Walmart 2014 Annual Report Download - page 18

16 Walmart 2014 Annual Report
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 condent 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 ows. 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 specically
this new scal year.
At Walmart, we’re guided by our nancial priorities – growth, leverage and returns. Customers
want to shop on their terms. We’re focused on growth by providing customers a unied 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 scal 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 eectively, 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 scal 2014, with a 30 percent increase in sales. We’ll
continue to invest to enhance technology platforms and expand fulllment 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, exibility 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 scal 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 scal
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 eciencies in all
operations. Globally, our teams are identifying best practices and sharing these eciency 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 ve-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 nancial 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 Ocer
Wal-Mart Stores, Inc.
Our FY 2014
Financial Performance
“ At Walmart,
we’re guided
by our nancial
priorities – growth,
leverage and
returns.”
Charles Holley, Jr.