Walmart in the 21st Century Essay

Submitted By phanindra459
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Pages: 9

WALMART IN THE 21st CENTURY

Introduction:

The company Wal-Mart, founded by Sam Walton in 1945, is one of the most recognizable names in the retail sector in many countries of the world. Wal-Mart is having around 9320 stores and club locations in 15 countries employ 2.1 million associates, serving more than 176 million customers a year (Walmart, WalMart Stores). Sam Walton, in his autobiography said 
“If we work together, we’ll lower the cost of living for everyone…we’ll give the world an opportunity to see what it’s like to save and have a better life.”
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* Current Situation:
Walmart Stores U.S. is the company's largest division, accounting for $258 billion, or 63.8% of total sales for financial year 2010. It consists of three retail formats that have become commonplace in the United States: Discount Stores, Supercenters and Neighborhood Markets (Walmart, 2011). Walmart International is a fast-growing part of Walmart's overall operations, with 4,803 stores and more than 730,000 associates in 14 countries outside the continental U.S (Walmart International). There are wholly owned operations in Argentina, Brazil, Canada, and the UK. With 2.1 million employees worldwide, the company is the largest private employer in the US and Mexico, and one of the largest in Canada. (Walmart Corporate Fact Sheet.pdf) In the financial year 2010, Walmart's international division sales were $100 billion, or 24.7% of total sales (Walmart International). Walmart generates 63.8 % of Revenue from Walmart Stores, 11.5 % of Revenue from Sam’s club and 24.7 % of revenue from Walmart International (Wikinvest Walmart). Net Sales increased 3.4 % to $419 billion and net income increased 14 % to %16.4 billion (Wikinvest Walmart).

Exhibit: 1

Financial Summary of past 5 years:

As of and for the Fiscal Years Ended January 31 | 2011 | 2010 | 2009 | 2008 | 2007 |
Net Sales ($) | 418952 | 405132 | 401087 | 373821 | 344759 |
Net sales increase (%) | 3.4 | 1 | 7.3 | 8.4 | 11.6 |
Comparable sales in the United States (2) (%) | -0.6 | -0.8 | 3.5 | 1.6 | 2 |
Walmart U.S. (%) | -1.5 | -0.7 | 3.2 | 1 | 1.9 |
Sam’s Club (%) | 3.9 | -1.4 | 4.9 | 4.9 | 2.5 |
Gross profit margin (%) | 24.7 | 24.9 | 24.2 | 24 | 23.4 |
Operating, selling, general and administrative expenses, as a percentage of net sales (%) | 19.3 | 19.7 | 19.3 | 19 | 18.5 |
Operating income ($) | 25542 | 24002 | 22767 | 21916 | 20552 |
Income from continuing operations attributable to Walmart (%) | 15355 | 14449 | 13235 | 12841 | 12224 |
Net income per share of common stock: ($) | | | | | |
Diluted net income per common share from continuing operations attributable to Walmart ($) | 4.18 | 3.73 | 3.35 | 3.15 | 2.93 |
Dividends declared per common share ($) | 1.21 | 1.09 | 0.95 | 0.88 | 0.67 |
Financial Position | | | | | |
Inventories ($) | 36318 | 32713 | 34013 | 34690 | 33235 |
Property, equipment and capital lease assets, net ($) | 107878 | 102307 | 95653 | 96867 | 88287 |
Total assets ($) | 180663 | 170407 | 163096 | 163200 | 151274 |
Long-term debt, including obligations under capital leases ($) | 43842 | 36401 | 34549 | 33402 | 30735 |
Total Walmart shareholders’ equity ($) | 68542 | 70468 | 64969 | 64311 | 61298 |
Unit Counts | | | | | |
Walmart U.S. Segment | 3804 | 3755 | 3703 | 3595 | 3488 |
Walmart International Segment | 4557 | 4099 | 3595 | 3093 | 2733 |
Sam’s Club Segment | 609 | 605 | 611 | 600 | 588 |
Total units | 8970 | 8459 | 7909 | 7228 | 6809 |
(Wikinvest Walmart Shareholders Filing, 2011)
| Net Sales in 2011 | Percent of total in 2011 | Percent Change in 2011 | Net sales in 2010 | Percent of Total in 2010 | Percent Change in 2010 | Net Sales in 2009 | Percent of Total in 2009 |
Walmart US | $260,261 | 62.1% | 0.1% | $259,919 | 64.2% | 1.1% | $256,970 | 64% |
Walmart International | $109,232 | 26.1% | 12.1% | $97,407 | 24% | 1.3% | 96,141 | 24% |
Sam’s Club | $49,459 | 11.8% | 3.5% | $47,806 | 11.8% | -0.4% | 47,976 | 12% |…