Walmart 2014 Annual Report Download - page 23

Management’s Discussion and Analysis of
Financial Condition and Results of Operations
Calendar Comparable Store and Club Sales
Comparable store and club sales is a metric that indicates the performance of our existing U.S. stores and clubs by measuring the change in sales
for such stores and clubs, including e-commerce sales, for a particular period over the corresponding period in the previous year. The retail industry
generally reports comparable store and club sales using the retail calendar (also known as the 4-5-4 calendar) and, to be consistent with the retail
industry, we provide comparable store and club sales using the retail calendar in our quarterly earnings releases. However, when we discuss our
comparable store and club sales below, we are referring to our calendar comparable store and club sales calculated using our scal calendar. As our
scal calendar diers from the retail calendar, our calendar comparable store and club sales also dier from the retail calendar comparable store
and club sales provided in our quarterly earnings releases. Calendar comparable store and club sales, as well as the impact of fuel, for scal 2014
and 2013, were as follows:
With Fuel Fuel Impact
Fiscal Years Ended January 31, Fiscal Years Ended January 31,
2014 2013 2014 2013
Walmart U.S. (0.6)% 2.0% 0.0% 0.0%
Sam’s Club 0.3% 4.1% (0.3)% 0.3%
Total U.S. (0.5)% 2.4% (0.1)% 0.1%
Comparable store and club sales in the U.S., including fuel, decreased 0.5% in scal 2014 and increased 2.4% in scal 2013, when compared to the
previous scal year. The total U.S. comparable store and club sales for scal 2014 were negatively impacted by lower consumer spending primarily due
to the slow recovery in general economic conditions, the 2% increase in the 2013 payroll tax rate, and the reduction in government food benets and
severe winter storms that occurred during the fourth quarter. These factors were partially oset by increased member trac at Sam’s Club primarily
coming from Savings Members. Additionally, e-commerce sales positively impacted Walmart U.S. comparable store and Sam’s Club comparable club
sales percentages by approximately 0.3%. The total U.S. comparable store and club sales for scal 2013 increased as a result of improved average ticket
and an increase in customer trac.
As we continue to add new stores and clubs in the U.S., we do so with an understanding that additional stores and clubs may take sales away from
existing units. We estimate the negative impact on comparable store and club sales as a result of opening new stores and clubs was approximately
0.8% and 0.7% in scal 2014 and 2013, respectively. Our estimate is calculated primarily by comparing the sales trends of the impacted stores and
clubs, which are identied based on their proximity to the new stores and clubs, to those of nearby non-impacted stores and clubs, in each case,
as measured after the new stores and clubs are opened.
Leverage
Operating Income
Fiscal Years Ended January 31,
(Amounts in millions) 2014 2013 2012
Operating Percent Percent Operating Percent Percent Operating Percent
Income of Total Change Income of Total Change Income of Total
Walmart U.S. $22,351 83.2% 4.0% $21,491 77.5% 5.4% $20,381 76.9%
Walmart International 5,454 20.3% (17.6)% 6,617 23.9% 8.2% 6,113 23.1%
Sam’s Club 1,975 7.3% 0.8% 1,960 7.1% 6.3% 1,844 7.0%
Corporate and support (2,908) (10.8)% 24.1% (2,343) (8.5)% 26.9% (1,847) (7.0)%
Operating income $26,872 100.0% (3.1)% $27,725 100.0% 4.7% $26,491 100.0%
We believe comparing both the growth of our operating expenses and our operating income to the growth of our net sales are meaningful measures
as they indicate how eectively we manage costs and leverage operating expenses. Our objective for a scal year is to grow operating expenses at a
slower rate than net sales and to grow operating income at a faster rate than net sales. On occasion, we may make strategic growth investments that
may, at times, cause our operating expenses to grow at a faster rate than net sales and that may result in our operating income growing at a slower
rate than net sales.
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