Our FY 2014 Financial Performance

Fiscal 2014 was a tough year for Walmart. Sales and earnings were not where we wanted them to be, as we faced a number of economic headwinds around the world. But I’m confident in our future because Walmart continues to have an extremely strong underlying business. We’re proud of our AA credit rating – the highest in the retail industry. We have a strong balance sheet, and our business consistently generates robust cash flows. Walmart’s EDLC-EDLP business model resonates with customers, and even in this challenging retail environment, we delivered more than $473 billion in net sales. We also have great opportunities for continued global growth, whether it’s through the intersection of digital and physical retail, small format stores, or our increasing membership in Sam’s Club. When I consider our opportunities ahead, I’m excited about our future, and specifically this new fiscal year.

At Walmart, we’re guided by our financial priorities — growth, leverage and returns. Customers want to shop on their terms. We’re focused on growth by providing customers a unified shopping experience, whether they’re in our supercenters for a large “stock-up trip,” in our smaller stores for groceries, or on their mobile device at their child’s ball game. Our top priority is to increase comp sales in all markets and channels. We drive productivity to deliver EDLC so we can pass savings to customers. These price investments provide greater value under our EDLP position to propel comp sales. In fiscal 2015, we’ll also invest approximately $12.4 billion to $13.4 billion in physical and digital assets to better serve customers worldwide. We expect to add between 35 million and 39 million net new retail square feet. And to connect with customers more effectively, we’re accelerating the rollout of small format stores in many of our markets, including the U.S., the U.K. and Mexico.

Global eCommerce saw strong growth in fiscal 2014, with a 30 percent increase in sales. We’ll continue to invest to enhance technology platforms and expand fulfillment networks, including new facilities in Pennsylvania, Indiana and Brazil. Infrastructure investments help us to be nimble platform, Pangaea, will deliver a world-class integrated customer experience and improve our website speed, flexibility and scalability when it begins to roll out later this year. We’re also leveraging global best practices to increase site visits and add services such as the Asda Direct kiosk – which allows customers to order from online catalogs while they’re still in the store – to grocery delivery and drive-through pickup, which we’re testing in Denver in the U.S. In fiscal 2015, we expect Global eCommerce gross merchandise value, which includes digital sales of Walmart goods and third-party sales through our sites, to exceed $13 billion.

We’re committed to being the lowest cost operator globally and leveraging expenses. In fiscal 2014, Walmart U.S. did a great job of leveraging operating expenses, and International and Sam’s Club took steps to lower their cost structures. We’re sharpening our ability to drive efficiencies in all operations. Globally, our teams are identifying best practices and sharing these efficiency measures so that they can be applied across the organization.

Returning value to shareholders remains a key priority. In fact, we returned $12.8 billion to shareholders through dividends and share repurchases last year, bringing our five-year total to nearly $68 billion. And, in February, we announced our 41st consecutive annual dividend increase to $1.92 per share.

As I close, I encourage you to review our financial results in the next section. We’re focused on consistent execution in every market to continue to serve our customers and deliver growth, leverage and returns for shareholders.

Charles M. Holley, Jr.
Executive Vice President and Chief Financial Officer
Wal-Mart Stores, Inc.