WalMart FY 4Q16 Earnings Call Notes

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Wal-Mart Stores (WMT) C. Douglas McMillon on Q4 2016 Results

Ordering groceries online picking up in store

“We also expanded online grocery shopping to over 150 locations across more than 20 markets in the U.S. Customers are ordering online and on their phones and then picking up their groceries on our parking lots without ever leaving their cars. Customer satisfaction for those who use our free pickup service is in the high 90s. We are learning some interesting things along the way. We’ve found that 8:00 p.m. to 9:00 p.m. is one of the most popular times customers order groceries online”

Gregory S. Foran – President & Chief Executive Officer, Walmart U.S.

Raising wages for associates

“we announced the second phase of our two-year, $2.7 billion investment in our associates. Just two days from now, on February 20, we’ll raise the starting wage to at least $10 per hour for hourly associates hired before January 1, 2016.”

Headwinds from deflation, warmer temps and delays in tax refund checks

“While customers benefited from lower gas prices, we experienced significant headwinds from deflation in meat and dairy products. Additional sales pressure came from warmer than normal temperatures early in the quarter and delays in IRS tax refund checks impacted the very end of the quarter.”

Apparel improved throughout the quarter

“In our General Merchandise areas, Apparel improved throughout the quarter, after a slow start due to warmer-than-usual temperatures. On-trend assortments, particularly in active wear, drove results in this area. In Entertainment, we continued to experience soft wireless sales and a slower adoption of new technology in televisions.”

Slower flu seasons created a headwind

“Finally, Health & Wellness remained a positive comp driver for us, with growth coming from branded drug inflation and better in-stocks in OTC. However, a slower flu season created a headwind to our Cold, Cough and Flu business this quarter.”

David Cheesewright – President & Chief Executive Officer, Walmart International, Wal-Mart Stores, Inc.

Gaining share in hypermarkets though comps fell 3% in China

“In China, despite ongoing economic challenges and slower GDP growth, we continued to gain share for the 12th consecutive quarter in the hypermarket channel, according to Nielsen. Net sales grew 0.3%, driven by new store openings and improved performance from completed remodels. Comp sales fell 3%, in part, due to warmer weather and disappointing sales in winter seasonal categories.”

Political and economic instability in Brazil

“In Brazil, we continue to face political and economic instability. The deterioration in the macro environment, combined with persistent high inflation, continues to put a strain on customers. Net sales grew 1.2% and comps grew 0.8%, in a retail market that contracted by 5.7%, according to Serasa Experian. We were encouraged by another quarter of double digit growth in our wholesale business, mostly offset by continued softness in the hypermarket format.”

Neil M. Ashe – President & Chief Executive Officer, Global eCommerce and Technology