earnings presentation (fy22 q2)

Q2FY2022

Financialpresentationtoaccompanymanagementcommentary

Thispresentationcontainsstatementsormayincludeormayincorporatebyreference,statementsthatmaybedeemedtobe"forward-lookingstatements"withinthemeaningofSection21EoftheSecuritiesExchangeActof1934,asamended(the"Act"),thatareintendedtoenjoytheprotectionofthesafeharborforforward-lookingstatementsprovidedbytheActaswellasprotectionsaffordedbyotherfederalsecuritieslaws.Assumptionsonwhichsuchforward-lookingstatementsarebasedarealsoforward-lookingstatements.Suchforward-lookingstatementsarenotstatementsofhistoricalfacts,butinsteadexpressourestimatesorexpectationsforourconsolidated,oroneofoursegment'sorbusiness’,economicperformanceorresultsofoperationsforfutureperiodsorasoffuturedatesoreventsordevelopmentsthatmayoccurinthefutureordiscussourplans,objectivesorgoals.Ouractualresultsmaydiffermateriallyfromthoseexpressedinorimpliedbyanyoftheseforward-lookingstatementsasaresultofchangesincircumstances,assumptionsnotbeingrealizedorotherrisks,uncertaintiesandfactorsincluding:theimpactoftheCOVID-19pandemiconourbusinessandtheglobaleconomy;economic,capitalmarketsandbusinessconditions;trendsandeventsaroundtheworldandinthemarketsinwhichweoperate;currencyexchangeratefluctuations,changesinmarketinterestratesandmarketlevelsofwages;changesinthesizeofvariousmarkets,includingeCommercemarkets;unemploymentlevels;inflationordeflation,generallyandinparticularproductcategories;consumerconfidence,disposableincome,creditavailability,spendinglevels,shoppingpatterns,debtlevelsanddemandforcertainmerchandise;theeffectivenessoftheimplementationandoperationofourstrategies,plans,programsandinitiatives;unexpectedchangesinourobjectivesandplans;theimpactofacquisitions,investments,divestitures,andotherstrategicdecisions;ourabilitytosuccessfullyintegrateacquiredbusinesses;changesinthetradingpricesofcertainequityinvestmentswehold;initiativesofcompetitors,competitors'entryintoandexpansioninourmarkets,andcompetitivepressures;customertrafficandaveragetransactionsinourstoresandclubsandonoureCommercewebsites;themixofmerchandisewesell,thecostofgoodswesellandtheshrinkageweexperience;ourgrossprofitmargins;thefinancialperformanceofWalmartandeachofitssegments,includingtheamountsofourcashflowduringvariousperiods;theamountofournetsalesandoperatingexpensesdenominatedintheU.S.dollarandvariousforeigncurrencies;commoditypricesandthepriceofgasolineanddieselfuel;supplychaindisruptionsanddisruptionsinseasonalbuyingpatterns;theavailabilityofgoodsfromsuppliersandthecostofgoodsacquiredfromsuppliers;ourabilitytorespondtochangingtrendsinconsumershoppinghabits;consumeracceptanceofandresponsetoourstores,clubs,eCommerceplatforms,programs,merchandiseofferingsanddeliverymethods;cybersecurityeventsaffectingusandrelatedcostsandimpacttothebusiness;developmentsin,outcomesof,andcostsincurredinlegalorregulatoryproceedingstowhichweareapartyoraresubject,andtheliabilities,obligationsandexpenses,ifany,thatwemayincurinconnectiontherewith;casualtyandaccident-relatedcostsandinsurancecosts;theturnoverinourworkforceandlaborcosts,includinghealthcareandotherbenefitcosts;oureffectivetaxrateandthefactorsaffectingoureffectivetaxrate,includingassessmentsofcertaintaxcontingencies,valuationallowances,changesinlaw,administrativeauditoutcomes,impactofdiscreteitemsandthemixofearningsbetweentheU.S.andWalmart'sinternationaloperations;changesinexistingtax,laborandotherlawsandregulationsandchangesintaxratesincludingtheenactmentoflawsandtheadoptionandinterpretationofadministrativerulesandregulations;theimpositionofnewtaxesonimports,newtariffsandchangesinexistingtariffrates;theimpositionofnewtraderestrictionsandchangesinexistingtraderestrictions;adoptionorcreationofnew,andmodificationofexisting,governmentalpolicies,programs,initiativesandactionsinthemarketsinwhichWalmartoperatesandelsewhereandactionswithrespecttosuchpolicies,programsandinitiatives;changesinaccountingestimatesorjudgments;thelevelofpublicassistancepayments;naturaldisasters,changesinclimate,geopoliticalevents,globalhealthepidemicsorpandemicsandcatastrophicevents;andchangesingenerallyacceptedaccountingprinciplesintheUnitedStates.

OurmostrecentannualreportonForm10-KandsubsequentquarterlyreportonForm10-QfiledwiththeSECdiscussotherrisksandfactorsthatcouldcauseactualresultstodiffermateriallyfromthoseexpressedorimpliedbyanyforward-lookingstatementinthepresentation.Weurgeyoutoconsideralloftherisks,uncertaintiesandfactorsidentifiedaboveordiscussedinsuchreportscarefullyinevaluatingtheforward-lookingstatementsinthispresentation.Walmartcannotassureyouthattheresultsreflectedinorimpliedbyanyforward-lookingstatementwillberealizedor,evenifsubstantiallyrealized,thatthoseresultswillhavetheforecastedorexpectedconsequencesandeffectsfororonouroperationsorfinancialperformance.Theforward-lookingstatementsmadetodayareasofthedateofthispresentation.Walmartundertakesnoobligationtoupdatetheseforward-lookingstatementstoreflectsubsequenteventsorcircumstances.

