Tag Archives: paycheck to paycheck

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.

 

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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.

 

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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.

 

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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.

 

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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.

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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.

 

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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.

 

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2101.39 as this post is written

Walmart’s Q1 2016 Results – Comments

I found various notable items in Walmart’s Q1 2016 management call transcript (pdf) dated May 19, 2015.  (as well, there is Walmart’s press release of the Q1 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 5:

Walmart U.S. again delivered positive comp sales, and I’m encouraged by the customer traffic trends. I’m particularly pleased by the customer response to our Neighborhood Markets, driving strong comps again this quarter. Based on recent surveys, we know that many of our U.S. customers are using their tax refunds and the extra money from lower gas prices to pay down debt or put it into savings. They’re also using these funds for everyday expenses like utilities and groceries. That’s where we can be their destination of choice. We’re not where we want to be in every store, but I’m pleased with the progress that I’m seeing.

comments from Claire Babineaux-Fontenot, EVP and treasurer, page 8:

The last item I’ll leave you with today is share repurchases. The company repurchased approximately 3.5 million shares for $280 million during the quarter. Market conditions, general business trends and a focus on maintaining our AA credit rating, among other factors, influenced our share repurchase activity. We have approximately $10 billion remaining on our existing share repurchase authorization.

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

This quarter we began executing this plan. We took the initial steps in April towards a stronger investment in our associates by raising the minimum starting wage for all hourly associates to $9.00 per hour. As a part of our $1 billion investment in our associates we also raised the floor and ceiling on pay bands in our stores creating raises for many full and part-time hourly associates at every level. More than 500,000 associates benefited from this change. We’re also restructuring the management teams in the stores adding back almost 8,000 department managers. These department managers will have responsibility for a smaller area of the store ensuring that they have the knowledge and the time to engage with both the customers and store associates driving an overall better experience. The $1 billion investment in our associates this year includes training programs as well.

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

With these steps in mind, let’s move on to our first quarter results. Net sales grew $2.4 billion, or 3.5 percent, versus last year. For the 13-week period ended May 1, comparable stores were up 1.1 percent, which was within our guidance. Comp sales were driven by solid growth in traffic, which was up 1 percent. Customers continue to see the benefit of lower gas prices versus last year and are responding favorably to some of our new assortments for the spring and summer selling seasons.

All formats had positive comps for the quarter, including our traditionalformat Neighborhood Markets, which posted approximately a 7.9 percent comp. A focus on customer service and in-stock position drove strong traffic in this format. Customers continue to see the benefit of Neighborhood Markets to meet their everyday needs, including convenient access to services such as drive-thru pharmacies and fuel stations.

comments from Greg Foran, president and CEO of Walmart U.S., page 11:

Moving on to the remainder of our financial results…In the first quarter, gross profit rate declined 13 basis points driven primarily by a headwind from shrink, half of which was in food. We are addressing this increase immediately, bringing a high level of focus and visibility to this concern by adding it as a key urgent agenda item this year. In addition to shrink, the ongoing mix shift in pharmacy, incremental expenses related to the west coast port congestion, and cost inflation in consumables contributed to the decline. Somewhat offsetting this was a continued focus on the urgent agenda items laid out last year, including managing throwaways in fresh and reducing inventory that is no longer active in the stores.

 

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 2125.85 as this post is written

Walmart’s Q4 2015 Results – Comments

I found various notable items in Walmart’s Q4 2015 management call transcript (pdf) dated February 19, 2015.  (as well, there is Walmart’s press release of the Q4 results)

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:

Now clearly, our sales benefitted from customers having more spending power due to lower gas prices in most of our large markets. In addition, product inflation and more favorable weather were a tailwind to U.S. comp sales.

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

Value matters to everyone, regardless of household income level, and digital access creates even more price transparency. Being the low price leader has been a part of our customer proposition; and it will continue to be a priority in the future.

also:

Walmart U.S. improved its sales and operating income trends each consecutive quarter during fiscal 2015. Fourth quarter comp sales were the strongest in more than 2 years, with positive traffic for the first time in 9 quarters. Our Neighborhood Markets have continued to deliver strong comps. Our emphasis remains on the quality of the stores that we open, not the quantity.

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

First, we believe associates equally value their hourly rate and hours worked. We’re happy to announce improvements to both aspects of associates’ earning opportunity. Current and future associates will benefit from this initiative, which ensures that Walmart hourly associates earn at least $1.75 above today’s federal minimum wage, or $9.00 per hour in April. And current associates will earn $10.00 per hour or higher by next February.

comments from Greg Foran, president and CEO of Walmart U.S., page 16:

And finally, we saw strong performance from our Neighborhood Market format. While all formats experienced positive sales comps, our traditional Neighborhood Markets continue to outperform Walmart supercenters and discount stores, providing customers with the products and services they desire at locations that are convenient to them. Our traditional Neighborhood Markets delivered approximately a 7.7 percent comp for the quarter.

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

Now let me cover our full-year financial performance. For the year, net sales increased 3.1 percent, or $8.6 billion, to $288 billion. Comp sales improved 0.5 percent for the 52-week period ended January 30, while operating income declined 2.1 percent to $21.3 billion. Gross profit improved 2.6 percent for the year, with a 12 basis point decline in gross profit rate. This was primarily driven by price investments in meat and preferred Medicare prescription plans.

comments from Greg Foran, president and CEO of Walmart U.S., page 18:

In FY16, we expect to open approximately 60 to 70 supercenters, including relocations and expansions. Additionally, we’ll open an estimated 180 to 200 Neighborhood Markets, including 10-15 smaller-format locations, as we complete our openings of this test program. We’ll continue to monitor the progress of these test locations before making any further commitments to this format. We expect to add approximately 15 to 16 million retail square feet this year.

 

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 2098.19 as this post is written

Financial Condition Of Many Americans

The financial condition of many Americans remains very disconcerting on many fronts, as seen in many statistics and empiricism.

I have have written many posts on this widespread problematical financial condition, and many of these posts are seen in the “paycheck to paycheck” tag.

One recent notable report on the financial conditions of Americans includes the Russell Sage Foundation’s “Wealth Levels, Wealth Inequality, and The Great Recession“(pdf) which I mentioned in the August 7, 2014 post titled “Thoughts Concerning The Next Financial Crisis.”  This report has information regarding individuals’ net worth, and portrays many deeply disconcerting aspects concerning net worth levels and trends.  Another report on the subject was the Federal Reserve’s “Report on the Economic Well-Being of U.S. Households” (pdf) for 2013, and this was last discussed in the August 11, 2014 post titled “Financial Situation Experienced By Americans.”

Since that time, there have been at least two more notable reports that provide insights into the financial condition of Americans.   One is the McKinsey report of December 2014 titled “America the frugal:  US Consumer Sentiment Survey.”  Another is the bankrate.com survey discussed in the January 7, 2015 bankrate.com post titled “Budgets can crumble in times of trouble.”

The McKinsey report contains various notable information, including indications of a continuing high level of consumers who report they are living “paycheck to paycheck.”

The bankrate.com survey is dicussed in the Wall Street Journal post of January 7, 2015, titled “Most Americans Don’t Have Savings to Pay Unexpected Bill.”  An excerpt:

Only 38% of those polled said they could cover a $500 repair bill or a $1,000 emergency room visit with funds from their bank accounts, a new Bankrate report said. Most others would need to take on debt or cut back elsewhere.

Additional details can be seen in the reports and posts mentioned above.

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 2062.14 as this post is written