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” label.

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