Thispresentationincludescertainnon-GAAPmeasuresasdefinedunderSECrules,includingnetsales,revenue,andoperatingincomeonaconstantcurrencybasis,adjustedoperatingincome,adjustedoperatingincomeinconstantcurrency,adjustedEPS,freecashflowandreturnoninvestment.Refertoinformationaboutthenon-GAAPmeasurescontainedinthispresentation.AdditionalinformationasrequiredbyRegulationGandItem10(e)ofRegulationS-Kregardingnon-GAAPmeasurescanbefoundinourmostrecentForm10-KandourForm8-KfurnishedasofthedateofthispresentationwiththeSEC,whichareavailableatwww.stock.walmart.com.

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Safeharborandnon-GAAPmeasures

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Metric FY22Guidanceat5.18.21 NewFY22GuidanceConsolidatednetsales Declinelowsingle-digitsinconstantcurrency

• Excludingdivestitures1,consolidatednetsalesgrowthuplow-to-midsingle-digits

Slightlypositiveinconstantcurrency• Excludingdivestitures1,consolidatednetsalesgrowthup6%to

7%,ormorethan$30billion

Compsalesgrowth • WalmartU.S.,uplowsingle-digits,ex.fuel• Sam’sClub,uplowsingle-digits,ex.fuelandtobacco

• WalmartU.S.,up5%to6%,ex.fuel• Sam’sClub,up7.5%to8.5%,ex.fuelandtobacco

WalmartInternationalnetsales Decline20%-25%inconstantcurrencyduetodivestitures1

• Increasemidsingle-digits,excludingdivestitures1Decline21.5%to22.5%inconstantcurrencyduetodivestitures1

• Increase7%to8%,excludingdivestitures1

Consolidatedexpenseleverage Maintainrate,orslightlyleverage Slightlyleverage

Consolidatedoperatingincome Increasemidsingle-digitsinconstantcurrency• Increasehighsingle-digits,excludingdivestitures1,inconstant

currency

Increase9%to11.5%inconstantcurrency• Increase11.5%to14%,excludingdivestitures1,inconstant

currency

WalmartU.S.operatingincome Increasehighsingle-digits Increase11%to13.5%

Effectivetaxrate 24.5%to25.5% Nochange

EPS Increasehighsingle-digits• Increaselowdouble-digits,excludingdivestitures1 $6.20to$6.35

Capitalexpenditures Around$14billion Nochange

1WecompletedthesalesofWalmartArgentinainNovember2020,AsdainFebruary2021andSeiyuinMarch2021.

Fiscal2022Q3andfull-yearguidanceThefollowingguidancereflectsthecompany’supdatedexpectationsforQ3andfiscalyear2022andisprovidedonanon-GAAPbasisasthecompanycannotpredictcertainelementswhichareincludedinreportedGAAPresults,includingtheimpactofforeignexchangetranslationandexternallyadjusteditems.Prioryearresultsareonanadjustedbasis.Thecompany’supdatedguidanceassumescontinuedstrengthintheU.S.economyandnosignificantadditionalgovernmentstimulusfortheremainderoftheyear.

Metric Q3FY22GuidanceCompsalesgrowth WalmartU.S.,up6%-7%,ex.fuel

EPS $1.30to$1.40

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Totalrevenue

$141.0+2.4%

Totalrevenue,constantcurrency1,2

$138.6+0.6%

MembershipandOtherIncome

$1.2+28.2%

Netsales

$139.9+2.2%

Netsales,constantcurrency1,2

$137.5+0.5%

Grossprofitrate2

24.8%-15bps

Operatingexpenseasapercentageofnetsales2

20.4%-81bps

Operatingincome2

$7.4+21.4%

Adj.operatingincome,constantcurrency1,2

$7.2+10.6%

Effectivetaxrate

26.3%+79bps

EPS

$1.52-33.0%

AdjustedEPS1

$1.78+14.1%

WalmartInc.-Q2FY22Dollarsinbillions,exceptpershare.Changeiscalculatedasthechangeversustheprioryearcomparableperiod

1Seepressreleaselocatedatwww.stock.walmart.comandreconciliationsattheendofpresentationregardingnon-GAAPfinancialmeasures.2WhenremovingthedivestituresofU.K.,JapanandArgentina:

• Totalrevenueinconstantcurrencywouldhaveincreased7.6%,excluding$8.9billioninQ2fiscal2021.• WalmartInternationaleCommercenetsalesinconstantcurrencywouldhaveincreased86%,excluding$1.2billioninQ2fiscal2021.• Grossprofitratewouldhavedecreased22bps,excludingabenefitof7bpsduetothedivestitures.• Operatingexpenseasapercentageofnetsaleswouldhavedecreased78bps,excludinga3bpsbenefitduetothedivestitures.• OperatingincomeinconstantcurrencyandAdj.Operatingincomeinconstantcurrencywouldhaveincreased24.1%and15.1%,respectively,excluding$256millioninQ2fiscal2021.

Adj.operatingincome,constantcurrency1,2

$7.2+10.6%

1DebttototalcapitalizationcalculatedasofJuly31,2021.Debtincludesshort-termborrowings,long-termdebtduewithinoneyear,financeleaseobligationsduewithinoneyear,long-termdebtandlong-termfinanceleaseobligations.TotalcapitalizationincludesdebtandtotalWalmartshareholders'equity.

