enterprise strategy
ceo message
walmart u.s.
walmart international
sam's club
e-Commerce
Walmart Associates
chairman's message
board of directors
Financial Performance
global Footprint
by the numbers
"We're investing to win in retail by providing our customers what they want, when they want it, at unrivaled prices."
Doug McMillon
It’s an exciting time for Walmart. From the U.S. to the U.K., from Mexico to China, and across all the markets we serve, retail is changing in fundamental ways. Our future is bright because we’re increasing our investments in associates, stores and e-commerce capabilities to prepare for the way customers will want to shop with us in this new era of retail.
Each week, we serve close to 260 million customers in our stores, in 27 countries, and through our websites globally. While language and culture may differ, remarkable similarities exist globally in what customers expect from a retailer. Whether it’s a young mom in Toronto or a retired couple in Phoenix, customers everywhere want to save money and save time. They want to shop on their terms in a manner that’s easy and convenient. They seek broad choices in assortment. And, regardless of how they shop, in stores or on their mobile device, they expect a great price and experience. At Walmart, our enterprise strategy guides how we fulfill those expectations and deliver on our customer proposition. We’ll drive sales growth by executing well, in stores and e-commerce, every time we serve customers.
I’m encouraged that Walmart’s fiscal 2015 revenue grew by more than $9 billion to nearly $486 billion and earnings per share were $4.99, a nearly 3 percent increase from the prior year. But, we have higher expectations. Our priority is to run great stores, clubs and e-commerce everywhere we operate to grow the business.
Walmart U.S. delivered net sales of $288 billion, a more than 3 percent increase, and improved its sales and operating income trends each consecutive quarter during the year. I’m pleased by the positive comp sales growth, especially the strong performance from Neighborhood Markets, but we’re not satisfied. The Walmart U.S. team is implementing a broad range of initiatives focused on strengthening our assortment (especially the fresh offering), driving the integration of e-commerce with our stores, and improving the customer experience. For example, in February, we announced a $1 billion investment in our U.S. hourly associates to provide higher wages, more training and increased opportunities to build a career with Walmart. These are strategic investments in our people to reignite the sense of ownership they have in our stores and foster an improved customer experience to drive sales growth.
Walmart International produced solid constant currency sales and operating income growth. On a constant currency basis, net sales surpassed $141 billion, while operating income increased to more than $6 billion. I’m pleased that we’re running better stores in our International markets. Operations in Canada, Mexico and China continue to improve, leading to stronger sales and profitability. The U.K. market has become fiercely competitive, and in Brazil, we continue to work on improving performance. Across International, our commitment to a compelling fresh food offering and innovations in e-commerce, like grocery home shopping, will be important growth drivers for the future.
The emphasis of the Sam’s Club team on making membership more rewarding helped drive net sales of $58 billion and an increase of more than 10 percent in membership income. Members appreciate the value-added benefits offered by Sam’s Club like Plus Cash Rewards and the suite of comprehensive business member services. The team is focused on bringing merchandise excitement and newness to drive sales. In addition, Sam’s Club continues to strengthen digital integration with clubs through initiatives like Club Pickup.
Our 22 percent growth in global e-commerce sales surpassed the overall market and was supported by enhancements to our technology, assortment and supply chain. The investments in our global technology platform provide a foundation that strengthens usability and conversion across our e-commerce websites and mobile apps. We’re also investing in more fulfillment centers around the world to enable faster delivery of merchandise to customers. Each of our business segments continues to increase the integration of e-commerce and mobile assets with our stores and clubs. For example, we’re testing Click & Collect pickup points in many of our key markets. Asda already has Click & Collect capabilities in all stores.
Customers served weekly in our stores in 27 countries and through 11 websites globally
As we invest to expand our global e-commerce capabilities and build more stores, we keep customer expectations at the forefront. The type of store format or fulfillment center we build, the location of where we put a club, or the functionality of a website are all predicated on how we can better serve our customers. And, as we make these choices, we’re striving to balance sales growth and profitability. We’re being thoughtful with our investments, ensuring we have the infrastructure in place for sustainable growth. Walmart’s strong balance sheet and robust cash flow provide a solid foundation to support these investments. While we grow, we remain focused on expense management and EDLC. When we operate and grow efficiently, we’ll generate increased value for shareholders.
Highly motivated and engaged associates are essential to providing customers with excellent service. And, it’s only through associates who are merchant-minded that we’ll continue to connect customers with new items that they want and need. Although technology has transformed our business, retail is still a people business.
Walmart has always provided a ladder of opportunity — one that today is available to our 2.2 million associates globally. Regardless of your background, Walmart will give you the opportunity to grow a career as far as your ability and hard work will take you. I am one of many leaders in our company who benefited from this opportunity to begin as an hourly associate and grow into roles with increased responsibility.
Talent is the essential enabler to reach our objectives. I’m excited by the new initiatives we’ve put in place around the world to better train and equip our associates for success. For example, the steps we’ve taken in the U.S., China and Mexico to strengthen compensation structures and increase training opportunities give associates more ownership and accountability, so they can react faster to customers’ needs. Adding new talent is also important as we work to grow digital retail and fully align our organization with a changing retail environment. Some of the brightest minds in retail are joining Walmart because they know this is an organization that’s embracing innovation to deliver a better future for customers.
We’re not only thinking differently about retail, we’re thinking differently about the world. Walmart is a powerful change agent, and we’re committed to global responsibility initiatives that make our world better. I’m proud of our work to advance environmental sustainability, to support women’s economic empowerment, and to offer healthier food choices for our customers. We continue to look for more ways to lead and have an even greater impact on the communities that we serve. We’ll also remain steadfast in our commitment to compliance, ethics and doing business the right way. I’m pleased with the enhancements we’ve made, including better technology, to strengthen these organizations and build world-class compliance.
My career at Walmart began more than three decades ago, and I’ve never been more excited about our future than I am today. Walmart has a great purpose — to save people money so they can live better. We’re embracing change so we can deliver that promise more effectively. As I look back over this past year, we’ve made great strides towards our goals. We know where our customers’ expectations are going, and we’re ideally positioned to deliver for them. Walmart has great assets and capabilities, but there’s more we must do. We’re continuing to build a Walmart that excels globally at the integration of digital and physical retail, providing our customers with a seamless experience to shop whenever, wherever and however they want. It’s a great opportunity. I’m excited about the next steps in our journey.
Sincerely,
