Walmart Inc. [WMT] Filings

10-Q 1 wmt-20221031.htm 10-Q wmt-20221031

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the quarterly period ended October 31, 2022.


☐			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the transition period from to .

Commission File Number 001-06991

WALMART INC.

(Exact name of registrant as specified in its charter)


Delaware		71-0415188
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

702 S.W. 8th Street		72716
Bentonville	AR
(Address of principal executive offices)		(Zip Code)

Registrant's telephone number, including area code: (479) 273-4000

Former name, former address and former fiscal year, if changed since last report: N/A

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.10 per share

WMT

New York Stock Exchange

2.550% Notes Due 2026

WMT26

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☒

Accelerated Filer

☐

Non-Accelerated Filer

☐

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The registrant had 2,696,800,054 shares of common stock outstanding as of November 29, 2022.

Table of Contents

Walmart Inc.

Form 10-Q

For the Quarterly Period Ended October 31, 2022

Table of Contents


			Page
Part I. Financial Information
	Item 1. Financial Statements
		Condensed Consolidated Statements of Income	3
		Condensed Consolidated Statements of Comprehensive Income	4
		Condensed Consolidated Balance Sheets	5
		Condensed Consolidated Statements of Shareholders' Equity	6
		Condensed Consolidated Statements of Cash Flows	8
		Notes to Condensed Consolidated Financial Statements	9
	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		17
	Item 3. Quantitative and Qualitative Disclosures About Market Risk		27
	Item 4. Controls and Procedures		28

Part II. Other Information
	Item 1. Legal Proceedings		29
	Item 1A. Risk Factors		32
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		32
	Item 5. Other Information		32
	Item 6. Exhibits		36

Signatures			37

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1.Financial Statements

Walmart Inc.

Condensed Consolidated Statements of Income

(Unaudited)


	Three Months Ended October 31,				Nine Months Ended October 31,
(Amounts in millions, except per share data)	2022		2021		2022		2021
Revenues:
Net sales	$	151,469	$	139,207	$	443,138	$	416,237
Membership and other income	1,344		1,318		4,103		3,646
Total revenues	152,813		140,525		447,241		419,883
Costs and expenses:
Cost of sales	115,613		105,023		338,298		313,478
Operating, selling, general and administrative expenses	34,505		29,710		94,076		86,350
Operating income	2,695		5,792		14,867		20,055
Interest:
Debt	499		408		1,266		1,326
Finance lease	85		78		252		241
Interest income	(84)		(44)		(151)		(111)
Interest, net	500		442		1,367		1,456
Loss on extinguishment of debt	—		2,410		—		2,410
Other (gains) and losses	3,626		(1,207)		5,386		2,275
Income (loss) before income taxes	(1,431)		4,147		8,114		13,914
Provision for income taxes	336		1,015		2,631		3,607


Consolidated net income (loss)	(1,767)		3,132		5,483		10,307
Consolidated net income attributable to noncontrolling interest	(31)		(27)		(78)		(196)
Consolidated net income (loss) attributable to Walmart	$	(1,798)	$	3,105	$	5,405	$	10,111





Net income per common share:
Basic net income (loss) per common share attributable to Walmart	$	(0.66)	$	1.11	$	1.98	$	3.61




Diluted net income (loss) per common share attributable to Walmart	(0.66)		1.11		1.97		3.59

Weighted-average common shares outstanding:
Basic	2,711		2,785		2,733		2,799
Diluted	2,711		2,797		2,743		2,813

Dividends declared per common share	$	—	$	—	$	2.24	$	2.20

See accompanying notes.

