Wal-Mart Stores, Inc. (WMT)
Q3 2009 Earnings Call Transcript
November 13, 2008 7:30 a.m. ET

Executives

Carol Schumacher – Vice President, Investor Relations
Lee Scott - President and Chief Executive Officer
Charles Holley - Executive Vice President, Finance and Treasurer
Eduardo Castro-Wright – Wal-Mart Stores US President and Chief Executive Officer
Mike Duke - Vice Chairman, Wal-Mart International
Doug McMillon – Vice Chairman - International
Tom Schoewe – Executive Vice President and Chief Financial Officer

Presentation

Operator

This call is the property of Wal-Mart Stores, Inc. and intended solely for the use of Wal-Mart shareholders. It should not be reproduced in any way.

This call will contain statements that Wal-Mart believes are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and intended to enjoy the protection of the Safe Harbor for forward-looking statements provided by that Act. These forward-looking statements generally are identified by the use of the words or phrases “can,” “over reduce,” “expect,” “going to,” “guidance,” “may continue,” “projected,” “will affect,” “will be,” “will benefit,” “will come,” “will continue,” “will find,” “will help,” “will hold,” and “will see” or similar words or phrases in those statements.

Similarly, descriptions of our objectives, plans, goals, targets or expectations are forward-looking statements. These statements discuss among other things our anticipated US comparable store sales for the current fiscal quarter, our management’s expectations that changes in currency exchange rates will be detrimental to comparison of this year’s fourth quarter sales over last year’s fourth quarter sales, our anticipated diluted earnings per share from continuing operations for the current fiscal quarter and for fiscal year 2009.

Our anticipated tax rate for fiscal year 2009 and our management’s expectations as to factors influencing that tax rate, our management’s expectations that foreign exchange will negatively impact our fourth quarter results and our earnings per share from continuing operations for the fourth quarter, our management’s expectations for our return on investment for fiscal year 2009 and that plans for our Wal-Mart US operations will continue to increase return on investment, our management’s expectations as to price leadership continuing to drive Wal-Mart success, continued investment in those international markets with superior growth opportunities that can deliver enhanced returns, the benefit of improving the US healthcare system and energy policy and strengthening the US economy and consumers having more money to spend with us and others, our price leadership helping customers in difficult economic times, our capital expenditure for fiscal year 2009, Wal-Mart US’s project impact plan continuing to drive the operating segments business and momentum and to have a positive impact on return on investment and improved returns coming by rebalancing new strength with accelerated remodeling in the next few years in our Wal-Mart US segment.

Wal-Mart US’s message for customers during the 2008 holiday season, Wal-Mart US continuing to drive merchandise assortments to meet its Win/Play/Show approach, Wal-Mart US product highlights on certain days, Wal-Mart US continuing to improve in-store branding and communications, Wal-Mart US’s customers continuing to experience the Wal-Mart brand in stores that are fast, clean and friendly, the stronger US dollar starting to have a negative impact on our international segment and likely affecting our international segment in the fourth quarter of the fiscal year 2009.

Sam’s Club members continuing to focus on value and being selective in discretionary purchases, Sam’s Club continuing to leverage its strength, Sam’s Club focusing on certain membership achievements, Sam’s Club members finding value in exciting offerings and certain merchandise categories in the holiday season and being helped by Sam’s Club to have a good Christmas and Sam’s Club holding a member’s only event with special merchandise on a certain day and the anticipation and expectations of Wal-Mart and its management as to future occurrences and trends.

These forward-looking statements are subject to risks, uncertainties and other factors domestically and internationally including general economic conditions, our cost of goods, competitive pressures, inflation, consumer credit availability, spending patterns and debt levels, currency exchange fluctuations and volatility, trade restrictions, changes in tariff and freight rates, fluctuations in the cost of gasoline, diesel fuel and other energy, transportation, utilities, labor and healthcare, accident costs, casualty and other insurance costs, interest rate fluctuations, financial and capital market conditions, geopolitical conditions and events, weather conditions, storm-related damage to our facilities, the availability of attractive investment opportunities in international markets, regulatory matters and other risks.

We discuss certain of these matters more fully in our filings with the SEC including our most recent annual report on Form 10-K and the information on this call should be read in conjunction with that annual report on Form 10-K and together with all our other filings including current reports on Form 8-K we have made with the SEC through the date of this call.

We urge you to consider all these risks, uncertainties and other factors carefully in evaluating the forward-looking statements we make in this call. Because of these factors changes in facts, assumptions not being realized or other circumstances, our actual results may differ materially from anticipated results, expressed or implied in these forward-looking statements.

The forward-looking statements made in this call are made on and as of the date of this call and we undertake no obligation to update these forward-looking statements to reflect subsequent events or circumstances. The comp store sales for our total US operations and for our Sam''s Club segment discussed on this call exclude the impact of fuel sales in our Sam''s Club segment. That measure, our return on investment, and our cash flow coverage ratio as discussed in this call may be considered non-GAAP financial measures. Reconciliations of those non-GAAP financial measures to the most directly comparable GAAP measures are available for review on the Investor Relations portion of our corporate website at www.walmartstores.com/investors.

Carol Schumacher

Welcome to the Wal-Mart Stores third quarter earnings call for fiscal year 2009. This is Carol Schumacher, VP of Investor Relations. The replay of this call and related materials about the quarter are available on our website.

We’ve changed the format for our call and beginning today each operating CEO will cover his business. Here’s today’s agenda. Lee Scott will provide opening comments on our business and the economy. Charles Holley will cover the detailed consolidated financial results for the company. Eduardo Castro-Wright will discuss the results for Wal-Mart US followed by Mike Duke on Wal-Mart International and the results of our largest countries. Doug McMillon is up next with Sam’s Club followed by Tom Schoewe who will close our call with the status of our financial metrics and comments about the fourth quarter including guidance.

The Investor Relations team is available for follow up on the third quarter today and with that let’s get on with the results. Lee.

Lee Scott