Highlights
. Walmart reports third quarter diluted earnings per share (EPS) of $0.95, compared to an adjusted $0.82 per share last year. The company's EPS for the third quarter included a tax benefit of $191 million, which is approximately $0.05 cents per share. Excluding this tax benefit, the company's EPS was within its third quarter guidance of $0.87 to $0.91.
The company is raising its full-year EPS guidance to a range of $4.08 to $4.12, from its previous range of $3.95 to $4.05.
Net sales for the third quarter were $101.2 billion, an increase of 2.6 percent.
Walmart International continues to drive growth for the company, as net sales rose 9.3 percent to $26.9 billion.
The company leveraged operating expenses for the fourth consecutive quarter.
Consolidated operating income for the third quarter was $5.6 billion, up 3.1 percent from last year.
Operating income grew faster than sales at both Walmart U.S. and Walmart International.
Walmart U.S. comparable store sales declined 1.3 percent in the third quarter 13-week period ended Oct. 29, 2010. Sam's Club posted a comparable sales increase, without fuel, of 2.4 percent for the same period.
Return on investment² (ROI) for the trailing 12 months ended Oct. 31, 2010 was 18.6 percent, up from 18.4 percent compared to the same period last year.
Year to date, the company has returned $14.3 billion to shareholders through dividends and share repurchase.
1Effective with the second quarter of fiscal year 2011, Walmart changed the methodology for valuing its inventory.The retrospective application of this accounting change results in adjustments to reported amounts for last fiscal year.The company provided adjusted financial statements for all of fiscal year 2010 and the first quarter of fiscal year 2011 on its website reflecting these changes.The $0.82 adjusted EPS compares to the previously reported EPS of $0.84.See additional information on this accounting change in the notes on page 5.
2See additional information at the end of this release regarding non-GAAP financial measures.


BENTONVILLE, Ark., Nov 16, 2010 (BUSINESS WIRE) -- Wal-Mart Stores, Inc. (NYSE: WMT) today reported financial results for the quarter ended Oct. 31, 2010. Net sales for the third quarter of fiscal year 2011 were $101.2 billion, an increase of 2.6 percent from $98.7 billion in the third quarter last year. Income from continuing operations attributable to Walmart for the quarter was $3.4 billion, up from $3.2 billion in the third quarter last year.

Diluted earnings per share from continuing operations attributable to Walmart ("EPS") for the third quarter of fiscal year 2011 were $0.95, including a tax benefit of $191 million, or approximately $0.05. The tax benefit is due to favorable adjustments to current transfer pricing policies after negotiations with a foreign tax jurisdiction during the third quarter. This $0.95 compares to an adjusted diluted EPS of $0.82 in the third quarter last year.

"Walmart performed well in the third quarter, and we delivered solid earnings per share growth for our shareholders," said Mike Duke, Wal-Mart Stores, Inc. president and chief executive officer. "Our company now has delivered four consecutive quarters of operating expense leverage, and we continue to grow operating income faster than sales."

Walmart continues to expand its ability to reach more customers around the world through new units and multi-channel initiatives. The company added almost 10 million square feet of retail space this quarter, with 37 percent of the square footage growth in Walmart International. International net sales grew more than 9 percent this quarter compared to last year's third quarter.

"Our International business continues to deliver impressive results, with sales up more than nine percent," Duke said. "We also were pleased with the ongoing sales momentum at Sam's Club and expect that momentum to continue in the fourth quarter. Our Walmart U.S. business is on the right track, with third quarter comp sales within guidance and operating income growing faster than sales.

"Walmart U.S. will be the price leader this holiday season, and I am confident about improving comp trends for the fourth quarter," Duke added. "I'm pleased that we increased our full-year earnings per share guidance to reflect the tax benefit from the third quarter and our expectations for our business performance in the fourth quarter."

The company ended the third quarter with year-to-date free cash flow³ of $2.9 billion, compared to $3.6 billion in the prior year. ROIfor the trailing 12 months ended Oct. 31, 2010 was 18.6 percent, up from 18.4 percent for the comparable period last year.

"We're meeting our goal of delivering stable ROI and we are extremely satisfied with our ROI performance," said Tom Schoewe, executive vice president and chief financial officer. "We remain focused on our priorities of growth, leverage and returns."

Earnings Guidance

"Based on our expectations for the U.S. sales environment in the fourth quarter, we expect diluted earnings per share from continuing operations attributable to Walmart to range from $1.29 to $1.33," said Schoewe.

3See additional information at the end of this release regarding non-GAAP financial measures.

This compares to an adjusted $1.264 per share last year, which included a net benefit of approximately six cents per share related to certain tax matters and restructuring charges.

"Our updated fiscal year 2011 guidance of $4.08 to $4.12 earnings per share is an increase from the previous range of $3.95 to $4.05 per share," Schoewe said. "The full-year increase in our EPS guidance reflects the tax benefit from the third quarter, and our expectations for solid underlying operational performance by our segments in the fourth quarter."

This new full year guidance assumes that currency exchange rates remain at current levels. The adjusted EPS for fiscal year 2010 was $3.734, which included the same six cents benefit mentioned above.

"I'm also pleased that we continue to provide a strong return to shareholders through dividends and an aggressive share repurchase program," said Schoewe. "Between dividends and share repurchase, Walmart has returned $14.3 billion to shareholders during the first nine months."

The company's board of directors approved a new $15 billion share repurchase program on June 4, 2010, which replaced the previous $15 billion authorization. Walmart repurchased $3.9 billion in shares during the third quarter, raising this year's total to $11.0 billion. The company still has $8.5 billion remaining under the current authorization.