Group4_Walmart

Walmart, Inc. Is an American multinational retail corporation with locations across the U.S and 24 countries around the world, founded in Arkansas in 1962. The corporation operates a chain of supercenters, discount department stores, grocery stores and online or mobile applications with headquarters in Bentonville, Arkansas and incorporated in the state of Delaware with locations in Africa, Canada, Central America, Chile, China, India and Mexico. Walmart is engaged in global operation of retail, wholesale as well as eCommerce. Walmart became a publicly traded company in 1970 and under control of the Walton family. Walton's family own over 50 percent of Walmart through holding company Walton enterprises and individual holding. The second largest shareholder is Vanguard Group who own about 5 percent of Walmart shares.

In 2022, Walmart oversees operations for more than 10,500 stores and clubs under 46 banners with over 2.3 million associates around the world with 1.6 million in the U.S alone. It provides a variety of products from grocery and entertainment to sporting goods and crafts, electronics, apparel, toys and home furnishing. Walmart focused on three strategic merchandise units: grocery, general merchandised, health and wellness. Grocery consists of dry grocery, snacks, dairy, meat, produce, deli and bakery, frozen foods, alcoholic and nonalcoholic beverages, pet supplies, household chemicals, paper goods and baby products. General merchandise includes entertainment such as electronic, toys, video games, movies; hardlines such as automotive, hardware and paint, sporting goods, outdoor living and stationery; apparel, jewelry and accessories; home such as small appliances, bed and bath, furniture and home organization, home furnishings, home dcor, fabrics and crafts.

Walmart total revenues includes net sales and membership and other income increased $13.6 billion or 2.4% and $35.2 billion or 6.7% for fiscal 2022 and 2021 when compared to the prior fiscal year. This increase in 2022 mostly comes from a strong comparable sale for Walmart and Sam's Club which benefit from strong U.S. consumer spending and inflation along with the remainder of the international markets. The net sales also benefit from the positive impact of fluctuations in currency exchange rates in 2022. Overall, regarding some limitations during the fiscal year of 2022 such as COVID-19 pandemic, government regulations and supply chain issue, the net sales of Walmart grew strongly and positively.

Walmart net income is $13.9 billion in 2022 which is an increase of $0.2 billion compared to 2021. The gross profit rate increased 14 and 20 basic points for fiscal 2022 and 2021. For fiscal 2022, the operating expense decreases compared to prior fiscal year which benefit from growth in comparable sales. There is also a decrease in effective tax rate for fiscal 2022 due to various factors such as valuation allowances, changes in tax law.

Walmart primarily earns its revenues or sales through three major entities including Walmart U.S., Walmart International, and Sam's Club. A year over year analysis of consolidated sales and income can give investors and analysts ample information to make necessary decisions in regard to Walmart. In the current fiscal year of 2022 Walmart has been able to generate a consolidated amount of $572.8 billion dollars in sales. These total sales or revenue numbers are astoundingly up $13.6 billion or about 2.5% from $559.2 billion in the previous year of 2021. From two years prior in 2020 sales are up $48.8 billion or about 9.3% from $524 billion. A lot of Walmart's success in total revenues and sales can be traced to their 11% and 90% two-year stack growth in Ecommerce sales. This was clearly expedited by the Coronavirus pandemic but turned out to benefit Walmart in terms of exploring and conquering a crucial aspect of sales. Walmart's net income has not been increasing at the rapid rate that their revenues and sales portray. Year over year, Walmart has reported net income of 15.2 billion in 2020, 13.7 billion in 2021, and 13.9 billion in 2022. This is a year over year percentage decrease of 9.9% from 2020 to 2021 and an increase of 1.4% from 2021 to 2022. At a quick glance the year over year in sales seems to look very promising for Walmart's growth. However, their net income shows to be slowing down a bit from prior years. I think the overall trend from sales and income shows consistent growth. The dip in net income from 2020 to 2021 can be attributed to the Coronavirus pandemic which stunted Walmart's growth for a short period of time. Walmart was able to adapt and thrive in this new environment through an increase in ecommerce sales, robust international growth in marketplace and fulfillment services, and new ventures such as Walmart Connect. This allowed the company to bounce back, boosting sales and profits in the fiscal years of 2021 and 2022.

