Walmart 2009 Annual Report Download - page 17

Overview
Wal-Mart Stores, Inc. (“Wal-Mart,” the “Company” or “we”) operates
retail stores in various formats around the world and is committed
to saving people money so they can live better. We earn the trust of
our customers every day by providing a broad assortment of quality
merchandise and services at every day low prices (“EDLP”), while
fostering a culture that rewards and embraces mutual respect, integ-
rity and diversity. EDLP is our pricing philosophy under which we
price items at a low price every day so that our customers trust that
our prices will not change under frequent promotional activity. Our
focus for Sam’s Club is to provide exceptional value on brand-name
merchandise at “members only” prices for both business and per-
sonal use. Internationally, we operate with similar philosophies.
Our  scal year ends on January 31.
We intend for this discussion to provide the reader with information
that will assist in understanding our  nancial statements, the changes
in certain key items in those  nancial statements from year to year,
and the primary factors that accounted for those changes, as well as
how certain accounting principles a ect our  nancial statements.
We also discuss certain performance metrics that management uses
to assess our performance. The discussion also provides information
about the  nancial results of the various segments of our business
to provide a better understanding of how those segments and their
results a ect the  nancial condition and results of operations of the
Company as a whole. This discussion should be read in conjunction
with our  nancial statements as of January 31, 2009, and the year
then ended and accompanying notes.
Throughout this Management’s Discussion and Analysis of Financial
Condition and Results of Operations, we discuss segment operating
income and comparable store sales. Segment operating income refers
to income from continuing operations before net interest expense,
income taxes and minority interest and excludes unallocated corpo-
rate overhead and results of discontinued operations. From time to
time, we revise the measurement of each segment’s operating income
as changes in business needs dictate. When we do, we restate all
periods presented for comparative purposes.
Comparable store sales is a measure which indicates the performance
of our existing stores by measuring the growth in sales for such stores
for a particular period over the corresponding period in the prior year.
In  scal 2008 and  scal 2007, our method of calculating comparable
store sales included all stores and clubs that were open for at least the
previous 12 months. Additionally, stores and clubs that were relocated,
expanded or converted were excluded from comparable store sales
for the  rst 12 months following the relocation, expansion or conver-
sion. During  scal year 2008, the Company reviewed its de nition of
comparable store sales for consistency with other retailers. For  scal
year 2009, beginning February 1, 2008, Wal-Mart revised its de nition
of comparable store sales to include sales from stores and clubs
open for the previous 12 months, including remodels, relocations and
expansions. Changes in format continue to be excluded from compa-
rable store sales when the conversion is accompanied by a relocation
or expansion that results in a change in square footage of more than
 ve percent. Since the impact of this revision is inconsequential, the
Company will not restate comparable store sales results for previously
reported years. Comparable store sales are also referred to as “same-
store” sales by others within the retail industry. The method of calcu-
lating comparable store sales varies across the retail industry. As a
result, our calculation of comparable store sales is not necessarily
comparable to similarly titled measures reported by other companies.
Operations
Our operations comprise three business segments: Walmart U.S.,
International and Sam’s Club.
Our Walmart U.S. segment is the largest segment of our business,
accounting for 63.7% of our  scal 2009 net sales and operates stores
in three di erent formats in the United States, as well as its online
retail operations, walmart.com. Our Walmart U.S. retail formats include:
• Discount stores, which average approximately 108,000 square feet
in size and o er a wide assortment of general merchandise and a
limited variety of food products;
• Supercenters, which average approximately 186,000 square feet
in size and o er a wide assortment of general merchandise and
a full-line supermarket; and
• Neighborhood Markets, which average approximately 42,000 square
feet in size and o er a full-line supermarket and a limited assortment
of general merchandise.
At January 31, 2009, our International segment consisted of retail
operations in 14 countries and Puerto Rico. This segment generated
24.6% of our  scal 2009 net sales. The International segment includes
numerous di erent formats of retail stores and restaurants, including
discount stores, supercenters and Sam’s Clubs that operate outside
the United States.
Our Sam’s Club segment consists of membership warehouse clubs
in the United States and the segment’s online retail operations,
samsclub.com. Sam’s Club accounted for 11.7% of our  scal 2009
net sales. Our Sam’s Clubs average approximately 133,000 square
feet in size.
For certain  nancial information relating to our segments, see Note 11
to our Consolidated Financial Statements.
15Wal-Mart 2009 Annual Report
Management’s Discussion and Analysis of Financial
Condition and Results of Operations
SALES BY SEGMENT
Net sales in  scal 2009 were a record $401.2 billion,
up 7.2% from  scal 2008.
Sam’s Club 11.7%
International 24.6%
Walmart U.S. 63.7%