Walmart Inc.

Greetings. Welcome to Walmart's fourth quarter fiscal year 2024 earnings conference call. At this time, all participants are in listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance during today's call, please press star zero from your telephone keypad. Please note this conference is being recorded. At this time, I'll now turn the conference over to Steph Wissink, Senior Vice President of Investor Relations. Steph, you may now begin.

Thank you and welcome, everyone. The format of today's call will follow prior quarters. First, our CEO, Doug McMillan, will share his reflections on the quarter in gear. Then our CFO, John David Rainey, will review our Q4 and Fiscal 24 results, provide perspective on the key drivers of our financial framework, and offer initial guidance for Fiscal 25. Following these remarks, we'll take your questions. At that time, we will be joined by our segment CEOs, John Ferner from Walmart U.S., Cath McClay from Walmart International, and Chris Nicholas from Sam's Club. In order to address as many questions as we can, please limit yourself to one question. Today's call is being recorded and management may make forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from these statements. These risks and uncertainties include, but are not limited to, the factors identified in our filings with the SEC. Please review our press release and accompanying slide presentation for a cautionary statement regarding forward-looking statements, as well as our entire safe harbor statement and non-GAAP reconciliations on our website at stock.walmart.com. Doug, we are now ready to begin.

Good morning and thanks for joining us to talk about our business. Our team delivered a great quarter, finishing off a strong year. We drove sales growth of 4.9% and adjusted operating profit growth of 10.9% in constant currency. Highlights include higher transaction counts and unit volumes, gains in market share in the US and internationally, improved in-stock levels with inventory being in great shape and down versus last year, Strong performance in Walmart U.S. customer experience scores, even during the high-volume days before Christmas. Plus, this year, we passed $100 billion in global e-commerce sales for the first time. We had a very good holiday season. We were strong in the U.S., Mexico, Canada, and India, where we had the best big billion days ever. And we continued the strong performance in China with the start of Chinese New Year. Typically, we see some of our customer experience scores dip during the high-volume hours and days we experience during the holidays. But during Q4, the Walmart U.S. team delivered three-year high customer scores in our stores, for pickup and delivery from stores, and for those orders that flow directly from our e-commerce fulfillment centers. I'm excited about the Omnichannel Net Promoter Score trends the team is driving. Across countries, we continue to see a customer that's resilient, but looking for value. As always, we're working hard to deliver that for them, including through our rollbacks on food pricing in Walmart US. Those were up significantly in Q4 versus last year, following a big increase in Q3. Our general merchandise prices are lower than a year ago, and even two years ago in some categories, which means our customers are finding value in areas like apparel and hard lines. In food, prices are lower than a year ago in places like eggs, apples, and deli snacks, but higher in other places like asparagus and blackberries. Dry grocery and consumables categories like paper goods and cleaning supplies are up mid-single digits versus last year, and high teens versus two years ago. Private brand penetration is up in many of the countries where we operate, including the United States. During our Q3 call, I mentioned that we might find ourselves in a deflationary position early in calendar 24. In Walmart US, we're there in general merchandise, but the slope of the decline softened during Q4, meaning the prices are lower than a year ago, but not as much as the trend line would have suggested at the end of Q3. We saw the trend line for food and consumables in Walmart US soften too, resulting in our retail prices in food and consumables being slightly higher than a year ago. In total, for Walmart US, our year-end retail prices on like-for-like items were inflated by about 80 basis points. Importantly, we're encouraged by our strength in terms of units and transactions. Sam's Club US is in a similar pricing position to Walmart US, and outside the US, our pricing comparisons to a year ago are in more of a normal range. We're excited about the momentum we see, and we're pleased with the quarter. But my focus stays primarily on what we're building for the longer term. That future is an omnichannel one, where we simultaneously strengthen our stores and clubs and build a more compelling e-commerce business. As it relates to strengthening our stores and clubs, we're investing in remodels and supply chain automation to improve the customer experience and increase productivity. Those things are going well. We'll remodel 928 stores and clubs globally over the next year, including 650 stores in the U.S., Not long ago, we shared that we would be building 30 new Sam's Clubs in the U.S. over the next several years, and more recently, we announced we will add more than 150 super centers and neighborhood markets in the U.S. over the next five years. Most of those are new builds and locations where we need a new store, but a few of them will be discount store conversions to a super center where we're relocating in the same community. Outside the U.S., we'll open around 230 stores and clubs next year, mainly in Mexico and Central America, and in China, where they'll mostly be Sam's Clubs. We ended the year with 47 Sam's Clubs in China, and they continue to be quite strong on the top and bottom line. We are, by far, the leading membership club operator in China with 28 years of experience there. So our physical fleet is getting stronger and it plays a