We can delve even deeper to take a look at Walmart's quarterly reports year over year. In the last quarter ending January 31 2022, Walmart finished strong with $150 billion net sales and a consolidated net income of $3.6 billion. However, the first quarter of the 2023 fiscal year was not as strong as the last quarter in the 2022 fiscal year. Walmart pushed $140 billion in net sales resulting in a $10 billion or 6.67% decrease from quarter four in 2022. Walmart's net income also took a decent hit falling $1.5 billion or 41.67% to about $2.1 billion. This may look like a down trend for Walmart but we must consider that Walmart is in the retail industry. This means that sales and profits will fluctuate depending on the season. In this case the quarter for 2022 included major holidays such as Thanksgiving, Christmas, and many more major holidays. The first quarter of the fiscal year is also historically the slowest quarter for retail companies. Therefore, it is evident that quarter four is always a huge quarter for Walmart's sales and profit and a decrease in the first quarter of the next fiscal year is almost to be expected. More specifically, the Sam's Club portion had an extraordinary first quarter of the 2023 fiscal year growing sales 17.5% while Walmart U.S. and Walmart International lagged behind reporting a 4% increase and 13% decrease respectively. Sam's Club's recent triumphs can be partially attributed to the spike in gas prices. Once gas prices started to skyrocket, memberships for Sam's Club seemed to follow and analysts believe that this is no coincidence. Analyst Stephanie Wissink stated: "Regardless of what your consumer income profile looks like, we know that even the high-income consumer loves to find a way to value-hack the system, and gas tends to be the way that the Club channel does that". This statement from Stephanie encapsulates the primary reason for Sam's Club's first quarter growth.

Walmart performed very well during the recession. Walmart being an essential retailer didn't just survive the recession but its sales skyrocketed. Walmart did not reduce their annual dividend over the period of recession but increased it for stockholders going forward. The Company continued to provide returns to shareholders through share repurchases and dividends, the use of share repurchase authorization over a certain period or the source of funding of a certain portion of their share repurchases. Walmart's sources of liquidity, includes their cash, continuing to be adequate or sufficient to fund and finance their operations, expansion activities, dividends and share repurchases, to meet their cash needs and to fund their operations. Dividend per common summon share has steadily increased from 2016 to 2020. In 2016 dividends declared per common share was 1.96. In 2017 dividends declared per common share was 2.00. In 2018 dividends declared per common share was 2.04. In 2019 dividends declared per common share was 2.08. In 2020 dividends declared per common share was 2.12. Walmart uses some of its cash flows to fund dividends on their common stock and share repurchases.

Although a number of factors affect stock prices, supply and demand in the market at any particular time ultimately determine the price. Based on a company's earnings and profitability from manufacturing and selling goods and services, fundamental considerations determine stock prices. Technical considerations include stock's history, momentum of operations, investor and trader activity etc. They are related to a stock's price history in the market. The fair value of performance share units is determined on the date of grant using the Company's stock price discounted for the expected dividend yield through the vesting period and is recognized over the vesting period. The weighted-average discount for the dividend yield used to determine the fair value of performance share units in fiscal 2020, 2019 and 2018 was 5.1%, 6.2% and 7.2%, respectively. Walmart's stock price during the recession period went from USD $47.58 on January 18th, 2008 to a peak of USD $59.70 on September 19th, 2008 and then slightly dipping to USD $54.63 on December 12th, 2008. Over the period of recession, Walmart's annual stock price increased and it assisted them in paying dividends to stockholders down the line.

A cash flow statement is a type of financial statement that gives total information about all of the cash inflows a business makes from continuing activities and outside investment sources. It also includes any cash outflows made within a specific time period to cover investments and business expenses. The cash flow statement for Walmart really helps us look at all the cash inflows and outflows of the company. The Cash flow statement for Walmart tells us that on Jan 31 2017, Net cash flow provided by operating activities was $31,530,000. Net cash used in investing activities was ($13,987,000) and net cash used in financing activities was ($18,929,000). Jan 31 2018 Net cash flow provided by operating activities was $28,337,000. Net cash used in investing activities was ($9,060,000) and net cash used in financing activities was ($19,875,000). Jan 31 2019 Net cash flow provided by operating activities was $27,753,000. Net cash used in investing activities was ($24,036,000) and net cash used in financing activities was ($2,537,000). Jan 31 2020 Net cash flow provided by operating activities was $25,225,000. Net cash used in investing activities was ($9,128,000) and net cash used in financing activities was ($14,299,000). Jan 31 2021 Net cash flow provided by operating activities was $36,074,000. Net cash used in investing activities was ($10,071,000) and net cash used in financing activities was ($16,117,000). Walmart noticed an increase in net cash provided by operating activities from 2020 to 2021. Walmart noticed a decrease from 2020 to 2021 in net cash used in investing activities. Walmart also noticed a decrease from 2020 to 2021 in net cash used in financing activities.