2Calculatedforthetrailing12monthsendedJuly31,2021.ForROI,seereconciliationsattheendofpresentationregardingnon-GAAPfinancialmeasures.5

Receivables,net Debttocapitalization1

$6.1 36.5%+19.4% -440bps

Inventories Returnonassets2

$47.8 4.4%+16.2% -330bps

Accountspayable Returnoninvestment2

$49.6 14.8%+7.1% +130bps

WalmartInc.-Q2FY22Dollarsinbillions.Changeiscalculatedasthechangeversustheprioryearcomparableperiod

1Seepressreleaselocatedatwww.stock.walmart.comandreconciliationsattheendofthispresentationregardingnon-GAAPfinancialmeasures.2$15.2billionremainingof$20billionauthorizationapprovedinFebruary2021.Thecompanyrepurchasedapproximately17millionsharesinQ2fiscal2022. 6

Operatingcashflow Dividends

$12.4 $3.1-$6.5 ($1.5in2Q22)

Capitalexpenditures Sharerepurchases2

$5.0 $5.2+$1.5 ($2.4in2Q22)

Freecashflow1 Totalshareholderreturns

$7.4 $8.3-$8.0 ($3.9in2Q22)

WalmartInc.-YTDQ2FY22Dollarsinbillions.Dollarchangesmaynotrecalculateduetorounding.Changeiscalculatedasthechangeversustheprioryearcomparableperiod

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NetSales

$98.2+5.3%

eCommercenetsalesgrowth

+6%

eCommercecontributiontocomp1,2

~20bps

Inventory

Total:+20%

Comparablesales1,2

5.2%Comparabletransactions

6.1%Comparableaverageticket

-0.8%

• eCommercesalesmorethandoubled,up103%,overthepasttwoyears

• WalmartConnectadvertisingsalesincreased95%;rampingnewadvertisers

• Compsalesbetterthanexpectedreflectingstrongunderlyingbusinesstrends,arobustU.S.economyandstimulusspending

• Compsalesup14.5%ontwo-yearstack

• Compsalesgainsincreasedeachmonththroughquarter,withJulythestrongest

• In-storetransactionsacceleratedinQ2

• Compticketincreased~26%ontwo-yearstack

Remodels:187stores

Pickup:~3,900locations

Same-daydelivery:~3,250stores

• Increaseincludeslappinglastyear'sCOVID-relatedeffectsoninventoryaswellasstrongsalesgrowththisyear

1Compsalesforthe13-weekperiodendedJuly30,2021comparedtothe13-weekperiodendedJuly31,2020,andexcludesfuel.2Theresultsofnewacquisitionsareincludedinourcompsalesmetricsinthe13thmonthafteracquisition.

WalmartU.S.-Q2FY22Dollarsinbillions.Changeiscalculatedasthechangeversustheprioryearcomparableperiod

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Grossprofitrate

+20bps

Operatingincome

$6.1+20.4%

Operatingexpenserate

-49bps

• BenefitedfromCOVIDvaccinesthisyearandlappinglastyear'sCOVID-relatedclosuresofAutoCareCentersandVisionCenters

• AlsobenefitedfromlowermarkdownsandWalmartConnectadvertisingsales

• Partiallyoffsetbyincreasedsupplychaincosts

• Expenseleveragereflectsstrongsales,lowerCOVIDcostsandlappinglastyear'sbusinessrestructuringcharge(~40bps);partiallyoffsetbyinvestmentsinwages,marketingandtechnologyexpenses

• COVIDcostswerelowerby~$1billion;benefitedleverageby~100bps

Adj.operatingincome1

$6.1+12.0%

WalmartU.S.-Q2FY22Dollarsinbillions.Changeiscalculatedasthechangeversustheprioryearcomparableperiod

1Seepressreleaselocatedatwww.stock.walmart.comandreconciliationsattheendofpresentationregardingnon-GAAPfinancialmeasures.

WalmartU.S.-quarterlymerchandisehighlights

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Category Compsales Details

Grocery +midsingle-digit

• Salesgrowthof6%reflectedstrongmarketsharegains(accordingtoNielsen)andmodestticketinflation;salesacceleratedthroughthequarterandincreasedlowdouble-digitsonatwo-yearstackedbasis

• Foodcategoriessawbroad-basedstrengthwithlow-teensgrowthonatwo-yearstack;aidedbystrongpricepositioning,anelevatedfreshofferingandbetterin-stocks

• Consumablescategoriesreflectedstrengthinpets,beautyandbabyproducts

Health&wellness +mid-teens • Strongsalesreflectedlappinglastyear'sCOVID-relatedclosuresofVisionCenters,thisyear'svaccineadministrationandbrandeddruginflation

Generalmerchandise +lowsingle-digit

• Lappinglastyear'sstimulus-drivengrowth;Q2salesincreasedmid-teenspercentageonatwo-yearstackedbasis

• Strengthinapparelandtravel-relatedcategoriesascustomersincreasesocialization• Automotivecategoriesbenefitedfromlappinglastyear'sCOVID-relatedclosuresofAuto

CareCenters• SolidstartinBack-to-Schoolcategories

• Positivelyaffectedby20bpsfromdivestitures

• Retainedmarketoperatingexpenserateleveraged65bpsfromstrongsalesgrowthandlappinglastyear'sdiscretetaxitem.OffsetbyimpactofCOVID-relatedsalesrestrictions

• RetainedmarketCOVID-relatedcostswerelowerby~$36mil.andbenefitedleverageby~24bps

• Divestituresaccountedforareductionof$1.7billionYoY

• Increaseincludesstrongsalesgrowththisyearandlappinglastyear'sCOVID-relatedeffectsoninventory

101Seepressreleaselocatedatwww.stock.walmart.comandreconciliationsattheendofpresentationregardingnon-GAAPfinancialmeasures.