Table of Contents

Walmart Inc.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)


	Three Months Ended October 31,				Nine Months Ended October 31,
(Amounts in millions)	2022		2021		2022		2021
Consolidated net income (loss)	$	(1,767)	$	3,132	$	5,483	$	10,307
Consolidated net income attributable to noncontrolling interest	(31)		(27)		(78)		(196)

Consolidated net income (loss) attributable to Walmart	(1,798)		3,105		5,405		10,111

Other comprehensive income (loss), net of income taxes
Currency translation and other	(919)		(523)		(2,067)		2,637
Net investment hedges	—		—		—		(1,202)
Cash flow hedges	(175)		(183)		(426)		(318)
Minimum pension liability	—		1		3		1,972

Other comprehensive income (loss), net of income taxes	(1,094)		(705)		(2,490)		3,089
Other comprehensive loss attributable to noncontrolling interest	208		193		476		189

Other comprehensive income (loss) attributable to Walmart	(886)		(512)		(2,014)		3,278

Comprehensive income (loss), net of income taxes	(2,861)		2,427		2,993		13,396
Comprehensive (income) loss attributable to noncontrolling interest	177		166		398		(7)

Comprehensive income (loss) attributable to Walmart	$	(2,684)	$	2,593	$	3,391	$	13,389

See accompanying notes.

Table of Contents

Walmart Inc.

Condensed Consolidated Balance Sheets

(Unaudited)


	October 31,		January 31,		October 31,
(Amounts in millions)	2022		2022		2021
ASSETS
Current assets:
Cash and cash equivalents	$	11,587	$	14,760	$	16,111
Receivables, net	8,218		8,280		7,349
Inventories	64,706		56,511		57,484
Prepaid expenses and other	3,169		1,519		2,020

Total current assets	87,680		81,070		82,964



Property and equipment, net	97,553		94,515		92,242
Operating lease right-of-use assets	13,394		13,758		13,863
Finance lease right-of-use assets, net	4,597		4,351		4,226

Goodwill	28,137		29,014		28,923
Other long-term assets	16,295		22,152		22,633
Total assets	$	247,656	$	244,860	$	244,851

LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND EQUITY
Current liabilities:
Short-term borrowings	$	6,811	$	410	$	447
Accounts payable	57,263		55,261		57,156
Dividends payable	1,527		—		1,528
Accrued liabilities	27,443		26,060		24,474
Accrued income taxes	900		851		446
Long-term debt due within one year	5,458		2,803		1,575
Operating lease obligations due within one year	1,457		1,483		1,486
Finance lease obligations due within one year	549		511		508


Total current liabilities	101,408		87,379		87,620

Long-term debt	33,935		34,864		36,425
Long-term operating lease obligations	12,658		13,009		13,095
Long-term finance lease obligations	4,512		4,243		4,061

Deferred income taxes and other	14,760		13,474		12,893

Commitments and contingencies

Redeemable noncontrolling interest	260		—		—

Equity:
Common stock	270		276		277
Capital in excess of par value	4,817		4,839		4,811
Retained earnings	77,946		86,904		85,674
Accumulated other comprehensive loss	(10,780)		(8,766)		(8,488)
Total Walmart shareholders' equity	72,253		83,253		82,274
Nonredeemable noncontrolling interest	7,870		8,638		8,483
Total equity	80,123		91,891		90,757
Total liabilities, redeemable noncontrolling interest, and equity	$	247,656	$	244,860	$	244,851

See accompanying notes.

Table of Contents

Walmart Inc.

Condensed Consolidated Statements of Shareholders' Equity

(Unaudited)


								Accumulated		Total
				Capital in				Other		Walmart		Nonredeemable
(Amounts in millions)	Common Stock			Excess of		Retained		Comprehensive		Shareholders'		Noncontrolling		Total
	Shares	Amount		Par Value		Earnings		Loss		Equity		Interest		Equity
Balances as of February 1, 2022	2,761	$	276	$	4,839	$	86,904	$	(8,766)	$	83,253	$	8,638	$	91,891
Consolidated net income	—	—		—		2,054		—		2,054		49		2,103
Other comprehensive income, net of income taxes	—	—		—		—		268		268		7		275
Dividends declared ($2.24 per share)	—	—		—		(6,173)		—		(6,173)		—		(6,173)
Purchase of Company stock	(17)	(2)		(125)		(2,249)		—		(2,376)		—		(2,376)

