UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



☒			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the quarterly period ended April 30, ~~2020~~.2021.



☐			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the transition period from to .

Commission File Number 001-6991

WALMART INC.

(Exact name of registrant as specified in its charter)



Delaware		71-0415188
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

702 S.W. 8th Street		72716
Bentonville	AR
(Address of principal executive offices)		(Zip Code)

Registrant's telephone number, including area code: (~~479~~)(479) 273-4000

Former name, former address and former fiscal year, if changed since last report: N/A

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.10 per share

WMT

New York Stock Exchange

1.900% Notes Due 2022

WMT22

New York Stock Exchange

2.550% Notes Due 2026

WMT26

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

~~Securities registered pursuant to Section 12(b) of the Act:~~



~~Title of each class~~	~~Trading Symbol(s)~~	~~Name of each exchange on which registered~~
~~Common Stock, par value $0.10 per share~~	~~WMT~~	~~New York Stock Exchange~~
~~1.900% Notes Due 2022~~	~~WMT22~~	~~New York Stock Exchange~~
~~2.550% Notes Due 2026~~	~~WMT26~~	~~New York Stock Exchange~~

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☒

Accelerated Filer

☐

Non-Accelerated Filer

☐

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The registrant had ~~2,831,953,450~~2,802,145,927 shares of common stock outstanding as of June ~~1, 2020.~~2, 2021.

Table of Contents

Walmart Inc.

Form 10-Q

For the Quarterly Period Ended April 30, ~~2020~~2021

Table of Contents

PART I. FINANCIAL INFORMATION


~~Item 1.~~	~~Financial Statements~~

Item 1.Financial Statements

Walmart Inc.

Condensed Consolidated Statements of Income

(Unaudited)


	Three Months Ended April 30,							Three Months Ended April 30,
(Amounts in millions, except per share data)	2020			2019			(Amounts in millions, except per share data)		2021		2020
Revenues:							Revenues:
Net sales	$	133,672		$	122,949		Net sales		$	137,159	$	133,672
Membership and other income	950			976			Membership and other income		1,151		950
Total revenues	134,622			123,925			Total revenues		138,310		134,622
Costs and expenses:							Costs and expenses:
Cost of sales	102,026			93,034			Cost of sales		103,272		102,026
Operating, selling, general and administrative expenses	27,372			25,946			Operating, selling, general and administrative expenses		28,129		27,372
Operating income	5,224			4,945			Operating income		6,909		5,224
Interest:							Interest:
Debt	510			588			Debt		481		510
Finance lease	82			85			Finance lease		85		82
Interest income	(43		)	(48		)	Interest income		(30)		(43)
Interest, net	549			625			Interest, net		536		549

Other (gains) and losses	(721		)	(837		)	Other (gains) and losses		2,529		(721)
Income before income taxes	5,396			5,157			Income before income taxes		3,844		5,396
Provision for income taxes	1,322			1,251			Provision for income taxes		1,033		1,322

Consolidated net income	4,074			3,906			Consolidated net income		2,811		4,074
Consolidated net income attributable to noncontrolling interest	(84		)	(64		)	Consolidated net income attributable to noncontrolling interest		(81)		(84)
Consolidated net income attributable to Walmart	$	3,990		$	3,842		Consolidated net income attributable to Walmart		$	2,730	$	3,990


Net income per common share:							Net income per common share:
Basic net income per common share attributable to Walmart	$	1.41		$	1.34		Basic net income per common share attributable to Walmart		$	0.97	$	1.41

Diluted net income per common share attributable to Walmart	1.40			1.33			Diluted net income per common share attributable to Walmart		0.97		1.40

Weighted-average common shares outstanding:							Weighted-average common shares outstanding:
Basic	2,831			2,869			Basic		2,815		2,831
Diluted	2,849			2,886			Diluted		2,829		2,849

Dividends declared per common share	$	2.16		$	2.12		Dividends declared per common share		$	2.20	$	2.16

See accompanying notes.

Table of Contents

Walmart Inc.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

Three Months Ended April 30,
(Amounts in millions) 2020 2019
Consolidated net income $ 4,074
$ 3,906
Consolidated net income attributable to noncontrolling interest (84 ) (64 )
Consolidated net income attributable to Walmart 3,990
3,842

Other comprehensive income (loss), net of income taxes
Currency translation and other (3,968 ) 507
Net investment hedges 157
108
Cash flow hedges (279 ) (131 )
Minimum pension liability 15
1
Other comprehensive income (loss), net of income taxes (4,075 ) 485
Other comprehensive (income) loss attributable to noncontrolling interest 712
(34 )
Other comprehensive income (loss) attributable to Walmart (3,363 ) 451

Comprehensive income (loss), net of income taxes (1 ) 4,391
Comprehensive income (loss) attributable to noncontrolling interest 628
(98 )
Comprehensive income attributable to Walmart $ 627
$ 4,293


	Three Months Ended April 30,
(Amounts in millions)		2021		2020
Consolidated net income		$	2,811	$	4,074
Consolidated net income attributable to noncontrolling interest		(81)		(84)

Consolidated net income attributable to Walmart		2,730		3,990

Other comprehensive income (loss), net of income taxes
Currency translation and other		2,959		(3,968)
Net investment hedges		(1,202)		157
Cash flow hedges		20		(279)
Minimum pension liability		1,969		15

Other comprehensive income (loss), net of income taxes		3,746		(4,075)
Other comprehensive loss attributable to noncontrolling interest		74		712

Other comprehensive income (loss) attributable to Walmart		3,820		(3,363)

Comprehensive income (loss), net of income taxes		6,557		(1)
Comprehensive (income) loss attributable to noncontrolling interest		(7)		628

Comprehensive income attributable to Walmart		$	6,550	$	627

See accompanying notes.

Table of Contents

Walmart Inc.

Condensed Consolidated Balance Sheets

(Unaudited)


	April 30,			January 31,			April 30,				April 30,		January 31,		April 30,
(Amounts in millions)	2020			2020			2019			(Amounts in millions)	2021		2021		2020
ASSETS										ASSETS
Current assets:										Current assets:
Cash and cash equivalents	$	14,930		$	9,465		$	9,255		Cash and cash equivalents	$	22,846	$	17,741	$	14,930
Receivables, net	5,029			6,284			5,342			Receivables, net	5,797		6,516		5,029
Inventories	41,217			44,435			44,751			Inventories	46,383		44,949		41,217
Prepaid expenses and other	2,152			1,622			2,391			Prepaid expenses and other	1,565		20,861		2,152

Total current assets	63,328			61,806			61,739			Total current assets	76,591		90,067		63,328


Property and equipment, net	101,872			105,208			104,604			Property and equipment, net	90,996		92,201		101,872
Operating lease right-of-use assets	16,895			17,424			16,833			Operating lease right-of-use assets	13,650		13,642		16,895
Finance lease right-of-use assets, net	4,611			4,417			3,804			Finance lease right-of-use assets, net	3,979		4,005		4,611

Goodwill	29,416			31,073			31,416			Goodwill	28,872		28,983		29,416
Other long-term assets	16,770			16,567			16,148			Other long-term assets	22,493		23,598		16,770
Total assets	$	232,892		$	236,495		$	234,544		Total assets	$	236,581	$	252,496	$	232,892

LIABILITIES AND EQUITY										LIABILITIES AND EQUITY
Current liabilities:										Current liabilities:
Short-term borrowings	$	4,048		$	575		$	4,828		Short-term borrowings	$	362	$	224	$	4,048
Accounts payable	44,096			46,973			45,110			Accounts payable	48,151		49,141		44,096
Dividends payable	4,588			—			4,551			Dividends payable	4,651		0		4,588
Accrued liabilities	20,377			22,296			21,023			Accrued liabilities	21,371		37,966		20,377
Accrued income taxes	1,303			280			729			Accrued income taxes	851		242		1,303
Long-term debt due within one year	5,983			5,362			1,464			Long-term debt due within one year	3,500		3,115		5,983
Operating lease obligations due within one year	1,729			1,793			1,748			Operating lease obligations due within one year	1,448		1,466		1,729
Finance lease obligations due within one year	523			511			435			Finance lease obligations due within one year	507		491		523

Total current liabilities	82,647			77,790			79,888			Total current liabilities	80,841		92,645		82,647

Long-term debt	43,006			43,714			47,425			Long-term debt	40,273		41,194		43,006
Long-term operating lease obligations	15,669			16,171			15,719			Long-term operating lease obligations	12,930		12,909		15,669
Long-term finance lease obligations	4,474			4,307			3,810			Long-term finance lease obligations	3,802		3,847		4,474

Deferred income taxes and other	12,986			12,961			12,792			Deferred income taxes and other	14,143		14,370		12,986


Commitments and contingencies										Commitments and contingencies	0		0		0

Equity:										Equity:
Common stock	284			284			286			Common stock	280		282		284
Capital in excess of par value	2,983			3,247			2,734			Capital in excess of par value	3,424		3,646		2,983
Retained earnings	81,141			83,943			76,276			Retained earnings	82,577		88,763		81,141
Accumulated other comprehensive loss	(16,168		)	(12,805		)	(11,091		)	Accumulated other comprehensive loss	(7,946)		(11,766)		(16,168)
Total Walmart shareholders' equity	68,240			74,669			68,205			Total Walmart shareholders' equity	78,335		80,925		68,240
Noncontrolling interest	5,870			6,883			6,705			Noncontrolling interest	6,257		6,606		5,870
Total equity	74,110			81,552			74,910			Total equity	84,592		87,531		74,110
Total liabilities and equity	$	232,892		$	236,495		$	234,544		Total liabilities and equity	$	236,581	$	252,496	$	232,892

See accompanying notes.

Table of Contents

Walmart Inc.