Inventory

$9.3+5.5%

Grossprofitrate

-76bpsOperatingincome

$0.9+6.0%

Netsales,constantcurrency1

$20.6-24.0%


-85bps

Operatingincome,constantcurrency1

$0.7-12.4%

• Negativelyaffectedby35bpsfromdivestitures

• Retainedmarketgrossprofitratedecreased41bpsduetomixshifttolowermarginformats,partiallyoffsetbymarkdownoptimization

Netsales

$23.0-15.2%

WalmartInternational-Q2FY22Dollarsinbillions.Dollarchangesmaynotrecalculateduetorounding.Changeiscalculatedasthechangeversustheprioryearcomparableperiod


• Retainedmarketgrowthof25.8%

• Divestituresaccountedforareductionof$256millionYoY


• Divestituresaccountedforareductionof$256millionYoY


Adj.operatingincome1

$0.9-3.1%

Adj.operatingincome,constantcurrency1

$0.7-20.0%


• Retainedmarketgrowthof12.7%:◦ StrongsalesgrowthinFlipkart,

MexicoandChina◦ Lappingtightergovernment-

mandatedrestrictionslastyear,largelyinIndia

◦ eCommercenetsalescontributed19%oftotalnetsales


• SalesofgeneralmerchandiselimitedbyCOVID-relatedrestrictionsonnon-essentialcategories;two-yearstackcompsales+10.4%

• Asrestrictionslifted,Q2endedwithpositiveYoYsalesgrowth

• eCommercenetsales+41%

1WalmexincludestheconsolidatedresultsofMexicoandCentralAmerica2ANTAD-AsociacionNacionaldeTiendasdeAutoservicioyDepartamentales;TheNationalAssociationofSupermarketsandDepartmentStores

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Walmex1 China Canada

Netsalesgrowth +6.7% +6.0% -3.7%

Comparablesales +5.4% +2.9% -3.6%

Comparabletransactions +7.6% +0.1% +5.2%

Comparableticket -2.1% +2.7% -8.4%

• Growthinapparelandgeneralmerchandise,whilefoodandconsumablesweresofter

• InMexico,compsalesincreased+4.7%

• CompsalesoutpacedANTAD2self-serviceandclub

• MexicoeCommercenetsales+13%

• StrongsalesinSam'sClub,partiallyoffsetbysoftertrafficinHypermarkets

• Sam'sClubdelivereddouble-digitcompsalesgrowthwithnewmembersign-upsmorethandoublingYoY

• eCommercenetsales+75%

WalmartInternational-Q2FY22Resultsarepresentedonaconstantcurrencybasis.Netsalesandcompsalesarepresentedonanominal,calendarbasisandincludeeCommerceresults.Changeiscalculatedasthechangeversustheprioryearcomparableperiod.

• COVID-relatedrestrictionsresultedinnegativesalesgrowth,impactingoperatingcosts,alongwithinvestmentsineCommerce

• HigherpenetrationofSam'sClubloweroperatingexpenseformatandcostdiscipline

• SoftgeneralmerchandisesalesaffectedbyCOVID-relatedrestrictions

1WalmexincludestheconsolidatedresultsofMexicoandCentralAmerica.

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Walmex1 China Canada

Grossprofitrate SlightIncrease Decrease Decrease

• Changeinmixtohighermargincategoriesalongwithcostofgoodssavingsinitiatives

• ChangeinmixtolowermarginformatsofSam'sClubandeCommerce

Operatingexpenserate SlightIncrease Decrease Increase

Operatingincome$ Increase Increase Decrease

WalmartInternational-Q2FY22Resultsarepresentedonaconstantcurrencybasis.Changeiscalculatedasthechangeversustheprioryearcomparableperiod

• Investmentsinassociates'valueproposition,technology,andeCommerceexpansion,partiallyoffsetbylappinglastyear'sdiscretetaxitem

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+7.7%Comparablesales

+5.1%Comparabletransactions

+2.5%Averagecomparableticket

~180bpseCommercecontribution

$16,437+8%

Netsales

+12.2%Membershipincome

-29.9999999999998bps

Grossprofitrate

-21.9999999999999bps


$5759.1%

Operatingincome

WithFuel WithoutFuel

Comparablesales1

+13.9%

Netsales

$18.6+13.9%

eCommercenetsalesgrowth

+27%

Comparablesales

+13.9%

Membershipincome

+12.2%

Grossprofitrate

-88bps


-82bps

Inventory

$4.8+14.0%

Operatingincome

$0.7+11.5%

• Strongmembershiptrendswithrecordtotalmembercount

• Renewalratesincreasedalmost260bpswithPlusmemberrenewalrateincreasingover455bps

• Pluspenetrationincreasedover755bps,reachinganall-timehigh

• Firstyearmemberrenewalsremainsolid

• Higherfuelsalespositivelyaffectedoperatingexpenseleverage

• Wageinvestmentsandlowertobaccosalessomewhatoffsetthattailwind

• COVID-relatedcostswerelowerby~$80mil.andbenefitedexpenseleverageby~50bps

• Unfavorablefuelmixandlowerfuelratenegativelyimpactedgrossprofit

• Excludingfuel,costinflationandstrategicinvestmentsinpricewerepartiallyoffsetbyfavorablechangesinmix

• Strongcurbsideperformanceandsoliddirect-to-homecontribution

• Strongcompsalesgrowthwithcontributionfrombothtransactionsandticketandabenefitfromstimulusspending

• Onatwo-yearstack,compsalesincreased22.6%

• Broadstrengthacrosscategories,ledbyfood

• Tobacconegativelyaffectedcompsales

1Compsalesforthe13-weekperiodendedJuly30,2021comparedtothe13-weekperiodendedJuly31,2020.

