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Wal-Mart Stores Inc. Message Board

  • bluecheese4u bluecheese4u Feb 21, 2013 7:48 AM Flag

    Walmart reports Q4 EPS of $1.67, full year EPS of $5.02; Walmart U.S. gains market share, adds $4.7 billion in comp sales for year; Company announces FY 14 dividend of $1.88, up 18% or $0.29 per share

    Walmart reports Q4 EPS of $1.67, full year EPS of $5.02; Walmart U.S. gains market share, adds $4.7 billion in comp sales for year; Company announces FY 14 dividend of $1.88, up 18% or $0.29 per share
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    Wal-Mart Stores, Inc. (Walmart) reported fiscal year 2013 fourth quarter diluted earnings per share from continuing operations (EPS) of $1.67, a 10.6 percent increase compared to last year. Full year EPS were $5.02, also a 10.6 percent increase over last year. The company's quarter and full year performance benefited from a lower than expected effective tax rate. Last year's fourth quarter EPS were $1.51.
    The company announced its annual fiscal year 2014 dividend of $1.88 per share, an 18 percent increase or $0.29 per share, over last year's dividend of $1.59 per share. [Note: Please see separate release on dividend dated Feb. 21, 2013.]
    Walmart U.S. added more than $10 billion in net sales during fiscal year 2013, including approximately $4.7 billion in comp sales. For the fourth quarter, Walmart U.S. reported a 1.0 percent comp sales increase. Walmart U.S. gained market share1 in "food, consumables, health & wellness/OTC," as well as the entertainment categories and toys.
    Walmart International grew net sales 7.4 percent to $135.2 billion for the year. On a constant currency basis2, net sales would have increased 7.8 percent to $135.7 billion.
    Consolidated net sales reached $466.1 billion for the year, an increase of more than $22 billion, or growth of 5.0 percent.
    All three operating segments and the total company leveraged operating expenses for the year.
    Consolidated operating income was $27.8 billion for the full year, an increase of 4.7 percent over last year.
    Walmart reported strong free cash flow2 of $12.7 billion for the 12 months ended Jan. 31, 2013, an 18.1 percent increase over last year.
    Return on investment2 (ROI) for fiscal year ended Jan. 31, 2013 was 18.2 percent.
    The company returned $13.0 billion to shareholders through dividends and share repurchases during fiscal year 2013.
    1 Sources: The Nielsen Company, 13 weeks ended Jan. 26, 2013. The NPD Group, three-month period ending Dec. 31, 2012.

    2 See additional information at the end of this release regarding non-GAAP financial measures.

    BENTONVILLE, Ark.--(BUSINESS WIRE)--Feb. 21, 2013-- Wal-Mart Stores, Inc. (NYSE: WMT) today reported financial results for the fourth quarter and full year ended Jan. 31, 2013.

    Net sales for the fourth quarter of fiscal 2013 were $127.1 billion, an increase of 3.9 percent from $122.3 billion in last year's fourth quarter. On a constant currency basis1, net sales would have increased 3.7 percent to $126.8 billion. Membership and other income decreased 7.8 percent to $815 million, due to lower other income. Total revenue for the fourth quarter was $127.9 billion, a 3.9 percent increase over last year.

    Income from continuing operations attributable to Walmart for the fourth quarter was $5.6 billion, up 7.9 percent. Diluted earnings per share from continuing operations attributable to Walmart (EPS) for the fourth quarter of fiscal 2013 were $1.67. The effective tax rate for the fourth quarter was 27.7 percent, which was lower than the company's expectations, and compares to 30.9 percent last year. The fourth quarter effective tax rate benefited from a number of discrete tax items, including positive impact from fiscal 2013 legislative changes, most notably the American Taxpayer Relief Act of 2012. In comparison, EPS for the fourth quarter of last year were $1.51.

    Fiscal 2013 results
    Consolidated net sales for the full fiscal year were $466.1 billion, an increase of 5.0 percent over fiscal 2012. Net sales included approximately $4.0 billion from acquisitions and approximately $4.5 billion of negative impact from currency exchange rate fluctuations. Membership and other income was $3.0 billion, a decrease of 1.6 percent from the prior year. Total revenue was $469.2 billion, an increase of 5.0 percent or $22.2 billion.