Condensed Consolidated Statements of Shareholders' Equity

(Unaudited)

Accumulated Total
Capital in Other Walmart
(Amounts in millions) Common Stock Excess of Retained Comprehensive Shareholders' Noncontrolling Total
Shares Amount Par Value Earnings Loss Equity Interest Equity
Balances as of February 1, 2020 2,832
$ 284
$ 3,247
$ 83,943
$ (12,805 ) $ 74,669
$ 6,883
$ 81,552
Consolidated net income —
—
—
3,990
—
3,990
84
4,074
Other comprehensive loss, net of income taxes —
—
—
—
(3,363 ) (3,363 ) (712 ) (4,075 )
Dividends declared ($2.16 per share) —
—
—
(6,117 ) —
(6,117 ) —
(6,117 )
Purchase of Company stock (6 ) (1 ) (26 ) (666 ) —
(693 ) —
(693 )
Dividends declared to noncontrolling interest —
—
—
—
—
—
(359 ) (359 )
Other 6
1
(238 ) (9 ) —
(246 ) (26 ) (272 )
Balances as of April 30, 2020 2,832
$ 284
$ 2,983
$ 81,141
$ (16,168 ) $ 68,240
$ 5,870
$ 74,110


												Accumulated			Total																	Accumulated		Total
						Capital in						Other			Walmart													Capital in				Other		Walmart
(Amounts in millions)	Common Stock					Excess of			Retained			Comprehensive			Shareholders'			Noncontrolling			Total			(Amounts in millions)	Common Stock			Excess of		Retained		Comprehensive		Shareholders'		Noncontrolling		Total
	Shares		Amount			Par Value			Earnings			Loss			Equity			Interest			Equity				Shares	Amount		Par Value		Earnings		Loss		Equity		Interest		Equity
Balances as of February 1, 2019	2,878		$	288		$	2,965		$	80,785		$	(11,542	)	$	72,496		$	7,138		$	79,634
Adoption of new accounting standards on February 1, 2019, net of income taxes	—		—			—			(266		)	—			(266		)	(34		)	(300		)
Balances as of February 1, 2021																								Balances as of February 1, 2021	2,821	$	282	$	3,646	$	88,763	$	(11,766)	$	80,925	$	6,606	$	87,531

Consolidated net income	—		—			—			3,842			—			3,842			64			3,906			Consolidated net income	—	—		—		2,730		—		2,730		81		2,811
Other comprehensive income, net of income taxes	—		—			—			—			451			451			34			485
Dividends declared ($2.12 per share)	—		—			—			(6,071		)	—			(6,071		)	—			(6,071		)
Other comprehensive income (loss), net of income taxes																								Other comprehensive income (loss), net of income taxes	—	—		—		—		3,820		3,820		(74)		3,746

Dividends declared ($2.20 per share)																								Dividends declared ($2.20 per share)	—	—		—		(6,200)		—		(6,200)		—		(6,200)
Purchase of Company stock	(21	)	(2		)	(73		)	(2,012		)	—			(2,087		)	—			(2,087		)	Purchase of Company stock	(21)	(2)		(112)		(2,718)		—		(2,832)		—		(2,832)
Dividends declared to noncontrolling interest	—		—			—			—			—			—			(481		)	(481		)	Dividends declared to noncontrolling interest	—	—		—		—		—		—		(408)		(408)
Other	5		—			(158		)	(2		)	—			(160		)	(16		)	(176		)	Other	5	—		(110)		2		—		(108)		52		(56)
Balances as of April 30, 2019	2,862		$	286		$	2,734		$	76,276		$	(11,091	)	$	68,205		$	6,705		$	74,910
Balances as of April 30, 2021																								Balances as of April 30, 2021	2,805	$	280	$	3,424	$	82,577	$	(7,946)	$	78,335	$	6,257	$	84,592

See accompanying notes.


								Accumulated		Total
				Capital in				Other		Walmart
(Amounts in millions)	Common Stock			Excess of		Retained		Comprehensive		Shareholders'		Noncontrolling		Total
	Shares	Amount		Par Value		Earnings		Loss		Equity		Interest		Equity
Balances as of February 1, 2020	2,832	$	284	$	3,247	$	83,943	$	(12,805)	$	74,669	$	6,883	$	81,552

Consolidated net income	—	—		—		3,990		—		3,990		84		4,074
Other comprehensive loss, net of income taxes	—	—		—		—		(3,363)		(3,363)		(712)		(4,075)




Dividends declared ($2.16 per share)	—	—		—		(6,117)		—		(6,117)		—		(6,117)
Purchase of Company stock	(6)	(1)		(26)		(666)		—		(693)		—		(693)
Dividends declared to noncontrolling interest	—	—		—		—		—		—		(359)		(359)
Other	6	1		(238)		(9)		—		(246)		(26)		(272)
Balances as of April 30, 2020	2,832	$	284	$	2,983	$	81,141	$	(16,168)	$	68,240	$	5,870	$	74,110

See accompanying notes.

Table of Contents

Walmart Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

Three Months Ended April 30,
(Amounts in millions) 2020 2019
Cash flows from operating activities:
Consolidated net income $ 4,074
$ 3,906
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Depreciation and amortization 2,791
2,714
Unrealized (gains) and losses (783 ) (783 )
Deferred income taxes 84
124
Other operating activities (51 ) 75
Changes in certain assets and liabilities, net of effects of acquisitions and dispositions:
Receivables, net 924
970
Inventories 2,221
(421 )
Accounts payable (1,183 ) (1,854 )
Accrued liabilities (2,109 ) (1,514 )
Accrued income taxes 1,049
346
Net cash provided by operating activities 7,017
3,563

Cash flows from investing activities:
Payments for property and equipment (1,752 ) (2,205 )
Proceeds from the disposal of property and equipment 60
42
Proceeds from the disposal of certain operations —
833
Payments for business acquisitions, net of cash acquired (10 ) (56 )
Other investing activities 6
251
Net cash used in investing activities (1,696 ) (1,135 )

Cash flows from financing activities:
Net change in short-term borrowings 3,542
(399 )
Proceeds from issuance of long-term debt —
3,978
Repayments of long-term debt —
(364 )
Dividends paid (1,529 ) (1,520 )
Purchase of Company stock (723 ) (2,135 )
Dividends paid to noncontrolling interest —
(96 )
Other financing activities (725 ) (310 )
Net cash provided by (used in) financing activities 565
(846 )

Effect of exchange rates on cash, cash equivalents and restricted cash (415 ) (46 )

Net increase in cash, cash equivalents and restricted cash 5,471
1,536
Cash, cash equivalents and restricted cash at beginning of year 9,514
7,756
Cash, cash equivalents and restricted cash at end of period $ 14,985
$ 9,292


	Three Months Ended April 30,
(Amounts in millions)	2021		2020
Cash flows from operating activities:
Consolidated net income	$	2,811	$	4,074


Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Depreciation and amortization	2,661		2,791
Net unrealized and realized (gains) and losses	2,077		(783)
Losses on disposal of business operations	433		0
Deferred income taxes	(155)		84

Other operating activities	270		(51)
Changes in certain assets and liabilities, net of effects of acquisitions and dispositions:
Receivables, net	828		924
Inventories	(1,487)		2,221
Accounts payable	(1,004)		(1,183)
Accrued liabilities	(4,004)		(2,109)
Accrued income taxes	428		1,049
Net cash provided by operating activities	2,858		7,017

Cash flows from investing activities:
Payments for property and equipment	(2,214)		(1,752)
Proceeds from the disposal of property and equipment	72		60
Proceeds from disposal of certain operations, net of divested cash	7,935		0

Payments for business acquisitions, net of cash acquired	0		(10)
Other investing activities	57		6
Net cash provided by (used in) investing activities	5,850		(1,696)

Cash flows from financing activities:
Net change in short-term borrowings	138		3,542

Repayments of long-term debt	(510)		0

Dividends paid	(1,549)		(1,529)
Purchase of Company stock	(2,809)		(723)


Other financing activities	(669)		(725)
Net cash (used in) provided by financing activities	(5,399)		565

Effect of exchange rates on cash, cash equivalents and restricted cash	(51)		(415)

Net increase in cash, cash equivalents and restricted cash	3,258		5,471
Change in cash and cash equivalents classified as held for sale	1,848		0
Cash, cash equivalents and restricted cash at beginning of year	17,788		9,514
Cash, cash equivalents and restricted cash at end of period	$	22,894	$	14,985

See accompanying notes.

Table of Contents

Walmart Inc.

Notes to Condensed Consolidated Financial Statements

Note 1. Summary of Significant Accounting Policies

Basis of Presentation

The Condensed Consolidated Financial Statements of Walmart Inc. and its subsidiaries ("Walmart" or the "Company") and the accompanying notes included in this Quarterly Report on Form 10-Q are unaudited. In the opinion of management, all adjustments necessary for the fair presentation of the Condensed Consolidated Financial Statements have been included. Such adjustments are of a normal, recurring nature. The Condensed Consolidated Financial Statements, and the accompanying notes, are prepared in accordance with generally accepted accounting principles in the United States ("GAAP") and do not contain certain information included in the Company's Annual Report on Form 10-K for the fiscal year ended January 31, ~~2020~~2021 ("fiscal ~~2020"~~2021"). Therefore, the interim Condensed Consolidated Financial Statements should be read in conjunction with that Annual Report on Form 10-K.

The Company's Consolidated Financial Statements are based on a fiscal year ending January 31 for the United States ("U.S.") and Canadian operations. The Company consolidates all other operations generally using a one-month lag and based on a calendar year. There were no significant intervening events during the month of April related to the consolidated operations ~~consolidated~~ using a lag that materially affected the Condensed Consolidated Financial Statements.

The Company's business is seasonal to a certain extent due to calendar events and national and religious holidays, as well as weather patterns. Historically, the Company's highest sales volume and operating income have occurred in the fiscal quarter ending January 31.

Use of Estimates

The Condensed Consolidated Financial Statements have been prepared in conformity with GAAP. Those principles require management to make estimates and assumptions ~~including potential impacts arising from the COVID-19 pandemic and related government actions,~~ that affect the reported amounts of assets and liabilities. Management's estimates and assumptions also affect the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ materially from those estimates.

~~Receivables~~Investments

~~In June 2016,~~Investments in equity and debt securities are recorded in other long-term assets in the ~~Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2016-13,~~Condensed Consolidated Balance Sheets. Changes in fair value of equity securities measured on a recurring basis are recognized in other gains and losses in the Condensed Consolidated Statements of Income. Refer to ~~Financial Instruments–Credit Losses (Topic 326)~~Note 5~~, which modifies~~ for details. Equity investments without readily determinable fair values are carried at cost and are adjusted for any observable price changes or impairments within other gains and losses in the ~~measurement~~Condensed Consolidated Statements of ~~expected credit losses~~Income. Investments in debt securities classified as trading are reported at fair value with interest income recorded in interest income in the Condensed Consolidated Statements of Income. As of April 30, 2021, the Company had $1.0 billion in debt securities classified as trading.

Indemnification Liabilities

The Company has provided certain indemnifications in connection with its divestitures and has recorded indemnification liabilities equal to the estimated fair value of the obligations upon inception. As of April 30, 2021 and January 31, 2021, the Company had $1.3 billion and $0.6 billion, respectively, of certain ~~financial instruments. The Company adopted this ASU on February 1, 2020 with no material impact to~~legal and tax indemnification liabilities recorded within deferred income taxes and other in the ~~Company's~~ Condensed Consolidated ~~Financial Statements.~~Balance Sheets. The maximum amount of potential future payments under these indemnities was $4.2 billion, based on exchange rates as of April 30, 2021.