Sale of subsidiary stock	—	—		24		—		—		24		11		35
Other	4	1		(151)		(4)		—		(154)		(1)		(155)
Balances as of April 30, 2022	2,748	$	275	$	4,587	$	80,532	$	(8,498)	$	76,896	$	8,704	$	85,600
Consolidated net income (loss)	—	—		—		5,149		—		5,149		(2)		5,147
Other comprehensive (loss), net of income taxes	—	—		—		—		(1,396)		(1,396)		(275)		(1,671)

Purchase of Company stock	(26)	(3)		(182)		(3,201)		—		(3,386)		—		(3,386)
Dividends to noncontrolling interest	—	—		—		—		—		—		(434)		(434)
Sale of subsidiary stock	—	—		8		—		—		8		2		10
Other	—	—		259		39		—		298		23		321
Balances as of July 31, 2022	2,722	272		4,672		82,519		(9,894)		77,569		8,018		85,587
Consolidated net income (loss)	—	—		—		(1,798)		—		(1,798)		31		(1,767)
Other comprehensive loss, net of income taxes	—	—		—		—		(886)		(886)		(208)		(1,094)
Dividends	—	—		—		43		—		43		—		43
Purchase of Company stock	(22)	(2)		(158)		(2,772)		—		(2,932)		—		(2,932)
Dividends to noncontrolling interest	—	—		—		—		—		—		(10)		(10)
Sale of subsidiary stock	—	—		7		—		—		7		3		10
Other	1	—		296		(46)		—		250		36		286
Balances as of October 31, 2022	2,701	$	270	$	4,817	$	77,946	$	(10,780)	$	72,253	$	7,870	$	80,123

See accompanying notes.

Table of Contents


								Accumulated		Total
				Capital in				Other		Walmart		Nonredeemable
(Amounts in millions)	Common Stock			Excess of		Retained		Comprehensive		Shareholders'		Noncontrolling		Total
	Shares	Amount		Par Value		Earnings		Loss		Equity		Interest		Equity
Balances as of February 1, 2021	2,821	$	282	$	3,646	$	88,763	$	(11,766)	$	80,925	$	6,606	$	87,531
Consolidated net income	—	—		—		2,730		—		2,730		81		2,811
Other comprehensive income (loss), net of income taxes	—	—		—		—		3,820		3,820		(74)		3,746
Dividends declared ($2.20 per share)	—	—		—		(6,200)		—		(6,200)		—		(6,200)
Purchase of Company stock	(21)	(2)		(112)		(2,718)		—		(2,832)		—		(2,832)
Dividends to noncontrolling interest	—	—		—		—		—		—		(408)		(408)
Sale of subsidiary stock	—	—		18		—		—		18		57		75
Other	5	—		(128)		2		—		(126)		(5)		(131)
Balances as of April 30, 2021	2,805	$	280	$	3,424	$	82,577	$	(7,946)	$	78,335	$	6,257	$	84,592
Consolidated net income	—	—		—		4,276		—		4,276		88		4,364
Other comprehensive income (loss), net of income taxes	—	—		—		—		(30)		(30)		78		48

Purchase of Company stock	(17)	(2)		(94)		(2,273)		—		(2,369)		—		(2,369)
Dividends to noncontrolling interest	—	—		—		—		—		—		(10)		(10)
Sale of subsidiary stock	—	—		6		—		—		6		171		177
Other	3	—		319		(8)		—		311		14		325
Balances as of July 31, 2021	2,791	$	278	$	3,655	$	84,572	$	(7,976)	$	80,529	$	6,598	$	87,127
Consolidated net income	—	—		—		3,105		—		3,105		27		3,132
Other comprehensive loss, net of income taxes	—	—		—		—		(512)		(512)		(193)		(705)
Dividends	—	—		—		45		—		45		—		45
Purchase of Company stock	(14)	(1)		(87)		(2,044)		—		(2,132)		—		(2,132)
Dividends to noncontrolling interest	—	—		—		—		—		—		(6)		(6)
Sale of subsidiary stock	—	—		922		—		—		922		2,057		2,979
Other	1	—		321		(4)		—		317		—		317
Balances as of October 31, 2021	2,778	$	277	$	4,811	$	85,674	$	(8,488)	$	82,274	$	8,483	$	90,757

See accompanying notes.