    Income from continuing operations attributable to Walmart was $17.0 billion, a 7.8 percent increase from $15.8 billion last year. For fiscal 2013, EPS were $5.02 versus last year's EPS of $4.54, an increase of 10.6 percent. The effective tax rate for the full year was 31.0 percent, compared to 32.6 percent for the prior year. This rate was below the company's annual guidance of 32.5 to 33.5 percent, primarily due to the fourth quarter discrete tax items noted above.

    Company well positioned for long term
    "Walmart topped off a really good year with a solid fourth quarter, and I'm proud of what we accomplished as a team," said Mike Duke, Wal-Mart Stores, Inc. president and chief executive officer. "Every day, our associates around the world deliver on our mission to help customers save money so they can live better. Together, we added $22 billion in sales to top $466 billion. Walmart U.S. was a key driver of our five percent net sales increase.

    "Our management team is focused on a few key areas critical to Walmart's long-term success," Duke added, as he outlined them.

    Delivering a strong Walmart U.S. business
    Improving returns for International
    Driving greater efficiency through disciplined capital allocation
    Meeting our five-year leverage goal
    Investing in Global eCommerce, and
    Continuing to strengthen our company's compliance organization
    1 See additional information at the end of this release regarding non-GAAP financial measures.

    "We have high expectations for fiscal 2014, and I'm optimistic as I look ahead," he said. "Walmart is operating in markets that offer continued opportunity for growth, both in our stores and online. With our core Walmart U.S. business operating so well, our investments in e-commerce and our international markets focused on growth and improving returns, we are truly the best positioned global retailer."

    The company leveraged operating expenses for the full year, including the $157 million of professional fees and expenses related to the ongoing Foreign Corrupt Practices Act (FCPA) matter.

    "Fiscal year 2013 was the first year of our five-year plan to reduce operating expenses as a percentage of sales by at least 100 basis points," said Charles Holley, executive vice president and chief financial officer. "We made progress toward our five-year goal, reducing expenses for the year by 14 basis points. Walmart U.S. led this effort. The entire company has rallied around this leverage challenge, and we expect we will continue to see progress towards this goal."

    Strong returns
    During the fourth quarter, the company repurchased approximately 42.3 million shares for $2.9 billion, bringing the full year repurchases to 113.2 million shares for $7.6 billion. In addition, the company paid $1.3 billion and $5.4 billion in dividends for the quarter and year, respectively. For the year, Walmart returned $13.0 billion to shareholders through dividends and share repurchases.

    Walmart ended the year with free cash flow1 of $12.7 billion, compared to $10.7 billion in the prior year. Excellent cash flows from operations and disciplined capital allocation helped deliver very strong free cash flow.

    Return on investment1 (ROI) for the year ended Jan. 31, 2013 was 18.2 percent, compared to 18.6 percent for the prior year. The decline was primarily driven by acquisitions and currency exchange rate fluctuations.

    "In fiscal 2013, we reported EPS of $1.09 for the first quarter. We expect first quarter fiscal 2014 EPS to range between $1.11 and $1.16," Holley said. "These estimates consider current economic factors that are affecting customers in many of our markets.

    “We know there are challenges ahead, but we believe our strong financial position, along with our EDLC and EDLP operating model, will continue to produce strong sales and returns for our shareholders,” Holley said. “In fiscal 2013, we reported full year EPS of $5.02. For fiscal 2014, we expect EPS to range between $5.20 and $5.40, which includes increased fiscal 2014 costs of around $0.09 per share for our e-commerce operations. We are excited about the opportunities these investments will provide."

    Fiscal 2014 EPS guidance assumes that currency rates remain at today's levels and takes into account the company's forecast for the annual effective tax rate to range between 32.0 and 33.0 percent. Additionally, the company's guidance considers the costs associated with the FCPA and compliance matters, which are estimated to be approximately $40 to $45 million for the first quarter of fiscal 2014.

    1 See additional information at the end of this release regarding non-GAAP financial measures.


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    • what a storm!

    • My estimate was $1.72....I really missed.

    • Wal-Mart Tops 4Q Estimates, Boosts Dividend VIDEO

      Feb. 21 (Bloomberg) -- Bloomberg's Alix Steel reports that Wal-Mart topped fourth-quarter earnings expectations and Abby Joseph Cohen, senior investment strategist at Goldman Sachs discusses the announcement of an 18 percent dividend boost for shareholders. They speak on Bloomberg Television's "Bloomberg Surveillance."