Receivables are stated at their carrying values, net of a reserve for credit losses, and are primarily due from the following: customers, which also includes insurance companies resulting from pharmacy sales, banks for customer credit, debit cards and electronic transfer transactions that take in excess of seven days to process; suppliers for marketing or incentive programs; governments for income taxes; and real estate transactions.

Table of Contents

Note 2. Net Income Per Common Share

Basic net income per common share attributable to Walmart is based on the weighted-average common shares outstanding during the relevant period. Diluted net income per common share attributable to Walmart is based on the weighted-average common shares outstanding during the relevant period adjusted for the dilutive effect of share-based awards. The Company did not have significant share-based awards outstanding that were anti-dilutive and not included in the calculation of diluted net income per common share attributable to Walmart for the three months ended April 30, ~~2020~~2021 and ~~2019.~~2020.

The following table provides a reconciliation of the numerators and denominators used to determine basic and diluted net income per common share attributable to Walmart:

Three Months Ended April 30,
(Amounts in millions, except per share data) 2020 2019
Numerator
Consolidated net income $ 4,074
$ 3,906
Consolidated net income attributable to noncontrolling interest (84 ) (64 )
Consolidated net income attributable to Walmart $ 3,990
$ 3,842

Denominator
Weighted-average common shares outstanding, basic 2,831
2,869
Dilutive impact of share-based awards 18
17
Weighted-average common shares outstanding, diluted 2,849
2,886

Net income per common share attributable to Walmart
Basic $ 1.41
$ 1.34
Diluted 1.40
1.33


	Three Months Ended April 30,
(Amounts in millions, except per share data)		2021		2020
Numerator
Consolidated net income		$	2,811	$	4,074
Consolidated net income attributable to noncontrolling interest		(81)		(84)
Consolidated net income attributable to Walmart		$	2,730	$	3,990

Denominator
Weighted-average common shares outstanding, basic		2,815		2,831
Dilutive impact of share-based awards		14		18
Weighted-average common shares outstanding, diluted		2,829		2,849

Net income per common share attributable to Walmart
Basic		$	0.97	$	1.41
Diluted		0.97		1.40

Note 3. Accumulated Other Comprehensive Loss

Amounts reclassified from accumulated other comprehensive loss for derivative instruments are generally recorded in interest, net, in the Company's Condensed Consolidated Statements of Income. Amounts for the minimum pension liability, as well as the cumulative translation and any related net investment hedge impacts resulting from a disposition of a business, are recorded in other gains and losses in the Company's Condensed Consolidated Statements of Income. The following table provides the changes in the composition of total accumulated other comprehensive loss for the three months ended April 30, ~~2020:~~

2021:

(Amounts in millions and net of immaterial income taxes) Currency
Translation and Other Net Investment Hedges Cash Flow Hedges Minimum
Pension
Liability Total
Balances as of February 1, 2020 $ (11,827 ) $ 1,517
$ (539 ) $ (1,956 ) $ (12,805 )
Other comprehensive income (loss) before reclassifications, net (3,256 ) 157
(295 ) (4 ) (3,398 )
Reclassifications to income, net —
—
16
19
35
Balances as of April 30, 2020 $ (15,083 ) $ 1,674
$ (818 ) $ (1,941 ) $ (16,168 )


(Amounts in millions and net of immaterial income taxes)	Currency Translation and Other		Net Investment Hedges		Cash Flow Hedges		Minimum Pension Liability		Total
Balances as of February 1, 2021	$	(10,772)	$	1,296	$	(304)	$	(1,986)	$	(11,766)

Other comprehensive loss before reclassifications, net	(225)		(7)		(26)		(1)		(259)
Reclassifications related to business dispositions, net(1)	3,258		(1,195)		30		1,966		4,059
Reclassifications to income, net	0		0		16		4		20
Balances as of April 30, 2021	$	(7,739)	$	94	$	(284)	$	(17)	$	(7,946)

(1) Upon closing of the sale of the Company's operations in the U.K. and Japan during the first quarter of fiscal 2022, these amounts were released from accumulated other comprehensive loss, the majority of which was considered in the impairment evaluation when the individual disposal groups met the held for sale classification in fiscal 2021.

The following table provides the changes in the composition of total accumulated other comprehensive loss for the three months ended April 30, ~~2019:~~2020:


(Amounts in millions and net of immaterial income taxes)	Currency Translation and Other		Net Investment Hedges		Cash Flow Hedges		Minimum Pension Liability		Total
Balances as of February 1, 2020	$	(11,827)	$	1,517	$	(539)	$	(1,956)	$	(12,805)
Other comprehensive income (loss) before reclassifications, net	(3,256)		157		(295)		(4)		(3,398)
Reclassifications to income, net	0		0		16		19		35
Balances as of April 30, 2020	$	(15,083)	$	1,674	$	(818)	$	(1,941)	$	(16,168)

(Amounts in millions and net of immaterial income taxes)
Currency
Translation and Other
Net Investment Hedges Cash Flow Hedges
Minimum
Pension
Liability
Total
Balances as of February 1, 2019 $ (12,085 ) $ 1,395
$ (140 ) $ (712 ) $ (11,542 )
Other comprehensive income (loss) before reclassifications, net 496
108
(145 ) (7 ) 452
Reclassifications to income, net (23 ) —
14
8
(1 )
Balances as of April 30, 2019 $ (11,612 ) $ 1,503
$ (271 ) $ (711 ) $ (11,091 )

Amounts reclassified from accumulated other comprehensive loss to net income for derivative instruments are recorded in interest, net, in the Company's Condensed Consolidated Statements of Income. Amounts reclassified from accumulated other comprehensive loss to net income for the minimum pension liability, as well as the cumulative translation resulting from the disposition of a business, are recorded in other gains and losses in the Company's Condensed Consolidated Statements of Income. Amounts related to the Company's derivatives expected to be reclassified from accumulated other comprehensive loss to net income during the next 12 months are not significant.

Table of Contents

Note 4. Short-term Borrowings and Long-term Debt

The Company has various committed lines of credit in the U.S. that are used to support its commercial paper program. In April ~~2020,~~2021, the Company renewed and extended its existing 364-day revolving credit facility of $10.0 billion as well as its five-year credit facility of $5.0 billion. In total, the Company had committed lines of credit in the U.S. of $15.0 billion at April 30, ~~2020~~2021 and January 31, ~~2020,~~2021, all undrawn.

The following table provides the changes in the Company's long-term debt for the three months ended April 30, ~~2020:~~

(Amounts in millions) Long-term debt due within one year Long-term debt Total
Balances as of February 1, 2020 $ 5,362

$ 43,714

$ 49,076
Proceeds from issuance of long-term debt —

—

—
Repayments of long-term debt —

—

—
Reclassifications of long-term debt 622

(622 )
—
Other (1 )
(86 )
(87 )
Balances as of April 30, 2020 $ 5,983

$ 43,006

$ 48,989

2021:


(Amounts in millions)	Long-term debt due within one year		Long-term debt		Total
Balances as of February 1, 2021	$	3,115	$	41,194	$	44,309

Repayments of long-term debt	(510)		0		(510)
Reclassifications of long-term debt	894		(894)		0
Other	1		(27)		(26)
Balances as of April 30, 2021	$	3,500	$	40,273	$	43,773

Note 5. Fair Value Measurements

Assets and liabilities recorded at fair value are measured using the fair value hierarchy, which prioritizes the inputs used in measuring fair value. The levels of the fair value hierarchy are:

•Level 1: observable inputs such as quoted prices in active markets;

•Level 2: inputs other than quoted prices in active markets that are either directly or indirectly observable; and

•Level 3: unobservable inputs for which little or no market data exists, therefore requiring the Company to develop its own assumptions.

~~The~~As described in Note 1, the Company measures the fair value of certain equity investments ~~(primarily its investment in JD.com)~~ on a recurring basis ~~and records them in other long-term assets~~ in the accompanying Condensed Consolidated Balance Sheets. The fair value of the Company's ~~investment in JD.com~~equity investments measured on a recurring basis is as follows:

(Amounts in millions) Fair Value as of April 30, 2020 Fair Value as of January 31, 2020
Investment in JD.com measured using Level 1 inputs $ 3,105
$ 2,715
Investment in JD.com measured using Level 2 inputs 3,115
2,723
Total $ 6,220
$ 5,438


(Amounts in millions)	Fair Value as of April 30, 2021		Fair Value as of January 31, 2021
Equity investments measured using Level 1 inputs	$	6,050	$	6,517
Equity investments measured using Level 2 inputs	6,217		7,905

Total	$	12,267	$	14,422

Derivatives

The Company also has derivatives recorded at fair value. Derivative fair values are the estimated amounts the Company would receive or pay upon termination of the related derivative agreements as of the reporting dates. The fair values have been measured using the income approach and Level 2 inputs, which include the relevant interest rate and foreign currency forward curves. As of April 30, ~~2020~~2021 and January 31, ~~2020,~~2021, the notional amounts and fair values of these derivatives were as follows:


	April 30, 2021					January 31, 2021
(Amounts in millions)	Notional Amount		Fair Value			Notional Amount		Fair Value
Receive fixed-rate, pay variable-rate interest rate swaps designated as fair value hedges	$	3,250	$	140	(1)	$	3,250	$	166	(1)
Receive fixed-rate, pay fixed-rate cross-currency swaps designated as net investment hedges	0		0			1,250		311		(1)
Receive fixed-rate, pay fixed-rate cross-currency swaps designated as cash flow hedges	8,324		(405)		(2)	5,073		(394)		(2)

Total	$	11,574	$	(265)		$	9,573	$	83

April 30, 2020 January 31, 2020
(Amounts in millions) Notional Amount Fair Value Notional Amount Fair Value
Receive fixed-rate, pay variable-rate interest rate swaps designated as fair value hedges $ 4,000
$ 201
⁽¹⁾
$ 4,000
$ 97
⁽¹⁾
Receive fixed-rate, pay fixed-rate cross-currency swaps designated as net investment hedges 3,750
593
⁽¹⁾
3,750
455
⁽¹⁾
Receive fixed-rate, pay fixed-rate cross-currency swaps designated as cash flow hedges 3,966
(1,155 )
⁽²⁾
4,067
(696 )
⁽²⁾
Total $ 11,716
$ (361 ) $ 11,817
$ (144 )

(1)Classified in other long-term assets within the Company's Condensed Consolidated Balance Sheets.