• Increasereflectsinventorybuildtosupporthighersalestrendsandlappinglastyear'sCOVID-relatedeffectsoninventory

Sam'sClub-Q2FY22Dollarsinbillions.Changeiscalculatedasthechangeversustheprioryearcomparableperiod

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$18,644+13.9%NetSales

+33%eCommercenetsalesgrowth

+13.9%Comparablesales

-87.9999999999999bps

Grossprofitrate

-82bpsOperatingexpenserate

$66011.5%

Operatingincome

WithoutFuel

Netsales

$16.4+7.7%


-22bps

Grossprofitrate

-30bps

Operatingincome

$0.6+9.1%

Comparabletransactions

+5.1%

Comparablesales1,2

+7.7%

eCommercecontribution

~180bps

Averagecomparableticket

+2.5%

1Compsalesforthe13-weekperiodendedJuly30,2021comparedtothe13-weekperiodendedJuly31,2020,andexcludesfuel.2Tobacconegativelyaffectedcompsalesforthe13-weekperiodendedJuly30,2021by290basispoints.Onatwo-yearstack,tobacconegativelyaffectedcompsalesby680basispoints.

Sam'sClub-Q2FY22Dollarsinbillions.Changeiscalculatedasthechangeversustheprioryearcomparableperiod

• Onatwo-yearstack,averagecompticketincreased6.8%

• Onatwo-yearstack,compsalesincreased21.0%

• Onatwo-yearstack,comptransactionsincreased13.8%

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Category Compsales Details

Fresh/Freezer/Cooler +lowdouble-digit • Freshmeat,preparedfoods,produceandfloralperformedwell

Groceryandbeverage +mid-teens • Drinks,snacks,candyandadultbeverageshowedstrength

Consumables +highsingle-digit • Tabletop,laundry&homecare,petsuppliesandbabycareperformedwell

Homeandapparel +lowdouble-digit • Strengthintires,apparel,jewelryandfurniture

Technology,officeandentertainment -midsingle-digit

• TVsperformedwellbutweremorethanoffsetbyreducedmobilephonesales• Sam'senteredintoanewstrategicarrangementinitsmobilephonebusinessandno

longerrecognizesthefulltransactionvalue;instead,itreceivesacommissiononeachsale

• Asidefromthemobilephonebusiness,compsaleswereslightlypositive

Healthandwellness +midsingle-digit • Opticalandpharmacywerestrong

Sam'sClub-quarterlyfinancialhighlights

WeincludeReturnonAssets("ROA"),whichiscalculatedinaccordancewithU.S.generallyacceptedaccountingprinciples("GAAP")aswellasReturnonInvestment("ROI")asmeasurestoassessreturnsonassets.ManagementbelievesROIisameaningfulmeasuretosharewithinvestorsbecauseithelpsinvestorsassesshoweffectivelyWalmartisdeployingitsassets.TrendsinROIcanfluctuateovertimeasmanagementbalanceslong-termstrategicinitiativeswithpossibleshort-termimpacts.WeconsiderROAtobethefinancialmeasurecomputedinaccordancewithGAAPthatisthemostdirectlycomparablefinancialmeasuretoourcalculationofROI.

ROAwas4.4percentand7.7percentforthetrailing12monthsendedJuly31,2021and2020,respectively.ThedecreaseinROAwasprimarilyduetothelossesondivestitureofouroperationsintheU.K.,JapanandArgentinaaswellasnetfairvaluechangesinourequityinstruments,partiallyoffsetbytheincreaseinoperatingincome.ROIwas14.8percentand13.5percentforthetrailingtwelvemonthsendedJuly31,2021and2020.TheincreaseinROIwasprimarilyduetotheincreaseinoperatingincome.

WedefineROIasadjustedoperatingincome(operatingincomeplusinterestincome,depreciationandamortization,andrentexpense)forthetrailingtwelvemonthsdividedbyaverageinvestedcapitalduringthatperiod.Weconsideraverageinvestedcapitaltobetheaverageofourbeginningandendingtotalassets,plusaverageaccumulateddepreciationandaverageamortization,lessaverageaccountspayableandaverageaccruedliabilitiesforthatperiod.

OurcalculationofROIisconsideredanon-GAAPfinancialmeasurebecausewecalculateROIusingfinancialmeasuresthatexcludeandincludeamountsthatareincludedandexcludedinthemostdirectlycomparableGAAPfinancialmeasure.Forexample,weexcludetheimpactofdepreciationandamortizationfromourreportedoperatingincomeincalculatingthenumeratorofourcalculationofROI.Asmentionedabove,weconsiderROAtobethefinancialmeasurecomputedinaccordancewithgenerallyacceptedaccountingprinciplesmostdirectlycomparabletoourcalculationofROI.ROIdiffersfromROA(whichisconsolidatednetincomefortheperioddividedbyaveragetotalassetsfortheperiod)becauseROI:adjustsoperatingincometoexcludecertainexpenseitemsandaddsinterestincome;adjuststotalassetsfortheimpactofaccumulateddepreciationandamortization,accountspayableandaccruedliabilitiestoarriveattotalinvestedcapital.Becauseoftheadjustmentsmentionedabove,webelieveROImoreaccuratelymeasureshowwearedeployingourkeyassetsandismoremeaningfultoinvestorsthanROA.AlthoughROIisastandardfinancialmeasure,numerousmethodsexistforcalculatingacompany'sROI.Asaresult,themethodusedbymanagementtocalculateourROImaydifferfromthemethodsusedbyothercompaniestocalculatetheirROI.