Walmart's strategy moving forward includes improving their customer- facing initiatives in stores and clubs and creating a seamless omni-channel experience for their customers. The team plans to allocate more capital to supply chain, omni-channel initiatives, technology and store remodels and less to new store club openings essentially building up what they already have rather than continuing to expand. Based on their allocation of capital expenditures, Walmart allotted $3 billion dollars more to supply chain, omni-channel, technology, and remodeling in fiscal 2022 versus fiscal 2021 and plans to stay the course. For fiscal 2023, Walmart is projecting that capital expenditures will be approximately $18 billion, continuing to focus on supply chain, automation, customer-facing initiatives and technology (Management Discussion and Analysis).

One of Walmart's efforts to improve technology and the customer experience was with the acquisition of Volt Systems earlier this year. Walmart acquired Volt Systems to fortify store insight and decisioning. Volt Systems provides suppliers with enhanced on-demand visibility into merchandising resources and reaffirms Walmart's goal of giving customers an omni-channel shopping experience that's seamless. Walmart's acquisition of Volt Systems is meant to enhance the shopping experience for their customers by optimizing the product assortment available using current store-level data, actionable analytics, and shelf intelligence for suppliers to plan and forecast to reduce out-of-stocks. Out-of-stock items and overall supply chain issues have been a recurring issue since the Covid-19 pandemic began. Utilizing this technology will both be beneficial for Walmart shoppers and for Walmart sales. The ecommerce business has been on the rise for Walmart since the pandemic and with this technology it will only enhance their ecommerce business more, rivaling Amazon as the top contender in the ecommerce business.

Walmart announced in April that they had hired a new Executive Vice President and Chief Financial Officer. John Rainey filled the position coming from PayPal where he served as the CFO and EVP, Global Customer Operations. He also served as EVP and CFO for United Airlines. Additionally, Walmart Canada recently made multiple changes to its executive team to aid in its continued growth. These changes are part of Walmart's transformation journey with customer experience both in-store and online. Walmart Canada named a new chief operations officer, chief merchandising officer, chief ecommerce officer and an executive vice president, transformation officer. Nabeela Ixtabalan, the new chief operations officer, will oversee the operations and performance of more than 400 stores in Canada serving more than 1.5 million customers. Sam Wankowski, the new chief merchandising officer, is responsible for ensuring that customers have convenient access to food, apparel, general merchandise, and health and wellness offerings. Laurent Duray, the new chief ecommerce officer, will lead cross functional teams to accelerate the growth of Walmart Canada's online business. This position and Walmart's acquisition of Volt Systems could go hand in hand after the acquisition is finalized and the new technology is implemented company wide. Finally, John Bayliss takes on the role of the newly created executive vice president, transformation officer role. He is responsible for driving the strategy, innovation, corporate development, new store format, real estate and transformation agenda for Walmart Canada.

Investing in Walmart is a very strategic move. Walmart is becoming a more innovative company in that it is taking steps to rival companies such as Amazon. Walmart's take on expansion of the business does not mean opening more stores. Walmart has taken the initiative to improve on its current stores, online presence, and customer relations and continues to grow its international business.Walmart's focus on expansion into emerging markets provides investors some stability as they grow their international portfolio by backing a well-known company.The decision to acquire Volt Systems is a huge step in the right direction to begin rivaling companies like Amazon. Utilizing Volt Systems technology will enhance on-demand visibility into merchandising resources and reaffirm Walmart's goal of giving customers an omni-channel shopping experience that's seamless.Technology investments made by Walmart allow the company to remain relevant and profitable in spite of increased competition in the ecommerce market.This fiscal year alone, Walmart has been able to generate $572.8 billion dollars in sales which is $13.6 billion higher than in their previous fiscal year. Walmart's net income is $13.9 billion this year which is an increase from prior year's net income with operating expenses decreasing compared to prior fiscal year which benefited from growth in comparable sales. Regardless of the limitations during the fiscal year, such as issues pertaining to COVID-19, government regulations, and supply chain issues, the net sales of Walmart still grew strongly and positively. Walmart has been able to adapt and overcome all challenges through a refreshed and increased focus on ecommerce sales, robust international growth in marketplace and fulfillment services, and new ventures such as Walmart Connect.Walmart's trajectory continues to go in a positive direction and shows no signs of slowing down which is the reason why investors should invest in the company.

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