Table of Contents

Walmart Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended October 31,
(Amounts in millions)	2022		2021
Cash flows from operating activities:
Consolidated net income	$	5,483	$	10,307


Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Depreciation and amortization	8,134		7,952
Net unrealized and realized losses	5,611		1,831
Losses on disposal of business operations	—		433
Deferred income taxes	28		(1,402)
Loss on extinguishment of debt	—		2,410
Other operating activities	921		1,057
Changes in certain assets and liabilities, net of effects of acquisitions and dispositions:
Receivables, net	(59)		(842)
Inventories	(9,008)		(12,663)
Accounts payable	3,183		7,906
Accrued liabilities	1,354		(722)
Accrued income taxes	51		24
Net cash provided by operating activities	15,698		16,291

Cash flows from investing activities:
Payments for property and equipment	(12,061)		(8,588)
Proceeds from the disposal of property and equipment	126		290
Proceeds from disposal of certain operations, net of divested cash	—		7,935

Payments for business acquisitions, net of cash acquired	(730)		(248)
Other investing activities	(300)		(919)
Net cash used in investing activities	(12,965)		(1,530)

Cash flows from financing activities:
Net change in short-term borrowings	6,451		228
Proceeds from issuance of long-term debt	4,969		6,945
Repayments of long-term debt	(1,439)		(13,010)
Premiums paid to extinguish debt	—		(2,317)
Dividends paid	(4,600)		(4,627)
Purchase of Company stock	(8,708)		(7,368)
Dividends paid to noncontrolling interest	(16)		(20)

Sale of subsidiary stock	55		3,231
Other financing activities	(2,293)		(1,175)
Net cash used in financing activities	(5,581)		(18,113)

Effect of exchange rates on cash, cash equivalents and restricted cash	(331)		(118)

Net decrease in cash, cash equivalents and restricted cash	(3,179)		(3,470)
Change in cash and cash equivalents reclassified from assets held for sale	—		1,848
Cash, cash equivalents and restricted cash at beginning of year	14,834		17,788
Cash, cash equivalents and restricted cash at end of period	$	11,655	$	16,166

See accompanying notes.

Table of Contents

Walmart Inc.

Notes to Condensed Consolidated Financial Statements

Note 1. Summary of Significant Accounting Policies

Basis of Presentation

The Condensed Consolidated Financial Statements of Walmart Inc. and its subsidiaries ("Walmart" or the "Company") and the accompanying notes included in this Quarterly Report on Form 10-Q are unaudited. In the opinion of management, all adjustments necessary for the fair presentation of the Condensed Consolidated Financial Statements have been included. Such adjustments are of a normal, recurring nature. Certain previously reported amounts have been reclassified to conform to the current year presentation. The Condensed Consolidated Financial Statements, and the accompanying notes, are prepared in accordance with generally accepted accounting principles in the United States ("GAAP") and do not contain certain information included in the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2022 ("fiscal 2022"). Therefore, the interim Condensed Consolidated Financial Statements should be read in conjunction with that Annual Report on Form 10-K.

The Company's Consolidated Financial Statements are based on a fiscal year ending January 31 for the United States ("U.S.") and Canadian operations. The Company consolidates all other operations generally using a one-month lag based on a calendar year. There were no significant intervening events during the month of October 2022 related to the consolidated operations using a lag that materially affected the Condensed Consolidated Financial Statements.

The Company's business is seasonal to a certain extent due to calendar events and national and religious holidays, as well as weather patterns. Historically, the Company's highest sales volume has occurred in the fiscal quarter ending January 31.

Use of Estimates

The Condensed Consolidated Financial Statements have been prepared in conformity with GAAP. Those principles require management to make estimates and assumptions that affect the reported amounts of assets and liabilities. Management's estimates and assumptions also affect the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ materially from those estimates.