⁽¹⁾ (2)Classified primarily in deferred income taxes and other within the Company's Condensed Consolidated Balance Sheets.	~~Classified in Other long-term assets within the Company's Condensed Consolidated Balance Sheets.~~


⁽²⁾	~~Classified in Deferred income taxes and other within the Company's Condensed Consolidated Balance Sheets.~~

Nonrecurring Fair Value Measurements

In addition to assets and liabilities ~~that are~~ recorded at fair value on a recurring basis, the Company's assets and liabilities are also subject to nonrecurring fair value measurements. Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges.

Table of Contents

As of January 31, 2021, the Company's operations in the U.K. ("Asda") and operations in Japan ("Seiyu") met the held for sale criteria, and as a result the Company recorded non-recurring impairment charges in the fourth quarter of fiscal 2021 as the carrying value of the disposal groups exceeded their fair value, less costs to sell. Upon completing the sales of Asda in February 2021 and Seiyu in March 2021, the Company recorded incremental non-recurring impairment charges of $0.4 billion during the three months ended April 30, 2021 within other gains and losses in the Condensed Consolidated Statements of Income. Refer to Note 6. The Company did not have ~~any~~other material assets or liabilities ~~subject to~~resulting in nonrecurring fair value measurements as of April 30, ~~2020.~~2021.

Other Fair Value Disclosures

The Company records cash and cash equivalents, restricted cash, and short-term borrowings at cost. The carrying values of these instruments approximate their fair value due to their short-term maturities.

~~Table of Contents~~

The Company's long-term debt is also recorded at cost. The fair value is estimated using Level 2 inputs based on the Company's current incremental borrowing rate for similar types of borrowing arrangements. The carrying value and fair value of the Company's long-term debt as of April 30, ~~2020~~2021 and January 31, ~~2020,~~2021, are as follows:

April 30, 2020 January 31, 2020
(Amounts in millions) Carrying Value Fair Value Carrying Value Fair Value
Long-term debt, including amounts due within one year $ 48,989
$ 58,437
$ 49,076
$ 57,769


	April 30, 2021				January 31, 2021
(Amounts in millions)	Carrying Value		Fair Value		Carrying Value		Fair Value
Long-term debt, including amounts due within one year	$	43,773	$	51,822	$	44,309	$	54,240

Note 6. Divestitures

During fiscal 2022, the Company completed the following transactions related to the Company's Walmart International segment. After closing these transactions, total assets of the Walmart International segment were $86.4 billion as of April 30, 2021, as compared to $109.4 billion as of January 31, 2021.

Asda

In February 2021, the Company completed the divestiture of Asda, the Company's retail operations in the U.K., for net consideration of $9.6 billion. Upon closing of the transaction, the Company recorded an incremental pre-tax loss of $0.2 billion in other gains and losses in its Condensed Consolidated Statement of Income in the first quarter of fiscal 2022, primarily related to changes in the net assets of the disposal group, currency exchange rate fluctuations and customary purchase price adjustments upon closing. During the first quarter of fiscal 2022, the Company deconsolidated the financial statements of Asda and recognized its retained investment in Asda as a debt security within other long-term assets and also recognized certain legal and tax indemnity liabilities within deferred income taxes and other on the Condensed Consolidated Balance Sheet.

Seiyu

In March 2021, the Company completed the divestiture of Seiyu, the Company's retail operations in Japan, for net consideration of $1.2 billion. Upon closing of the transaction, the Company recorded an incremental pre-tax loss of $0.2 billion in other gains and losses in its Condensed Consolidated Statement of Income in the first quarter of fiscal 2022, primarily related to changes in the net assets of the disposal group, currency exchange rate fluctuations and customary purchase price adjustments upon closing. During the first quarter of fiscal 2022, the Company deconsolidated the financial statements of Seiyu and recognized its retained 15 percent ownership interest in Seiyu as an equity investment within other long-term assets on the Condensed Consolidated Balance Sheet.

Note 7. Contingencies

Legal Proceedings

The Company is involved in a number of legal proceedings. The Company has made accruals with respect to these matters, where appropriate, which are reflected in the Company's Condensed Consolidated Financial Statements. For some matters, a liability is not probable or the amount cannot be reasonably estimated and therefore an accrual has not been made. However, where a liability is reasonably possible and may be material, such matters have been disclosed. The Company may enter into discussions regarding settlement of these matters, and may enter into settlement agreements, if it believes settlement is in the best interest of the Company and its shareholders.

Unless stated otherwise, the matters discussed below, if decided adversely or settled by the Company, individually or in the aggregate, may result in a liability material to the Company's financial condition, results of operations or cash flows.

~~ASDA Equal Value Claims~~

Table of Contents

ASDA Stores Ltd. ("Asda"), a wholly-owned subsidiary of the Company, is a defendant in over 35,000 equal value ("Equal Value") claims that began in 2008 and are proceeding before an Employment Tribunal in Manchester (the "Employment Tribunal") in the United Kingdom ("UK") on behalf of current and former Asda store employees, and further claims may be asserted in the future. The claimants allege that the work performed by employees in Asda's retail stores is of equal value in terms of, among other things, the demands of their jobs compared to that of employees working in Asda's warehouse and distribution facilities, and that the difference in pay between these job positions disparately impacts women because more women work in retail stores while more men work in warehouses and distribution facilities, and that the pay difference is not objectively justified. The claimants are requesting differential back pay based on higher wage rates in the warehouse and distribution facilities and higher wage rates on a prospective basis.

In October 2016, following a preliminary hearing, the Employment Tribunal ruled that claimants could compare their positions in Asda's retail stores with those of employees in Asda's warehouse and distribution facilities. Asda appealed the ruling and the appeal is scheduled to be heard by the Supreme Court of the United Kingdom beginning on July 14, 2020.

Notwithstanding the appeal, claimants are proceeding in the next phase of their claims. That phase will determine whether the work performed by the claimants is of equal value to the work performed by employees in Asda's warehouse and distribution facilities.

At present, the Company cannot predict the number of such claims that may be filed, and cannot reasonably estimate any loss or range of loss that may arise from these proceedings. Accordingly, the Company can provide no assurance as to the scope and outcomes of these matters and no assurance as to whether its business, financial position, results of operations or cash flows will not be materially adversely affected. The Company believes it has substantial factual and legal defenses to these claims, and intends to defend the claims vigorously.Opioids Litigation

~~Prescription Opiate Litigation and Other Matters~~

In December 2017, the ~~U.S.~~United States Judicial Panel on Multidistrict Litigation consolidated numerous lawsuits filed against a wide array of defendants by various plaintiffs, including counties, cities, healthcare providers, Native American tribes, individuals, and third-party ~~payors,~~payers, asserting claims generally concerning the impacts of widespread opioid abuse. The consolidated multidistrict litigation is entitled In re National Prescription Opiate Litigation (MDL No. 2804), and is pending in the U.S. District Court for the Northern District of Ohio. The Company is named as a defendant in some of the cases included in this multidistrict litigation. Similar cases that name the Company have also been filed in state courts by state, local and tribal governments, health care providers and other plaintiffs. Plaintiffs are seeking compensatory and punitive damages, as well as injunctive relief including abatement. The Company cannot predict the number of such claims that may be filed, but believes it has substantial factual and legal defenses to these claims, and intends to defend the claims vigorously. The Company has also been responding to subpoenas, information requests and investigations from governmental entities related to nationwide controlled substance dispensing and distribution practices involving opioids. On October 22, 2020, the Company filed a declaratory judgment action in the U.S. District Court for the Eastern District of Texas against the U.S. Department of Justice (the “DOJ”) and the U.S. Drug Enforcement Administration, asking a federal court to clarify the roles and responsibilities of pharmacists and pharmacies as to the dispensing and distribution of opioids under the Controlled Substances Act (the “CSA”). The Company’s action was dismissed and the Company is appealing the decision. On December 22, 2020, the DOJ filed a civil complaint in the U.S. District Court for the District of Delaware alleging that the Company unlawfully dispensed controlled substances from its pharmacies and unlawfully distributed controlled substances to those pharmacies. The complaint alleges that this conduct resulted in violations of the CSA. The DOJ is seeking civil penalties and injunctive relief. The Company filed a motion to dismiss the DOJ complaint on February 22, 2021. The DOJ filed its opposition brief on April 23, 2021 and the Company filed its reply brief on May 24, 2021.

In addition, the Company is the subject of 2 securities class actions alleging violations of the federal securities laws regarding the Company’s disclosures with respect to opioids, filed in the U.S. District Court for the District of Delaware on January 20, 2021 and March 5, 2021 purportedly on behalf of a class of investors who acquired Walmart stock from March 30, 2016 through December 22, 2020. Those cases have been consolidated. Derivative actions were also filed by 2 of the Company's shareholders in the U.S. District Court for the District of Delaware on February 9, 2021 and April 16, 2021 alleging breach of fiduciary duties against certain of its current and former directors with respect to oversight of the Company’s distribution and dispensing of opioids and also alleging violations of the federal securities laws and other breaches of duty by current directors and two current officers in connection with the Company's opioids disclosures.

The Company cannot reasonably estimate any loss or range of loss that may arise from the various Opioids Litigation and intends to vigorously defend these litigation matters. Accordingly, the Company can provide no assurance as to the scope and outcome of these matters and no assurance as to whether its business, financial position, results of operations or cash flows will not be materially adversely affected.

Other Matters

11Asda Equal Value Claims

Prior to the divestiture of Asda, the Company, through its Asda subsidiary, was a defendant in certain equal value claims that began in 2008 and are proceeding before an Employment Tribunal in Manchester in the United Kingdom on behalf of current and former Asda store employees (the "Asda Equal Value Claims"), and further claims may be asserted in the future. Subsequent to the divestiture of Asda in February 2021, the Company will continue to conduct the defense of these claims. While potential liability for these claims remains with Asda, the Company has agreed to provide indemnification with respect to these claims up to a contractually determined amount. The Company cannot predict the number of such claims that may be filed, and cannot reasonably estimate any loss or range of loss that may arise related to these proceedings. Accordingly, the Company can provide no assurance as to the scope and outcomes of these matters.

~~Table of Contents~~

Note 7.8. Segments and Disaggregated Revenue

Segments

The Company is engaged in the operation of retail, wholesale, eCommerce websites and other units ~~as well as eCommerce websites,~~ located throughout the U.S., Africa, ~~Argentina,~~ Canada, Central America, Chile, China, India ~~Japan, Mexico,~~ and ~~the United Kingdom.~~Mexico. The Company's operations are conducted in 3 reportable segments: Walmart U.S., Walmart International and Sam's Club. The Company defines its segments as those operations whose results the chief operating decision maker ("CODM") regularly reviews to analyze performance and allocate resources. The Company sells similar individual products and services in each of its segments. It is impractical to segregate and identify revenues for each of these individual products and services.

