Walmart 2016 Annual Report Download - page 18

Change is sweeping through today’s retail
marketplace. Yet change is nothing new for our
industry – nor for Walmart. For more than 50 years, we
have been a disruptor in retail, tailoring our proposition
to align with evolving customer preferences. To continue
leading, Walmart is making significant investments
in people and technology to deliver results for our
associates, customers and shareholders.
We take these steps with confidence because Walmart is one of the
strongest companies in the world, with a strong balance sheet and
significant cash generation.
In fiscal 2016, Walmart generated revenue of $482 billion, operating
income of $24 billion, operating cash flow of $27 billion and return on
investment of 15.5 percent. Excluding more than $17 billion in currency
impacts, revenue would have been over $499 billion. Looking
ahead, we expect to add approximately $45 billion to $60 billion of
sales on a constant currency basis in the three years ending in fiscal
2019, an amount equivalent to a Fortune 50 company.
However, running a healthy
business sometimes requires
sharpening the focus of the
portfolio. After a thorough
review of our stores from
both a financial and strategic
standpoint, we made the
decision to close stores
representing less than
1 percent of our global
revenue and square footage.
A key takeaway from this
portfolio review was the
health of our overall store
base. During fiscal 2017,
we project to add more than 300 new stores globally. We are
a growth company.
Our great financial strength positions us to make the necessary
investments in our business to drive sustainable long-term results,
even as shareholders see a solid return on their investment.
During this past year, Walmart’s financial strength allowed for
shareholder returns in excess of $10 billion through dividends
and share repurchases. Also, in February 2016, we raised our
annual dividend for the 43rd consecutive year to $2.00 per share.
I’m proud of Walmart’s long record of shareholder returns.
Only Walmart can deliver a seamless shopping experience at
scale, and we are strengthening our proposition for customers.
Winning with stores is critical to our strategy. That’s why the
approximately $2.7 billion wage and training investment in our
U.S. associates that was started in fiscal 2016 is not only the right
thing to do for our associates, but it positions us to be a stronger
company going forward.
We will continue to invest in our business, with capital investments of
approximately $11 billion in fiscal 2017, including more than $1 billion
in global e-commerce initiatives that will improve our technology
and fulfillment capabilities to ensure that customers receive items
efficiently and in a cost-effective manner. I’m excited that we are
building one of the world’s largest technology companies inside of
one of the world’s most financially strong companies.
As I conclude my first letter to you as CFO, let me thank you for
being a Walmart shareholder. I am honored to serve in this
capacity during this exciting time at Walmart. Our business is
strong, and we are making the strategic investments to become
even stronger. As a result, I’m confident that we will serve
customers more effectively, drive sales growth and continue
to deliver strong returns for our shareholders.
Sincerely,
Transforming the company from
a position of great financial strength
Over the past 5 years
$60B
revenue growth
$129B
cash flow from operations
$55B
returned to shareholders
(through dividends and
share repurchases)
BRETT BIGGS
Executive Vice President and
Chief Financial Officer
Wal-Mart Stores, Inc.
16 2016 Annual Report