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Non-GAAPmeasures-ROI

ThecalculationofROAandROI,alongwithareconciliationofROItothecalculationofROA,isasfollows:

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3 Upon adoption of ASU 2016-02, Leases, a factor of eight times rent is no longer included in the calculation of ROI on a prospective basis as operating lease assets are now recorded on the Consolidated Balance Sheet.

1 The average is based on the addition of the account balance at the end of the current period to the account balance at the end of the prior period and dividing by 2.

2 The average is based on the addition of 'total assets without leased assets, net' at the end of the current period to 'total assets without leased assets, net' at the end of the prior period and dividing by 2, plus 'leased assets, net' at the end of the current period.

3 The average is based on the addition of 'accumulated depreciation and amortization, without leased assets' at the end of the current period to 'accumulated depreciation and amortization, without leased assets' at the end of the prior period and dividing by 2, plus 'accumulated amortization on leased assets' at the end of the current period.

NP = not provided

CALCULATIONOFRETURNONASSETS CALCULATIONOFRETURNONINVESTMENT

TrailingTwelveMonths TrailingTwelveMonths

Ended July31, Ended July31,(Dollarsinmillions) 2021 2020 (Dollarsinmillions) 2021 2020Numerator NumeratorConsolidatednetincome $ 10,368 $ 18,128 Operatingincome $ 25,528 $ 21,323Denominator +Interestincome 122 151Averagetotalassets1 $ 237,967 $ 236,122 +Depreciationandamortization 10,892 11,113Returnonassets(ROA) 4.4% 7.7% +Rent 2,451 2,679

ROIoperatingincome $ 38,993 $ 35,266

July31, DenominatorCertainBalanceSheetData 2021 2020 2019 Averagetotalassets1 $ 237,967 $ 236,122

Totalassets $ 238,552 $ 237,382 $ 234,861'+Averageaccumulateddepreciationandamortization1 97,685 93,418

Accumulateddepreciationandamortization 98,346 97,023 89,813 '-Averageaccountspayable1 47,964 46,099Accountspayable 49,601 46,326 45,871 '-Averageaccruedliabilities1 23,842 22,230

Accruedliabilities 23,915 23,768 20,691 Averageinvestedcapital $ 263,846 $ 261,211

Returnoninvestment(ROI) 14.8% 13.5%

1Theaverageisbasedontheadditionoftheaccountbalanceattheendofthecurrentperiodtotheaccountbalanceattheendofthepriorperiodanddividingby2.

Non-GAAPmeasures-ROI(cont.)

1"Netcashprovidedby(usedin)investingactivities"includespaymentsforpropertyandequipment,whichisalsoincludedinourcomputationoffreecashflow.

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Wedefinefreecashflowasnetcashprovidedbyoperatingactivitiesinaperiodminuspaymentsforpropertyandequipmentmadeinthatperiod.Wehadnetcashprovidedbyoperatingactivitiesof$12.4billionforthesixmonthsendedJuly31,2021,whichdecreasedwhencomparedto$19.0billionforthesixmonthsendedJuly31,2020primarilyduetoanincreaseininventorypurchasesdueinparttolappingtheimpactofacceleratedinventorysell-throughinthefirsthalfoffiscal2021.Wegeneratedfreecashflowof$7.4billionforthesixmonthsendedJuly31,2021,whichdecreasedwhencomparedto$15.4billionforthesixmonthsendedJuly31,2020duetothesamereasonsasthedecreaseinnetcashprovidedbyoperatingactivities,aswellas$1.5billioninincreasedcapitalexpenditures.

Freecashflowisconsideredanon-GAAPfinancialmeasure.Managementbelieves,however,thatfreecashflow,whichmeasuresourabilitytogenerateadditionalcashfromourbusinessoperations,isanimportantfinancialmeasureforuseinevaluatingthecompany’sfinancialperformance.Freecashflowshouldbeconsideredinadditionto,ratherthanasasubstitutefor,consolidatednetincomeasameasureofourperformanceandnetcashprovidedbyoperatingactivitiesasameasureofourliquidity.Additionally,Walmart’sdefinitionoffreecashflowislimited,inthatitdoesnotrepresentresidualcashflowsavailablefordiscretionaryexpenditures,duetothefactthatthemeasuredoesnotdeductthepaymentsrequiredfordebtserviceandothercontractualobligationsorpaymentsmadeforbusinessacquisitions.Therefore,webelieveitisimportanttoviewfreecashflowasameasurethatprovidessupplementalinformationtoourConsolidatedStatementsofCashFlows.Althoughothercompaniesreporttheirfreecashflow,numerousmethodsmayexistforcalculatingacompany’sfreecashflow.Asaresult,themethodusedbyWalmart’smanagementtocalculateourfreecashflowmaydifferfromthemethodsusedbyothercompaniestocalculatetheirfreecashflow.

Thefollowingtablesetsforthareconciliationoffreecashflow,anon-GAAPfinancialmeasure,tonetcashprovidedbyoperatingactivities,whichwebelievetobetheGAAPfinancialmeasuremostdirectlycomparabletofreecashflow,aswellasinformationregardingnetcashusedininvestingactivitiesandnetcashusedinfinancingactivities.