Table of Contents

The Walmart U.S. segment includes the Company's mass merchandising concept in the U.S., as well as eCommerce and omni-channel initiatives. The Walmart International segment consists of the Company's operations outside of the U.S., as well as eCommerce and omni-channel initiatives. The Sam's Club segment includes the warehouse membership clubs in the U.S., as well as samsclub.com and omni-channel initiatives. Corporate and support consists of corporate overhead and other items not allocated to any of the Company's segments.

The Company measures the results of its segments using, among other measures, each segment's net sales and operating income, which includes certain corporate overhead allocations. From time to time, the Company revises the measurement of each segment's operating income and other measures, including any corporate overhead allocations, as determined by the information regularly reviewed by its CODM. When the measurement of a segment changes, previous period amounts and balances are reclassified to be comparable to the current period's presentation. Beginning with the first quarter in fiscal 2021, the Company revised its definition of eCommerce net sales to include certain pharmacy transactions and, accordingly, revised prior period amounts to maintain comparability.

Net sales by segment are as follows:

Three Months Ended April 30,
(Amounts in millions) 2020
2019
Net sales:
Walmart U.S. $ 88,743
$ 80,344
Walmart International 29,766
28,775
Sam's Club 15,163
13,830
Net sales $ 133,672
$ 122,949


	Three Months Ended April 30,
(Amounts in millions)	2021		2020
Net sales:
Walmart U.S.	$	93,167	$	88,743
Walmart International	27,300		29,766
Sam's Club	16,692		15,163
Net sales	$	137,159	$	133,672

Operating income by segment, as well as operating loss for corporate and support, interest, net and other gains and losses are as follows:

Three Months Ended April 30,
(Amounts in millions) 2020 2019
Operating income (loss):
Walmart U.S. $ 4,302
$ 4,142
Walmart International 806
738
Sam's Club 494
451
Corporate and support (378 ) (386 )
Operating income 5,224
4,945
Interest, net 549
625
Other (gains) and losses (721 ) (837 )
Income before income taxes $ 5,396
$ 5,157

~~Table of Contents~~


	Three Months Ended April 30,
(Amounts in millions)	2021		2020
Operating income (loss):
Walmart U.S.	$	5,455	$	4,302
Walmart International	1,194		806
Sam's Club	575		494
Corporate and support	(315)		(378)
Operating income	6,909		5,224
Interest, net	536		549

Other (gains) and losses	2,529		(721)
Income before income taxes	$	3,844	$	5,396

Disaggregated Revenues

In the following tables, segment net sales are disaggregated by either merchandise category or by market. From time to time, the Company revises the assignment of net sales of a particular item to a merchandise category. When the assignment changes, previous period amounts are reclassified to be comparable to the current period's presentation.

In addition, net sales related to eCommerce are provided for each segment, which include omni-channel sales, where a customer initiates an order digitally and the order is fulfilled through a store or club.

(Amounts in millions) Three Months Ended April 30,
Walmart U.S. net sales by merchandise category 2020 2019
Grocery $ 52,835
$ 46,153
General merchandise 25,476
24,406
Health and wellness 9,665
8,970
Other categories 767
815
Total $ 88,743
$ 80,344


(Amounts in millions)	Three Months Ended April 30,
Walmart U.S. net sales by merchandise category	2021		2020
Grocery	$	51,391	$	52,921
General merchandise	30,607		25,466
Health and wellness	9,970		9,600
Other categories	1,199		756
Total	$	93,167	$	88,743

Of Walmart U.S.'s total net sales, approximately ~~$8.3~~$11.3 billion and ~~$4.7~~$8.3 billion related to eCommerce for the three months ended April 30, 2021 and 2020, ~~and 2019,~~ respectively.

Table of Contents

(Amounts in millions) Three Months Ended April 30,
Walmart International net sales by market 2020 2019
Mexico and Central America $ 8,496
$ 7,837
United Kingdom 7,132
7,077
Canada 4,286
4,122
China 3,368
3,063
Other 6,484
6,676
Total $ 29,766
$ 28,775


(Amounts in millions)	Three Months Ended April 30,
Walmart International net sales by market	2021		2020
Mexico and Central America	$	8,330	$	8,496
United Kingdom	3,811		7,132
Canada	4,848		4,286
China	3,773		3,368
Other	6,538		6,484
Total	$	27,300	$	29,766

Of Walmart International's total net sales, approximately ~~$2.9~~$4.3 billion and ~~$2.5~~$2.9 billion related to eCommerce for the three months ended April 30, ~~2020~~2021 and ~~2019,~~2020, respectively.

(Amounts in millions) Three Months Ended April 30,
Sam’s Club net sales by merchandise category 2020 2019
Grocery and consumables $ 10,427
$ 8,373
Fuel, tobacco and other categories 2,100
2,777
Home and apparel 1,074
1,178
Health and wellness 901
827
Technology, office and entertainment 661
675
Total $ 15,163
$ 13,830


(Amounts in millions)	Three Months Ended April 30,
Sam’s Club net sales by merchandise category	2021		2020
Grocery and consumables	$	10,669	$	10,361
Fuel, tobacco and other categories	2,299		2,013
Home and apparel	2,082		1,280
Health and wellness	941		901
Technology, office and entertainment	701		608
Total	$	16,692	$	15,163

Of Sam's Club's total net sales, approximately ~~$1.0~~$1.5 billion and ~~$0.7~~$1.0 billion related to eCommerce for the three months ended April 30, ~~2020~~2021 and ~~2019,~~2020, respectively.

Table of Contents

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Overview

This discussion, which presents Walmart Inc.'s ("Walmart," the "Company," "our," or "we") results for periods occurring in the fiscal year ending January 31, ~~2021~~2022 ("fiscal ~~2021"~~2022") and the fiscal year ended January 31, ~~2020~~2021 ("fiscal ~~2020"~~2021"), should be read in conjunction with our Condensed Consolidated Financial Statements as of and for the three months ended April 30, ~~2020,~~2021, and the accompanying notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as our Consolidated Financial Statements as of and for the year ended January 31, ~~2020,~~2021, the accompanying notes and the related Management's Discussion and Analysis of Financial Condition and Results of Operations, contained in our Annual Report on Form 10-K for the year ended January 31, ~~2020.~~2021.

We intend for this discussion to provide the reader with information that will assist in understanding our financial statements, the changes in certain key items in those financial statements from period to period and the primary factors that accounted for those changes. We also discuss certain performance metrics that management uses to assess the Company's performance. Additionally, the discussion provides information about the financial results of each of the three segments of our business to provide a better understanding of how each of those segments and its results of operations affect the financial condition and results of operations of the Company as a whole.

Throughout this Management's Discussion and Analysis of Financial Condition and Results of Operations, we discuss segment operating income, comparable store and club sales and other measures. Management measures the results of the Company's segments using each segment's operating income, including certain corporate overhead allocations, as well as other measures. From time to time, we revise the measurement of each segment's operating income and other measures as determined by the information regularly reviewed by our chief operating decision maker.

Comparable store and club sales, or comparable sales, is a metric that indicates the performance of our existing stores and clubs by measuring the change in sales for such stores and clubs, including eCommerce sales, for a particular period from the corresponding prior year period. Walmart's definition of comparable sales includes sales from stores and clubs open for the previous 12 months, including remodels, relocations, expansions and conversions, as well as eCommerce sales. We measure the eCommerce sales impact by including all sales initiated digitally, ~~and those initiated through mobile applications,~~ including omni-channel transactions which are fulfilled through our stores and clubs. Sales at a store that has changed in format are excluded from comparable sales when the conversion of that store is accompanied by a relocation or expansion that results in a change in the store's retail square feet of more than five percent. ~~Additionally,~~Sales related to divested businesses are excluded from comparable sales, and sales related to acquisitions are excluded until such acquisitions have been owned for 12 months. Comparable sales are also referred to as "same-store" sales by others within the retail industry. The method of calculating comparable sales varies across the retail industry. As a result, our calculation of comparable sales is not necessarily comparable to similarly titled measures reported by other companies.

In discussing our operating results, the term currency exchange rates refers to the currency exchange rates we use to convert the operating results for countries where the functional currency is not the U.S. dollar into U.S. ~~dollars or for countries experiencing hyperinflation.~~dollars. We calculate the effect of changes in currency exchange rates as the difference between current period activity translated using the current period’s currency exchange rates and the comparable prior year period’s currency exchange rates. Additionally, no currency exchange rate fluctuations are calculated for non-USD acquisitions until owned for 12 months. Throughout our discussion, we refer to the results of this calculation as the impact of currency exchange rate fluctuations. Volatility in currency exchange rates may impact the results, including net sales and operating income, of the Company and the Walmart International segment in the future.

Each of our segments contributes to the Company's operating results differently. Each, however, has generally maintained a consistent contribution rate to the Company's net sales and operating income in recent years other than minor changes to the contribution rate for the Walmart International segment due to fluctuations in currency exchange rates. Consistent with our strategy to strengthen our Walmart International portfolio for the long-term, we completed the following actions during the three months ended April 30, 2021:

•Completed the sale of Asda, our retail business in the U.K., for net consideration of $9.6 billion in February 2021. During the three months ended April 30, 2021, we recognized an incremental non-cash loss of $0.2 billion, after tax, primarily due to changes in the net assets of the disposal group, currency exchange rate fluctuations and customary purchase price adjustments upon closing.

•Completed the sale of Seiyu, our retail business in Japan, for net consideration of $1.2 billion in March 2021. During the three months ended April 30, 2021, we recognized an incremental non-cash loss of $0.2 billion, after tax, primarily due to changes in the net assets of the disposal group, currency exchange rate fluctuations and customary purchase price adjustments upon closing.

Table of Contents

We operate in the highly competitive omni-channel retail industry in all of the markets we serve. We face strong sales competition from other discount, department, drug, dollar, variety and specialty stores, warehouse clubs and supermarkets, as well as eCommerce businesses. Many of these competitors are national, regional or international chains or have a national or international omni-channel or eCommerce presence. We compete with a number of companies for attracting and retaining quality employees ("associates"). We, along with other retail companies, are influenced by a number of factors including, but not limited to: catastrophic events, ~~and~~weather, global health epidemics including the ~~recent~~ongoing COVID-19 pandemic, ~~weather,~~ competitive pressures, consumer disposable income, consumer debt levels and buying patterns, consumer credit availability, cost of goods, currency exchange rate fluctuations, customer preferences, deflation, inflation, fuel and energy prices, general economic conditions, insurance costs, interest rates, labor costs, tax rates, the imposition of tariffs, cybersecurity attacks and unemployment. Further information on the factors that can affect our operating results and on certain risks to our Company and an investment in our securities can be found herein under "Item 5. Other Information."