    • Lower guidance ......


    • WMT Chart

      Analyst Estimates

      • 1 Reply to bluecheese4u
      • A Wal-Mart Recession? Retail Giant Faces Tax Squeeze

        Photo: REUTERS/Joshua Lott

        By SUZANNE MCGEE, The Fiscal Times
        February 23, 2013

        Wal-Mart Stores fourth-quarter earnings announcement Thursday may have eased some investors’ concerns about the behemoth retailer’s stock – its 18 percent dividend hike certainly didn’t hurt in that regard – but the results didn’t clear up all the questions surrounding consumer spending in the wake of tax changes that took effect in January.

        Worries about Wal-Mart’s sales had been stoked late last week. Whether it was accidental or a deliberately planned leak to get the bad news out of the way, an e-mail from a vice president at Wal-Mart warning about dire February sales figures made its way to reporters at Bloomberg. Jerry Murray, a vice president, warned other executives, "in case you haven't seen a sales report these days, February [month-to-date] sales are a total disaster." He cautioned that the month could be the worst February the company has experienced in seven years.
        February’s sales – the focus of the e-mail – weren’t part of Wal-Mart’s fourth-quarter report, which dealt with the three months through the end of January. But the trend behind the dire warnings began at the start of the year, so investors and analysts were eager to delve into how Wal-Mart performed in the first month of 2013, after its shoppers realized how much new taxes had eaten into their disposable income and had begun to feel the impact of what’s now a four week-long rise in gasoline prices. Nearly half of consumers surveyed by the National Retail Foundation early this month say they have reduced their spending plans as a result of tax changes.
        Wal-Mart posted better-than-expected earnings of $1.67 a share, up 10.6 percent from a year ago. Its revenues, though, were slightly below what analysts had anticipated. Same-store sales inched up 1 percent, below reduced expectations. Plus, even as they reassured analysts that sales returned to a “more normal” pattern last week, Wal-Mart’s executives confirmed that shoppers have been hurt by the payroll tax increase, rising gas prices and IRS delays in sending income tax refunds.
        Last year, Wal-Mart cashed about $4 billion worth of refund checks, Walmart U.S. CEO Bill Simon told analysts. With the fiscal cliff drama delaying the start of tax season, the total so far this year is $1.7 billion.
        “We also know that when a customer received an income tax refund, say the week before the Super Bowl, we had pretty good data that would suggest they would buy a television, for example,” Simon said. “With the delay in the refund moving into March, and even late March, we don’t have any visibility yet to what they might or might not do with those checks.”
        Wal-Mart is particularly vulnerable to these tax-induced woes – perhaps surprisingly so for a company known for “everyday low prices” that might appeal to consumers who “trade down” when money is tight. Jharonne Martis-Olivo, director of consumer research at Thomson Reuters, points out that its two closest rivals within the “discounter” category, Target (NYSE: TGT) and Costco (NASDAQ: COST), cater more to the middle class, who aren’t living as much on the edge as are Wal-Mart’s core consumers.
        Then, she adds, there’s the risk of a repeat of what Wal-Mart endured in the wake of the 2008 recession, when its clients fled for the still-cheaper dollar stores. “Analysts’ projections show Wal-Mart is in trouble, and could enter another ‘recession’ period, losing market share to dollar stores again,” Martis-Olivo said before the earnings release.
        Dollar stores may be wrestling with their own problems – many have expanded in recent years, and it is getting harder for them to show same-store sales growth that is robust as it had been. And they, too, are feeling some of the impact, as shoppers focus on essentials and shun the heavily discounted but still higher-margin items, ranging from toys to housewares.

        The Fiscal Times

        Martis-Olivo notes that while same-store sale forecasts for Family Dollar (NYSE: FDO) have been cut back recently, they still call for a growth rate of more than 4 percent, while those for Dollar Tree (NASDQ: DLTR) are projecting an increase in same-store sales for the first quarter of between 2 percent and 3 percent. In contrast, Wal-Mart expects same store sales to be about flat in the first quarter.
        It has been clear for some weeks that the payroll-tax increase would take a toll on sales, since Wal-Mart’s target customer is the low-income consumer likely to feel the greatest pain from reduced take-home pay. Even in realms where “the lowest price is the law,” there comes a point when it’s impossible to sell merchandise profitably simply because consumers don’t have the money in their accounts to spend.


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