SixMonthsEndedJuly31,

(Dollarsinmillions) 2021 2020

Netcashprovidedbyoperatingactivities $ 12,423 $ 18,956

Paymentsforpropertyandequipment(capitalexpenditures) (5,019) (3,569)

Freecashflow $ 7,404 $ 15,387

Netcashprovidedby(usedin)investingactivities1 $ 2,402 $ (3,634)

Netcash(usedin)providedbyfinancingactivities (11,559) (7,814)

Non-GAAPmeasures-freecashflow

1Changeversusprioryearcomparableperiod.2WalmartInternationaleCommercenetsaleswere$4.1billionand$8.4billionforthethreeandsixmonthsendedJuly31,2021,andwerepositivelyimpactedby$258millionand$375

millionofcurrencyexchangeratefluctuations,respectively.WalmartInternationaleCommercenetsaleswere$3.3billionand$6.2billionforthethreeandsixmonthsendedJuly31,2020,respectively.

3WalmartInternationaleCommercenetsalesincreased26%onareportedbasisand16%inconstantcurrencyandincreased37%onareportedbasisand30%inconstantcurrencyforthethreeandsixmonthsendingJuly31,2021,respectively.

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Indiscussingouroperatingresults,thetermcurrencyexchangeratesreferstothecurrencyexchangeratesweusetoconverttheoperatingresultsforcountrieswherethefunctionalcurrencyisnottheU.S.dollarintoU.S.dollars.Wecalculatetheeffectofchangesincurrencyexchangeratesasthedifferencebetweencurrentperiodactivitytranslatedusingthecurrentperiod’scurrencyexchangeratesandthecomparableprioryearperiod’scurrencyexchangerates.Additionally,nocurrencyexchangeratefluctuationsarecalculatedfornon-USDacquisitionsuntilownedfor12months.Throughoutourdiscussion,werefertotheresultsofthiscalculationastheimpactofcurrencyexchangeratefluctuations.Whenwerefertoconstantcurrencyoperatingresults,thismeansoperatingresultswithouttheimpactofthecurrencyexchangeratefluctuations.ThedisclosureofconstantcurrencyamountsorresultspermitsinvestorstobetterunderstandWalmart’sunderlyingperformancewithouttheeffectsofcurrencyexchangeratefluctuations.Thetablebelowreflectsthecalculationofconstantcurrencyfortotalrevenues,netsalesandoperatingincomeforthethreeandsixmonthsendedJuly31,2021.

ThreeMonthsEndedJuly31,2021 SixMonthsEndedJuly31,2021

2021PercentChange1 2021

PercentChange1 2021

PercentChange1 2021

PercentChange1

(Dollarsinmillions) WalmartInternational Consolidated WalmartInternational ConsolidatedTotalrevenues:Asreported $ 23,389 -14.7% $ 141,048 2.4% $ 51,058 -11.1% $ 279,358 2.6%Currencyexchangeratefluctuations (2,426) N/A (2,426) N/A -3,353 N/A -3,353 N/AConstantcurrencytotalrevenues $ 20,963 -23.5% $ 138,622 0.6% $ 47,705 -17.0% $ 276,005 1.3%

Netsales2,3:Asreported $ 23,035 -15.2% $ 139,871 2.2% $ 50,335 -11.6% $ 277,030 2.4%Currencyexchangeratefluctuations (2,397) N/A (2,397) N/A -3,310 N/A -3,310 N/AConstantcurrencynetsales $ 20,638 -24.0% $ 137,474 0.5% $ 47,025 -17.4% $ 273,720 1.2%

Operatingincome:Asreported $ 861 6.0% $ 7,354 21.4% $ 2,055 27.0% $ 14,263 26.4%Currencyexchangeratefluctuations (150) N/A (150) N/A -201 N/A -201 N/AConstantcurrencyoperatingincome $ 711 -12.4% $ 7,204 18.9% $ 1,854 14.6% $ 14,062 24.6%

Non-GAAPmeasures-constantcurrency

1Reflects a business restructuring charge resulting from changes to Walmart U.S. support teams to better support its omni-channel strategy recorded in the second quarter of fiscal 2021.

2Change versus prior year comparable period.NP - not provided

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Adjusted operating income is considered a non-GAAP financial measure under the SEC’s rules because it excludes certain charges included in operating income calculated in accordance with GAAP. Management believes that adjusted operating income is a meaningful measure to share with investors because it best allows comparison of the performance with that of the comparable period. In addition, adjusted operating income affords investors a view of what management considers Walmart’s core earnings performance and the ability to make a more informed assessment of such core earnings performance as compared with that of the prior year.

When we refer to adjusted operating income in constant currency this means adjusted operating results without the impact of the currency exchange rate fluctuations. The disclosure of constant currency amounts or results permits investors to better understand Walmart’s underlying performance without the effects of currency exchange rate fluctuations. The tables below reflect the calculation of adjusted operating income and adjusted operating income in constant currency for the three and six months ended July 31, 2021 and 2020.

ThreeMonthsEndedJuly31, SixMonthsEndedJuly31,

WalmartUS WalmartInternational Consolidated WalmartUS Walmart

International Consolidated

2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020Operatingincome:Operatingincome,asreported 6,089 5,057 861 812 7,354 6,059 11,544 9,359 2,055 1,618 14,263 11,283Businessrestructuringcharge1 — 380 — — — 380 380 — — — 380

Discretetaxitem — — — 77 — 77 — — 77 — 77

Adjustedoperatingincome 6,089 5,437 861 889 7,354 6,516 11,544 9,739 2,055 1,695 14,263 11,740Percentchange2 12.0% NP -3.1% NP 12.9% NP 18.5% NP 21.2% NP 21.5% NPCurrencyexchangeratefluctuations — — (150) — (150) — — — (201) — (201) —

Adjustedoperatingincome,constantcurrency 6,089 5,437 711 889 7,204 6,516 11,544 9,739 1,854 1,695 14,062 11,740