~~Table of Contents~~

~~COVID-19 Updates~~

Our strategy is to make every day easier for busy families, operate with discipline, sharpen our culture, become more digital, and make trust a competitive advantage. These areas of focus are fundamental in running our business every day, and even more so now as Walmart plays an important role during the current COVID-19 pandemic.

~~Supporting our associates.~~We remain focused on our strategy while also prioritizing the physical safety, financial health and emotional well-being of our associates. In the U.S., we provided extra pay and benefits, including the payment of a special cash bonus to hourly associates in the first quarter of fiscal 2021 and the introduction of a COVID-19 Emergency Leave Policy. In May 2020, we announced a second special cash bonus to be paid in the second quarter of fiscal 2021. We have also done similar things in some of our international markets to support and reward associates.

~~Serving our customers.~~From an operational standpoint, we reduced store hours to allow for additional cleaning and sanitizing, posted social-distancing decals, implemented protocols for temperature checks, began metering the number of customers in a store or club at any one time, and installed sneeze guards at pharmacies and checkouts. Stores, clubs, and facilities received masks and gloves, and associates are required to wear face coverings to protect both our associates and our customers. We hired more than 300,000 associates through May 2020 in the U.S., many of whom are temporary.

~~Helping others.~~We increased our giving to community organizations as well as continuing food donations from our stores and distribution centers. We supported tenants in various markets by waiving or discounting rent for in-store tenants during April 2020, which continued through May 2020. We have also made financial support available to our suppliers.

~~Managing the business and driving our long-term strategy.~~As we take care of associates, customers and communities, we continue to manage the business and drive our long-term strategy. We are maintaining our everyday low-price discipline and our omni-channel offering continues to resonate with customers around the world who are increasingly seeking convenience.

The COVID-19 pandemic resulted in broad challenges globally in the first quarter of fiscal 2021, including new and varying government regulations, stretching our supply chain, and introducing significant sales volatility as well as channel and mix shifts due to changing consumer habits. Unprecedented demand led to strong growth in net sales, but lower gross margin rates and higher operating expenses during the quarter. For a detailed discussion on results of operations by reportable segment, refer to "~~Results of Operations" below.~~

We expect continued uncertainty in our business and the global economy due to the duration and intensity of the COVID–19 pandemic; the ~~length~~duration and ~~impact of stay–at–home orders; the scale and duration~~extent of economic stimulus; timing and effectiveness of global vaccines; and volatility in employment trends and consumer confidence which ~~will~~may impact our results. For a detailed discussion on results ~~in the short term.~~of operations by reportable segment, refer to "Results of Operations" below.

In the current environment, we believe cash flows from operations, our current cash position and access to capital markets will continue to be sufficient to meet our anticipated operating cash needs, which include funding seasonal buildups in merchandise inventories and funding our capital expenditures, acquisitions, dividend payments and share repurchases. See "Liquidity and Capital Resources" for additional information.

Company Performance Metrics

We are committed to helping customers save money and live better through everyday low prices, supported by everyday low costs. At times, we adjust our business strategies to maintain and strengthen our competitive positions in the countries in which we operate. We define our financial framework as:

•strong, efficient growth;

•consistent operating discipline; and

•strategic capital allocation.

As we execute on this financial framework, we believe our returns on capital will improve over time.

The COVID-19 pandemic affected our business resulting in sales volatility within the first quarter and overall net sales growth. As our Company continues to respond to the COVID-19 pandemic, we have prioritized our focus on associate care, including extra pay and benefits as well as masks and gloves; increased cleaning and sanitation measures; customer safety; and new associate hiring. Additionally, we've delayed certain consulting projects and reduced marketing and travel in response to the COVID-19 pandemic.

~~Table of Contents~~

Strong, Efficient Growth

Our objective of prioritizing strong, efficient growth means we will focus on the most productive growth opportunities, increasing comparable store and club sales, accelerating eCommerce sales growth and expansion of omni-channel initiatives while slowing the rate of growth of new stores and clubs. At times, we make strategic investments which are focused on the long-term growth of the Company.

Comparable sales is a metric that indicates the performance of our existing stores and clubs by measuring the change in sales for such stores and clubs, including eCommerce sales, for a particular period over the corresponding period in the previous year. The retail industry generally reports comparable sales using the retail calendar (also known as the 4-5-4 calendar). To be consistent with the retail industry, we provide comparable sales using the retail calendar in our quarterly earnings releases. However, when we discuss our comparable sales below, we are referring to our calendar comparable sales calculated using our fiscal ~~calendar. As our fiscal~~ calendar, ~~differs from~~which may result in differences when compared to comparable sales using the retail ~~calendar, our fiscal calendar comparable sales also differ from the retail calendar comparable sales provided in our quarterly earnings releases.~~ calendar.

Calendar comparable sales, as well as the impact of fuel, for the three months ended April 30, ~~2020~~2021 and ~~2019,~~2020, were as follows:


	Three Months Ended April 30,									Three Months Ended April 30,
	2020		2019		2020		2019			2021		2020		2021		2020
	With Fuel				Fuel Impact					With Fuel				Fuel Impact
Walmart U.S.	10.6	%	3.3	%	(0.2	)%	—	%	Walmart U.S.	5.3	%	10.6	%	0.2	%	(0.2)	%
Sam's Club	9.6	%	1.4	%	(3.4	)%	0.9	%	Sam's Club	10.1	%	9.6	%	3.9	%	(3.4)	%
Total U.S.	10.5	%	3.0	%	(0.6	)%	0.1	%	Total U.S.	6.0	%	10.5	%	0.8	%	(0.6)	%

Comparable sales in the U.S., including fuel, increased ~~10.5%~~6.0% for the three months ended April 30, ~~2020~~2021 when compared to the same period in the previous fiscal year. The Walmart U.S. segment had comparable sales growth of ~~10.6%~~5.3% for the three months ended April 30, ~~2020~~2021 driven by growth in average ticket, primarily ~~resulting from unprecedented demand due~~aided by consumer stimulus spending. Customers continued to consolidate shopping trips and purchase larger baskets which contributed to average ticket growth while transactions decreased overall for the ~~COVID-19 pandemic, partially offset by a decline~~quarter, turning positive in ~~transactions as customers consolidated shopping trips. With the shift in purchasing behavior,~~April 2021. The Walmart U.S. segment's eCommerce sales positively contributed approximately ~~4.0%~~3.5% to comparable sales for the three months ended April 30, ~~2020~~2021 and was primarily driven ~~from online grocery~~by store pickup and delivery and walmart.com.

Comparable sales at the Sam's Club segment ~~were 9.6%~~increased 10.1% for the three months ended April 30, ~~2020.~~2021. The Sam's Club segment's comparable sales benefited from growth in transactions ~~resulting from the COVID-19 pandemic,~~and average ticket, which was aided by stimulus spending, partially offset by our decision to remove tobacco from certain club ~~locations and lower fuel sales.~~locations. The Sam's Club segment's eCommerce sales positively contributed approximately ~~1.7%~~2.8% to comparable sales for the three months ended April 30, ~~2020.~~2021.

Table of Contents

Consistent Operating Discipline

We operate with discipline by managing expenses and optimizing the efficiency of how we work and creating an environment in which we have sustainable lowest cost to serve. We invest in technology and process improvements to increase productivity, manage inventory and reduce costs. We measure operating discipline through expense leverage, which we define as net sales growing at a faster rate than operating, selling, general and administrative ("operating") expenses.


	Three Months Ended April 30,
(Amounts in millions)		2021			2020
Net sales		$	137,159		$	133,672
Percentage change from comparable period		2.6		%	8.7		%
Operating, selling, general and administrative expenses		$	28,129		$	27,372
Percentage change from comparable period		2.8		%	5.5		%
Operating, selling, general and administrative expenses as a percentage of net sales		20.5		%	20.5		%

Three Months Ended April 30,
(Amounts in millions) 2020 2019
Net sales $ 133,672
$ 122,949
Percentage change from comparable period 8.7 % 1.1 %
Operating, selling, general and administrative expenses $ 27,372
$ 25,946
Percentage change from comparable period 5.5 % 0.5 %
Operating, selling, general and administrative expenses as a percentage of net sales 20.5 % 21.1 %

~~For~~Despite the ~~three months ended April 30, 2020 we leveraged operating expenses, decreasing~~growth in net sales, operating expenses as a percentage of net sales ~~by 62 basis points~~for the three months ended April 30, 2021 was relatively flat when compared to the same period in the previous fiscal ~~year, respectively. The primary driver of~~year. Increased wage and technology investments in the ~~expense leverage for the three months ended April 30, 2020 was due to our growth in comparable store sales driven by unprecedented demand resulting from the COVID-19 pandemic, which was partially~~Walmart U.S. segment were offset by ~~approximately $0.9~~$0.5 billion of lower incremental ~~expenses~~COVID-19 related costs, as well as a benefit from depreciation and amortization expense not recorded subsequent to ~~focus on associate care~~the held for sale classification of our operations in the U.K. and ~~customer safety during the COVID-19 pandemic which included bonuses, additional cleaning and supplies, emergency leave pay and other similar charges.~~Japan in fiscal 2021.

~~Table of Contents~~

Strategic Capital Allocation

Our strategy includes improving our customer-facing initiatives in stores and clubs and creating a seamless omni-channel experience for our customers. ~~In recent years,~~As such, we ~~have allocated~~are allocating more capital to ~~eCommerce, technology,~~ supply chain, customer-facing initiatives, technology and store remodels, and less to new store and club openings. We will continue to remain disciplined with our capital spending in light of the COVID-19 pandemic. Total capital expenditures for three months ended April 30, 2020 decreased compared to the prior year; theThe following table provides additional detail:


(Amounts in millions)	Three Months Ended April 30,				(Amounts in millions)	Three Months Ended April 30,
Allocation of Capital Expenditures	2020		2019		Allocation of Capital Expenditures		2021		2020
eCommerce, technology, supply chain and other	$	823	$	1,003
Supply chain, customer-facing initiatives and technology					Supply chain, customer-facing initiatives and technology		$	1,013	$	823
Store remodels	438		595		Store remodels		613		438
New stores and clubs, including expansions and relocations	23		23		New stores and clubs, including expansions and relocations		38		23
Total U.S.	1,284		1,621		Total U.S.		1,664		1,284
Walmart International	468		584		Walmart International		550		468
Total capital expenditures	$	1,752	$	2,205
Total Capital Expenditures					Total Capital Expenditures		$	2,214	$	1,752

Returns

As we execute our financial framework, we believe our return on capital will improve over time. We measure return on capital with our return on investment and free cash flow metrics. In addition, we provide returns in the form of share repurchases and dividends, which are discussed in the Liquidity and Capital Resources section.