Redeemable Noncontrolling Interest

Noncontrolling interests that are redeemable outside the Company's control at fixed or determinable prices and dates are presented as temporary equity on the Condensed Consolidated Balance Sheets. Redeemable noncontrolling interests are recorded at the greater of the redemption fair value or the carrying value of the noncontrolling interest and adjusted each reporting period for income, loss and any distributions made. As of October 31, 2022, the Company has a redeemable noncontrolling interest related to an acquisition in the Walmart U.S. segment as the minority interest owner holds a put option which may require the Company to purchase its interest beginning in December 2027 and annually thereafter.

Inventories

The Company values inventories at the lower of cost or market as determined primarily by the retail inventory method of accounting, using the last-in, first-out ("LIFO") method for the Walmart U.S. segment's inventories. The inventory for the Walmart International segment is generally valued in most markets by the retail inventory method of accounting, using the first-in, first-out ("FIFO") method. The retail inventory method of accounting results in inventory being valued at the lower of cost or market, since permanent markdowns are immediately recorded as a reduction of the carrying value of inventory. The inventory at the Sam's Club segment is valued using the weighted-average cost LIFO method. If necessary, the Company records a LIFO adjustment during interim periods for the projected annual effect of inflation or deflation which is adjusted to actual results based on rates and inventory levels at the end of the year.

Recent Accounting Pronouncements

In September 2022, the FASB issued ASU 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations, which enhances the transparency about the use of supplier finance programs for investors and other allocators of capital. The amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the disclosure of rollforward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. The amendments should be applied retrospectively to each period in which a balance sheet is presented, except for disclosure of rollforward information, which should be applied prospectively. Management is currently evaluating this ASU to determine its impact on the Company's disclosures.

Table of Contents

Note 2. Net Income (Loss) Per Common Share

Basic net income per common share attributable to Walmart is based on the weighted-average common shares outstanding during the relevant period. Diluted net income (loss) per common share attributable to Walmart is based on the weighted-average common shares outstanding during the relevant period adjusted for the dilutive effect of share-based awards. The Company did not have significant share-based awards outstanding that were anti-dilutive and not included in the calculation of diluted net income (loss) per common share attributable to Walmart for the three and nine months ended October 31, 2022 and 2021. Further, the calculation of diluted net loss per common share attributable to Walmart for the three months ended October 31, 2022 does not include the effect of share-based payment awards as their inclusion would be anti-dilutive and would reduce the net loss per common share.

The following table provides a reconciliation of the numerators and denominators used to determine basic and diluted net income (loss) per common share attributable to Walmart:


	Three Months Ended October 31,				Nine Months Ended October 31,
(Amounts in millions, except per share data)	2022		2021		2022		2021
Numerator
Consolidated net income (loss)	$	(1,767)	$	3,132	$	5,483	$	10,307
Consolidated net income attributable to noncontrolling interest	(31)		(27)		(78)		(196)
Consolidated net income (loss) attributable to Walmart	$	(1,798)	$	3,105	$	5,405	$	10,111

Denominator
Weighted-average common shares outstanding, basic	2,711		2,785		2,733		2,799
Dilutive impact of share-based awards	—		12		10		14
Weighted-average common shares outstanding, diluted	2,711		2,797		2,743		2,813

Net income (loss) per common share attributable to Walmart
Basic	$	(0.66)	$	1.11	$	1.98	$	3.61
Diluted	(0.66)		1.11		1.97		3.59

Note 3. Accumulated Other Comprehensive Loss

Amounts reclassified from accumulated other comprehensive loss for derivative instruments are generally recorded in interest, net, in the Company's Condensed Consolidated Statements of Income. Amounts for the minimum pension liability, as well as the cumulative translation and any related net investment hedge impacts resulting from a disposition of a business, are recorded in other gains and losses in the Company's Condensed Consolidated Statements of Income. The following tables provide the changes in the composition of total accumulated other comprehensive loss:


(Amounts in millions and net of immaterial income taxes)	Currency Translation and Other		Net Investment Hedges		Cash Flow Hedges		Minimum Pension Liability		Total
Balances as of February 1, 2022	$	(8,100)	$	94	$	(748)	$	(12)	$	(8,766)

Other comprehensive income before reclassifications, net	225		—		26		—		251