Percentchange2 12.0% NP -20.0% NP 10.6% NP 18.5% NP 9.4% NP 19.8% NP

Non-GAAPmeasures-adjustedoperatingincome

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AdjusteddilutedearningspershareattributabletoWalmart(AdjustedEPS)isconsideredanon-GAAPfinancialmeasureundertheSEC’srulesbecauseitexcludescertainamountsincludedinthedilutedearningspershareattributabletoWalmartcalculatedinaccordancewithGAAP(EPS),themostdirectlycomparablefinancialmeasurecalculatedinaccordancewithGAAP.ManagementbelievesthatAdjustedEPSisameaningfulmeasuretosharewithinvestorsbecauseitbestallowscomparisonoftheperformancewiththatofthecomparableperiod.Inaddition,AdjustedEPSaffordsinvestorsaviewofwhatmanagementconsidersWalmart’scoreearningsperformanceandtheabilitytomakeamoreinformedassessmentofsuchcoreearningsperformancewiththatoftheprioryear.

Weadjustfortheunrealizedandrealizedgainsandlossesonourequityinvestmentseachquarterbecausealthoughtheinvestmentsarestrategicdecisionsforthecompany’sretailoperations,management’smeasurementofeachstrategyisprimarilyfocusedontheoperationalresultsratherthanthefairvalueofsuchinvestments.Additionally,managementdoesnotforecastchangesinthefairvalueofitsequityinvestments.Accordingly,managementadjustsEPSeachquarterfortherealizedandunrealizedgainsandlossesrelatedtothoseequityinvestments.

WehavecalculatedAdjustedEPSforthethreeandsixmonthsendedJuly31,2021byadjustingEPSforthefollowing:

1. unrealizedandrealizedgainsandlossesonthecompany’sequityinvestments;and

2. theincrementallossonsaleofouroperationsintheU.KandJapanrecordedduringthefirstquarteroffiscal2022.

Non-GAAPmeasures-adjustedEPS

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1Changeversusprioryearcomparableperiod.2Calculatedbasedonnatureofitem,includinganyrealizabledeductions,andstatutoryrateineffectforrelevantjurisdictions.Minimalrealizabletaxbenefitwasprovidedinconnectionwiththeincrementallossonsale.

3Thereportedeffectivetaxratewas26.3%and26.5%forthethreeandsixmonthsendedJuly31,2021,respectively.Adjustedfortheaboveitems,theeffectivetaxratewas25.6%and24.5%forthethreeandsixmonthsendedJuly31,2021,respectively.

4QuarterlyadjustmentsoradjustedEPSmaynotsumtoYTDadjustmentsorYTDadjustedEPSduetorounding.

ThreeMonthsEndedJuly31,2021PercentChange1 SixMonthsEndedJuly31,20214

PercentChange1

Dilutedearningspershare:

ReportedEPS $ 1.52 -33.0% $ 2.48 -32.4%

Adjustments:Pre-TaxImpact

TaxImpact2,3

NetImpact

Pre-TaxImpact

TaxImpact2,3

NetImpact

Unrealizedandrealized(gains)andlossesonequityinvestments $ 0.34 $ (0.08) $ 0.26 $ 1.07 $ (0.22) $ 0.85

IncrementallossonsaleofouroperationsintheU.K.andJapan — — — 0.15 — 0.15

Netadjustments $ 0.26 $ 1.00

AdjustedEPS $ 1.78 14.1% $ 3.48 27.0%

Non-GAAPmeasures-adjustedEPS(cont.)

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AspreviouslydisclosedinoursecondquarterendedJuly31,2020pressrelease,wehavecalculatedAdjustedEPSforthethreeandsixmonthsendedJuly31,2020byadjustingEPSforthefollowing:(1)unrealizedgainsandlossesontheCompany’sequityinvestments;(2)abusinessrestructuringchargeresultingfromchangestocorporatesupportteamstobettersupporttheWalmartU.S.omnichannelstrategy;and(3)adiscretetaxitem.

ThreeMonthsEndedJuly31,2020 SixMonthsEndedJuly31,20204

Dilutedearningspershare:

ReportedEPS $ 2.27 $ 3.67

Adjustments:Pre-TaxImpact

TaxImpact1,2 NCIImpact3 NetImpact

Pre-TaxImpact

TaxImpact1,2 NCIImpact3 NetImpact

Unrealized(gains)andlossesonequityinvestments $ (1.13) $ 0.24 $ — $ (0.89) $ (1.41) $ 0.30 $ — $ (1.11)

Businessrestructuringcharge 0.13 (0.03) — 0.10 0.13 (0.03) — 0.10

Discretetaxitem 0.06 0.05 (0.03) 0.08 0.06 0.05 (0.03) 0.08

Netadjustments $ (0.71) $ (0.93)

AdjustedEPS $ 1.56 $ 2.74

Non-GAAPmeasures-adjustedEPS(cont.)

1Calculatedbasedonnatureofitem,includinganyrealizabledeductions,andstatutoryrateineffectforrelevantjurisdictions.2Thereportedeffectivetaxratewas25.5%and25.1%forthethreeandsixmonthsendedJuly31,2020,respectively.Whenadjustedfortheaboveitems,theeffectivetaxratewas24.8%and24.9%forthethreeandsixmonthsendedJuly31,2020,respectively.3Calculatedbasedontheownershippercentagesofournoncontrollinginterests.4QuarterlyadjustmentsoradjustedEPSmaynotsumtoYTDadjustmentsorYTDadjustedEPSduetorounding.

• Unitcounts&squarefootage• Comparablestoresales,includingandexcludingfuel• Terminology

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Additionalresourcesatstock.walmart.com

earnings presentation (fy22 q2)

Documents