Return on Assets and Return on Investment

We include Return on Assets ("ROA"), the most directly comparable measure based on our financial statements presented in accordance with generally accepted accounting principles in the U.S. ("GAAP"), and Return on Investment ("ROI") as metrics to assess returns on assets. While ROI is considered a non-GAAP financial measure, management believes ROI is a meaningful metric to share with investors because it helps investors assess how effectively Walmart is deploying its assets. Trends in ROI can fluctuate over time as management balances long-term strategic initiatives with possible short-term impacts. ROA was ~~6.6%~~5.3% and ~~4.0%~~6.6% for the trailing twelve months ended April 30, 2021 and 2020, ~~and 2019,~~ respectively. The ~~increase~~decrease in ROA was primarily due to the ~~increase~~losses on divestiture of our operations in ~~consolidated net income as a result of lapping~~ the ~~$4.5 billion net loss in fiscal 2019 related to the sale of the majority stake in Walmart Brazil~~U.K., Japan and ~~the change in fair value of the investment in JD.com,~~Argentina, partially offset by the ~~dilution to~~increase in operating income ~~related to Flipkart and business restructuring charges recorded~~as well as the fair value change in ~~fiscal 2020.~~our equity investments. ROI was ~~13.4%~~14.4% and ~~14.5%~~13.4% for the trailing twelve months ended April 30, ~~2020~~2021 and ~~2019, respectively.~~ 2020. The ~~decrease~~increase in ROI was primarily due to the ~~decrease~~increase in operating ~~income as a result of the dilution from Flipkart and business restructuring charges recorded in fiscal 2020, as well as the increase in average total assets due to the acquisition of Flipkart~~.income.

We define ROI as adjusted operating income (operating income plus interest income, depreciation and amortization, and rent expense) for the trailing 12 months divided by average invested capital during that period. We consider average invested capital to be the average of our beginning and ending total assets, plus average accumulated depreciation and ~~average~~ amortization, less average accounts payable and average accrued liabilities for that period. For the trailing twelve months ended April 30, 2019, lease related assets and associated accumulated amortization are included in the denominator at their carrying amount as of that balance sheet date, rather than averaged, because they are not directly comparable to the prior year calculation which included rent for the trailing 12 months multiplied by a factor of 8. A two-point average was used for leased assets beginning in fiscal 2021, after one full year from the date of adoption of the new lease standard.

Our calculation of ROI is considered a non-GAAP financial measure because we calculate ROI using financial measures that exclude and include amounts that are included and excluded in the most directly comparable GAAP financial measure. For example, we exclude the impact of depreciation and amortization from our reported operating income in calculating the numerator of our calculation of ROI. As mentioned above, we consider ROA to be the financial measure computed in accordance with generally accepted accounting principles most directly comparable to our calculation of ROI. ROI differs from ROA (which is consolidated net income for the period divided by average total assets for the period) because ROI: adjusts

Table of Contents

operating income to exclude certain expense items and adds interest income; adjusts total assets for the impact of accumulated depreciation and amortization, accounts payable and accrued liabilities to arrive at total invested capital. Because of the adjustments mentioned above, we believe ROI more accurately measures how we are deploying our key assets and is more meaningful to investors than ROA. Although ROI is a standard financial measure, numerous methods exist for calculating a company's ROI. As a result, the method used by management to calculate our ROI may differ from the methods used by other companies to calculate their ~~ROI~~ROI.

~~Table of Contents~~

The calculation of ROA and ROI, along with a reconciliation of ROI to the calculation of ROA, the most comparable GAAP financial measure, is as follows:


		For the Trailing Twelve Months Ending April 30,							For the Trailing Twelve Months Ending April 30,
(Amounts in millions)		2020			2019			(Amounts in millions)	2021			2020
CALCULATION OF RETURN ON ASSETS	CALCULATION OF RETURN ON ASSETS							CALCULATION OF RETURN ON ASSETS
Numerator								Numerator
Consolidated net income		$	15,369		$	8,809		Consolidated net income	$	12,443		$	15,369
Denominator								Denominator
Average total assets⁽¹⁾		$	233,718		$	219,736		Average total assets(1)	$	234,737		$	233,718
Return on assets (ROA)		6.6		%	4.0		%	Return on assets (ROA)	5.3		%	6.6		%

CALCULATION OF RETURN ON INVESTMENT	CALCULATION OF RETURN ON INVESTMENT							CALCULATION OF RETURN ON INVESTMENT
Numerator								Numerator
Operating income		$	20,847		$	21,748		Operating income	$	24,233		$	20,847
+ Interest income		184			222			+ Interest income	108			184
+ Depreciation and amortization		11,062			10,714			+ Depreciation and amortization	11,022			11,062
+ Rent		2,694			2,866			+ Rent	2,534			2,694
= Adjusted operating income		$	34,787		$	35,550
= ROI operating income								= ROI operating income	$	37,897		$	34,787

Denominator								Denominator
Average total assets^(1),(2)		$	233,718		$	226,465
+ Average accumulated depreciation and amortization^{(1), (2)}		90,970			84,960
- Average accounts payable⁽¹⁾		44,603			44,861
Average total assets(1)								Average total assets(1)	$	234,737		$	233,718
'+ Average accumulated depreciation and amortization(1)								'+ Average accumulated depreciation and amortization(1)	95,424			90,970
'- Average accounts payable(1)								'- Average accounts payable(1)	46,124			44,603
- Average accrued liabilities⁽¹⁾		20,700			20,903			- Average accrued liabilities(1)	20,874			20,700
= Average invested capital		$	259,385		$	245,661		= Average invested capital	$	263,163		$	259,385
Return on investment (ROI)		13.4		%	14.5		%	Return on investment (ROI)	14.4		%	13.4		%

As of April 30,
2020 2019 2018
Certain Balance Sheet Data
Total assets $ 232,892
$ 234,544
$ 204,927
Leased assets, net NP
20,637
NP
Total assets without leased assets, net NP
213,907
NP
Accumulated depreciation and amortization 94,514
87,426
84,964
Accumulated amortization on leased assets NP
3,085
NP
Accumulated depreciation and amortization, without leased assets NP
84,341
NP
Accounts payable 44,096
45,110
44,612
Accrued liabilities 20,377
21,023
20,782

(1) The average is based on the addition of the account balance at the end of the current period to the account balance at the end of the ~~corresponding~~ prior period and dividing by 2. ~~Average total assets as used in ROA includes the average impact of the adoption of ASU 2016-02,~~


	As of April 30,
	2021		2020		2019
Certain Balance Sheet Data
Total assets	$	236,581	$	232,892	$	234,544
Accumulated depreciation and amortization	96,334		94,514		87,426
Accounts payable	48,151		44,096		45,110
Accrued liabilities	21,371		20,377		21,023

~~Leases (Topic 842)~~.

~~(2)~~ For the twelve months ended April 30, 2019, as a result of adopting ASU 2016-02, average total assets is based on the average of total assets without leased assets, net plus leased assets, net as of April 30, 2019. Average accumulated depreciation and amortization is based on the average of accumulated depreciation and amortization, without leased assets plus accumulated amortization on leased assets as of April 30, 2019.

~~NP = Not provided~~

Table of Contents

Free Cash Flow

Free cash flow is considered a non-GAAP financial measure. Management believes, however, that free cash flow, which measures our ability to generate cash from our business operations, is an important financial measure for use in evaluating the Company's financial performance. Free cash flow should be considered in addition to, rather than as a substitute for, consolidated net income as a measure of our performance and net cash provided by operating activities as a measure of our liquidity. See Liquidity and Capital Resources for discussions of GAAP metrics including net cash provided by operating activities, net cash used in investing activities and net cash used in financing activities.

We define free cash flow as net cash provided by operating activities in a period minus payments for property and equipment made in that period. We had net cash provided by operating activities of $2.9 billion for the three months ended April 30, 2021, which decreased when compared to $7.0 billion for the three months ended April 30, 2020 ~~which increased when compared~~primarily due to ~~$3.6~~an increase in inventory purchases due in part to lapping the impact of accelerated inventory sell-through in the first quarter of fiscal 2021. We generated free cash flow of $0.6 billion for the three months ended April 30, ~~2019~~ ~~due~~2021, which decreased when compared to ~~the accelerated timing of inventory sell-through in the current period primarily related to the impacts of COVID-19, as well as the timing of vendor and other payments.~~ ~~We generated free cash flow of~~ $5.3 billion for the three months ended April 30, 2020 ~~which increased when~~ ~~compared to $1.4 billion for the three months ended April 30, 2019~~ due to the same reasons as the ~~increase~~decrease in net cash provided by operating activities, as well as $0.5 billion in ~~decreased~~increased capital ~~expenditures~~. expenditures.

Walmart's definition of free cash flow is limited in that it does not represent residual cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations or payments made for business acquisitions. Therefore, we believe it is important to view free cash flow as a measure that provides supplemental information to our Condensed Consolidated Statements of Cash Flows.

Although other companies report their free cash flow, numerous methods may exist for calculating a company's free cash flow. As a result, the method used by management to calculate our free cash flow may differ from the methods used by other companies to calculate their free cash flow.

The following table sets forth a reconciliation of free cash flow, a non-GAAP financial measure, to net cash provided by operating activities, which we believe to be the GAAP financial measure most directly comparable to free cash flow, as well as information regarding net cash used in investing activities and net cash used in financing activities.


	Three Months Ended April 30,
(Amounts in millions)		2021		2020
Net cash provided by operating activities		$	2,858	$	7,017
Payments for property and equipment		(2,214)		(1,752)
Free cash flow		$	644	$	5,265

Net cash provided by (used in) investing activities(1)		$	5,850	$	(1,696)
Net cash (used in) provided by financing activities		(5,399)		565

Three Months Ended April 30,
(Amounts in millions) 2020 2019
Net cash provided by operating activities $ 7,017
$ 3,563
Payments for property and equipment (1,752 ) (2,205 )
Free cash flow $ 5,265
$ 1,358

Net cash used in investing activities⁽¹⁾
$ (1,696 ) $ (1,135 )
Net cash provided by (used in) financing activities 565
(846 )

(1) "Net cash ~~used in~~provided by (used in) investing activities" includes payments for property and equipment, which is also included in our computation of free cash flow.

