said before, this was driven by a handful of key issues. Let’s talk about pharmacy. Reflecting industrywide trends, we are seeing reduced reimbursement rates from Pharmacy Benefit Managers, which is negatively impacting gross margin.

We are also seeing a lower mix of higher-margin cash transactions, reflecting a marketplace shift in which more customers are now benefiting from greater drug insurance coverage. While we are taking a number of actions to lessen the impact, we expect to have pressure on pharmacy for the rest of the fiscal year. Additionally, inventory shrinkage was meaningfully higher than plan for the quarter. We are reviewing the end-to-end inventory management process with a special focus on shrinkage and working to close gaps. Investments are being made in training programs for store and asset protection associates as well as investments in staffing in high shrink areas of the store. But it will take time to see results, so this will impact us versus plan for the rest of the year.

 

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 2101.39 as this post is written