Walmart 2015 Annual Report Download - page 18

16 2015 Annual Report
Walmart had a solid year in fiscal 2015 as
each operating segment improved its
performance as the year progressed. While
net sales grew nearly 2 percent and operating
income increased 1 percent, our underlying
performance was actually stronger. Our
results were impacted by significant
headwinds from currency exchange rate
fluctuations. These currency headwinds
may continue throughout this current year.
Our top priority is to run great stores in all
of our markets. That is the only way to have
sustainable increases in comp sales, as well
as top line growth. We’re pleased that
e-commerce sales rose faster than the
market globally last year at approximately
22 percent. As we continue to integrate our
websites and mobile apps with our stores
and clubs, we’ll enable customers to shop
anytime and anywhere they want.
Walmart is well-positioned to deliver for
customers because we have the financial
strength to invest in growth. Our AA credit
rating, unmatched in retail, is a testament to
our financial discipline and strong balance
sheet. We’ve consistently delivered strong
cash flow for many years. In fact, in fiscal
2015, Walmart generated free cash flow of
more than $16 billion, the best performance
in over a decade. Our return on investment
was 16.9 percent, as we continue to invest in
store growth and e-commerce initiatives.
Retail is changing and we’re investing to
serve customers more effectively, which we
believe will benefit shareholders over time.
We know that customers expect value, a
broad assortment, and various options in
how and where they shop. They also want
an enjoyable shopping experience, both in
stores and online. Our fiscal 2016 investments
in associate wages and training, as well as our
stepped-up investments in global e-commerce,
will strengthen our ability to deliver a great
experience for customers. These important
investments will make us even more relevant
in the future.
Investing for customers to drive growth
We take a long-term view as we position our
business for the future. Globally, customers
will always need to shop in stores, and we
will continue to serve customers with a
variety of formats. That is why we will add
26–30 million net retail square feet this
year with new stores and clubs around the
world, to bring Walmart closer to customers.
Sometimes, it is more convenient for customers
to shop online and have their order delivered
to their doorstep. Other times, they may
want to pick up their online order when
they are already shopping at our store. We
are building the capabilities to provide
customers with best-in-class e-commerce –
from user-friendly websites and mobile
apps to high-tech fulfillment centers and
the infrastructure required for grocery home
shopping. Our incremental investments in
and around e-commerce will be well over
$1 billion this year, and we will continue
to seek the right balance between sales
growth and profitability as we grow our
e-commerce business.
Investing in our people and shareholders
This year, we’re making a $1 billion incremental
investment in strategic people initiatives
within our U.S. businesses. This wage restruc-
turing and expanded training opportunities
will help hourly associates earn higher pay and
advance their careers. This investment will
benefit our customers through a better store
and club experience, leading to higher sales
and returns.
I’m proud of Walmart’s long record of consistent
returns to shareholders. After growth initiatives,
we use our remaining cash flows to provide
shareholder returns through dividends and
share repurchases. Last year, we returned
over $7 billion to shareholders. This year, we
increased our annual dividend to $1.96 per
share, representing 42 consecutive years of
dividend increases.
As I close, I encourage you to review
our financial results in the next section.
Walmart’s business is strong, and we are
confident that our strategic investments
will make Walmart’s future even brighter.
A solid scal 2015
performance; investing
for a stronger future
Charles M. Holley, Jr.
Executive Vice President and
Chief Financial Ocer
Wal-Mart Stores, Inc.
$64B*
Consolidated net
sales growth
19%*
Earnings per
share growth
$64B*
Returned to
shareholders through
dividends and
share repurchases
*Data reflects five-year period including fiscal 2011 through 2015.
16 2015 Annual Report