hybrid role serving customers and members when they visit and simultaneously enabling an important portion of e-commerce. Beyond our stores and clubs, we're continuing to strengthen our first and third-party e-commerce capabilities and scale those businesses around the world. The combination of marketplace and the commissions that go with it, fulfillment services, membership, advertising, and our smaller but fast-growing data monetization business enable us to grow our bottom line faster than our top line while delivering everyday low prices for our customers and investing in our associates at the same time. Marketplace is an engine for our business. As we've added more sellers in the US, we've seen more of them use our fulfillment capabilities. Marketplace is also the fastest growing aspect of e-commerce for us outside the US. That growth helps us drive our global ad business. For now, we see the biggest dollar impact from Walmart US and in India from Flipkart. But as these businesses scale in places like Mexico and Canada, we expect to see a similar relationship. Globally, we drove advertising growth of 28% for the year to reach $3.4 billion. Our announcement today that we've agreed to acquire Vizio gives us the opportunity to reach and serve customers in new ways and connect more dots for those that advertise with us. Membership's another area where we'll continue to enhance our offerings. Walmart Plus members spend nearly twice as much with us as non-members, and they buy more over the course of a year. At Sam's Club US, we're rolling out new exit technology that enables our members to use Scan and Go to just walk out after completing their transaction on their phone, further enhancing their membership. Last year, we began describing ourselves as a people-led, tech-powered, omnichannel retailer dedicated to helping people save money and live better. This description is really resonating for us inside the company. We can prioritize our associates, our values, and our culture, and put impactful technology to work to help us fulfill our purpose, strengthen the customer and member experience, and strengthen our company. Here's some recent examples of us being tech powered. Our new generative AI powered search on the Walmart US app, which rolled out to iOS users last month and is coming to Android users this month, is a great example. One of those popular searches this month was, help me buy a Valentine's Day gift. And rather than searching separately for things like chocolates, a car, jewelry, flowers, the search returns a list of results that are relevant and curated. And Flipkart launched a similar generative AI search tool, which was available just in time for big billion days. Another example is our ability to provide customers and members with more convenient and affordable delivery. We already offer express delivery in the U.S. where customers can get their orders delivered fast. But what if you need something faster? There's a pot of chili on the stove and you realize you forgot chili seasoning. Drone delivery can get it to you in 15 minutes or less. Delivering by drone isn't new to us. Over the last two years, we've operated 37 hubs across seven states, completing 20,000 deliveries. By the end of the year, we'll make it available to about 75% of households in Dallas-Fort Worth. I'm really excited about how the pieces are coming together in the near term. Our customers will have an improved store experience given our remodels. They can pick up an order, have it delivered to their doorstep or into their home, or get a fast drone delivery when they want it. And this flexibility is enabled by a more intelligent, more connected, and more automated supply chain. From scaled businesses to our faster-growing newer businesses, we're well on track to continue to hit the financial targets we laid out and make important investments for the future. And while we do this, we can grow in a way that helps us achieve our goals of creating opportunities for our associates and becoming a more sustainable business. In 2017, we announced a bold ambition to work with our suppliers to reduce, avoid, or sequester one gigaton, that's one billion metric tons, of greenhouse gas emissions by 2030. We call it Project Gigaton. Our merchants and suppliers got to work and made investments in practical things like energy efficiency, packaging redesign, and load optimization. We've reported steady progress since then, and we're excited to say that our suppliers have now reported projects exceeding that 1 billion metric ton mark six years early. We'll continue to work with our suppliers on real initiatives with real world impacts that make our products better and our business stronger. As we think about developing our associates, we want them to feel, think, and act like owners. The degree to which our team takes ownership will have a big impact on our level of success. That's what motivated us to make shares of Walmart stock part of U.S. store manager compensation. It's also why we decided to do a three for one stock split. Today, more than 400,000 associates participate in our associate stock purchase plan. That's a big number, but hopefully even more will choose to participate and take advantage of the 15% the company contributes for the first $1,800 purchased by an associate each year. Psychologically, it just feels better to buy a whole share rather than a fraction. We believe in our plan, and we're looking for ways, in addition to our 401k and the match that goes along with it, to help our associates build wealth and do more than just earn a paycheck. I'll close by thanking our associates for delivering a great quarter to end a year where we've accomplished so much. We're out to build on our momentum. We have strong omnichannel businesses globally, and they're getting stronger. We're focused on executing the plans we have for this year and beyond, which we believe will deliver top and bottom line growth within the framework we've discussed and improve ROI over time. With that, I'll turn it over to John David.