Table of Contents

Results of Operations

Consolidated Results of Operations


	Three Months Ended April 30,							Three Months Ended April 30,
(Amounts in millions, except unit counts)	2020			2019			(Amounts in millions, except unit counts)		2021			2020
Total revenues	$	134,622		$	123,925		Total revenues		$	138,310		$	134,622
Percentage change from comparable period	8.6		%	1.0		%	Percentage change from comparable period		2.7		%	8.6%
Net sales	$	133,672		$	122,949		Net sales		$	137,159		$	133,672
Percentage change from comparable period	8.7		%	1.1		%	Percentage change from comparable period		2.6		%	8.7%
Total U.S. calendar comparable sales increase	10.5		%	3.0		%	Total U.S. calendar comparable sales increase		6.0		%	10.5%
Gross profit margin as a percentage of net sales	23.7		%	24.3		%	Gross profit margin as a percentage of net sales		24.7		%	23.7%
Operating income	$	5,224		$	4,945		Operating income		$	6,909		$	5,224
Operating income as a percentage of net sales	3.9		%	4.0		%	Operating income as a percentage of net sales		5.0		%	3.9%
Other (gains) and losses	$	(721	)	$	(837	)	Other (gains) and losses		$	2,529		$	(721)
Consolidated net income	$	4,074		$	3,906		Consolidated net income		$	2,811		$	4,074
Unit counts at period end	11,484			11,368			Unit counts at period end		10,526			11,484
Retail square feet at period end	1,128			1,128			Retail square feet at period end		1,065			1,128

Our total revenues, which are mostly comprised of net sales, but also include membership and other income, increased ~~$10.7~~$3.7 billion or ~~8.6%~~2.7% for the three months ended April 30, ~~2020,~~2021, when compared to the same period in the previous fiscal year. ~~The increase~~These increases in revenue ~~was due to an increase in net sales, which~~ were primarily due to strong positive comparable sales for the Walmart U.S. and Sam's Club segments ~~resulting~~which benefited from ~~unprecedented demand due to~~consumer stimulus dollars in the ~~COVID-19 pandemic,~~U.S., along with positive comparable sales in ~~the majority~~several of our International markets, despite operating limitations in some markets due to government regulations and precautionary measures taken as a result of the COVID-19 pandemic. Net sales were also positively affected by an extra day in February 2020 due to a leap year which increased net sales by approximately 1%.remaining international markets. These increases were partially offset by a ~~$1.3~~$4.2 billion ~~negative~~decrease in net sales primarily related to the divestiture of our operations in the U.K. and Japan, which closed in February 2021 and March 2021, respectively. Net sales also benefited from a $0.9 billion positive impact of fluctuations in currency exchange rates for the three months ended April 30, ~~2020.~~2021.

As the COVID-19 pandemic spread to the U.S in late February, we saw the mix of sales shift heavily toward food and consumables as consumers initiated stock-up trips. As the first quarter of fiscal 2021 progressed, we started to see pockets of strength in several general merchandise categories as consumers adapted to spending more time at home. Toward the end of the first quarter of fiscal 2021, sales increased in several general merchandise categories, such as apparel, electronics, sporting goods, and toys, which were heavily influenced by stimulus dollars in the U.S. in April. eCommerce sales remained strong throughout the first quarter of fiscal 2021 as more customers gravitated toward store pickup and delivery.

~~Our gross~~Gross profit as a percentage of net sales ("gross profit rate") ~~decreased 66~~increased 104 basis points for the three months ended April 30, ~~2020,~~2021 when compared to the same period in the previous fiscal year. The ~~decrease~~increase was primarily ~~the result of a carryover of prior year price investments and unfavorable~~driven by mix shifts into general merchandise in ~~category and channel mix in our~~the Walmart U.S. segment, due in part to ~~changes~~stimulus, lower markdowns and lapping last year's COVID-19 related mix shifts into lower margin categories such as food and consumables.

Despite the growth in ~~consumer spending in response to the COVID-19 pandemic described above.~~

~~Operating~~net sales, operating expenses as a percentage of net sales ~~decreased 62 basis points~~was relatively flat for the three months ended April 30, ~~2020,~~2021 when compared to the same period in the previous fiscal ~~year due to strong sales growth, which was~~year. Increased wage and technology investments in the Walmart U.S. segment were partially offset by ~~approximately $0.9~~$0.5 billion of lower incremental ~~costs~~COVID-19 related ~~to the COVID-19 pandemic, including a special bonus for store associates, additional~~ costs, ~~associated with outfitting our associates with masks and gloves~~ as well as ~~expanded cleaning practices,~~a benefit from depreciation and ~~expanded sick~~amortization expense not recorded subsequent to the held for sale classification of our operations in the U.K. and ~~emergency leave pay.~~Japan in fiscal 2021.

Other gains and losses for the three months ended April 30, 2021 consisted of a net loss of $2.5 billion which primarily reflects $2.1 billion in net losses associated with the fair value changes of our equity investments, as well as $0.4 billion in incremental losses associated with the divestiture of our operations in the U.K. and Japan upon closing of the transactions during the first quarter of fiscal 2022. For the three months ended April 30, 2020, other gains and losses consisted of a gain of $0.7 billion, ~~and $0.8 billion for the three months ended April 30, 2020 and 2019,~~ primarily representing the fair value change of our JD.com investment.

Our effective income tax rate was ~~24.5%~~26.9% for the three months ended April 30, ~~2020~~2021, which increased 237 basis points as compared to ~~24.3%~~24.5% for the same period in the previous fiscal year. The increase in effective tax rate is primarily due to the incremental loss on sale of our operations in the U.K. and Japan which provided minimal realizable tax benefit during the first quarter of fiscal 2022. Our effective income tax rate may fluctuate from quarter to quarter as a result of factors including changes in our assessment of certain tax contingencies, valuation allowances, changes in tax law, outcomes of administrative audits, the impact of discrete items and the mix and size of earnings among our U.S. operations and international operations, which are subject to statutory rates that may be different than the U.S. statutory rate.

As a result of the factors discussed above, consolidated net income ~~increased $0.2~~decreased $1.3 billion for the three months ended April 30, ~~2020,~~2021, when compared to the same period in the previous fiscal year. Accordingly, diluted net income per common share attributable to Walmart was ~~$1.40~~$0.97 for the three months ended April 30, ~~2020,~~2021, which represents ~~an increase~~a decrease of ~~$0.07~~$0.43 when compared to the same period in the previous fiscal year.

Table of Contents

Walmart U.S. Segment


	Three Months Ended April 30,							Three Months Ended April 30,
(Amounts in millions, except unit counts)	2020			2019			(Amounts in millions, except unit counts)	2021			2020
Net sales	$	88,743		$	80,344		Net sales	$	93,167		$	88,743
Percentage change from comparable period	10.5		%	3.3		%	Percentage change from comparable period	5.0		%	10.5		%
Calendar comparable sales increase	10.6		%	3.3		%	Calendar comparable sales increase	5.3		%	10.6		%
Operating income	$	4,302		$	4,142		Operating income	$	5,455		$	4,302
Operating income as a percentage of net sales	4.8		%	5.2		%	Operating income as a percentage of net sales	5.9		%	4.8		%
Unit counts at period end	4,753			4,763			Unit counts at period end	4,743			4,753
Retail square feet at period end	703			704			Retail square feet at period end	703			703

Net sales for the Walmart U.S. segment increased ~~$8.4~~$4.4 billion or ~~10.5%~~5.0% for the three months ended April 30, ~~2020, respectively,~~2021 when compared to the same period in the previous fiscal year. The increase was due to comparable sales of ~~10.6%~~5.3% for the three months ended April 30, ~~2020,~~2021, driven by growth in average ~~ticket. In late February through March, customers consolidated~~ticket primarily aided by consumer stimulus spending. Customers continued to consolidate shopping trips and ~~purchased~~purchase larger baskets ~~in stores as a result of~~which contributed to the ~~COVID-19 pandemic which drove~~ growth in average ticket while transactions decreased. While store sales slowed the first two weeks of April, beginning in mid-April, sales re-accelerated across the segment as government stimulus reached consumers. Store traffic was more volatile duringdecreased overall for the quarter, ~~due to the various stay-in-place orders and social distancing around the country. With the shift~~turning positive in ~~purchasing behavior,~~April 2021. Walmart U.S. eCommerce sales positively contributed approximately ~~4.0%~~3.5% to comparable sales during the three months ended April 30, ~~2020,~~2021 and was primarily driven by ~~online grocery~~store pickup and delivery and walmart.com.

Gross profit rate ~~decreased 113~~increased 142 basis points for the three months ended April 30, ~~2020,~~2021 when compared to the same period in the previous fiscal ~~year. Carryover of prior~~ year, ~~price investments, category and channel~~primarily driven by mix shifts ~~seasonal markdowns,~~into general merchandise due in part to stimulus and ~~the temporary closure of our Auto Care Centers and Vision Centers in response to the COVID-19 pandemic pressured the gross profit rate. Category~~lapping last year's COVID-related mix shifts ~~included increased sales in lower margin categories such as~~into food and consumables, ~~and softer~~as well as lower markdowns.

Despite the increase in net sales, ~~in higher-margin categories such as apparel.~~

~~Operating~~operating expenses as a percentage of net sales ~~decreased 89~~increased 49 basis points for the three months ended April 30, ~~2020,~~2021 when compared to the same period in the previous fiscal year, primarily due to ~~strong sales, which were~~increased wage and technology investments, partially offset by ~~approximately $0.7~~$0.4 billion of lower incremental ~~costs~~COVID-19 related to the health crisis, including a special bonus for store associates, additional costs associated with outfitting our associates with masks and gloves as well as expanded cleaning practices, and expanded sick and emergency leave pay.costs.

As a result of the factors discussed above, operating income increased ~~$0.2~~$1.2 billion for the three months ended April 30, ~~2020,~~2021, when compared to the same period in the previous fiscal year.

Walmart International Segment


	Three Months Ended April 30,
(Amounts in millions, except unit counts)		2021			2020
Net sales		$	27,300		$	29,766
Percentage change from comparable period		(8.3)		%	3.4		%
Operating income		$	1,194		$	806
Operating income as a percentage of net sales		4.4		%	2.7		%
Unit counts at period end		5,184			6,132
Retail square feet at period end		282			345

Three Months Ended April 30,
(Amounts in millions, except unit counts) 2020 2019
Net sales $ 29,766
$ 28,775
Percentage change from comparable period 3.4 % (4.9 )%
Operating income $ 806
$ 738
Operating income as a percentage of net sales 2.7 % 2.6 %
Unit counts at period end 6,132
6,006
Retail square feet at period end 345
344

Net sales for the Walmart International segment ~~increased $1.0~~decreased $2.5 billion or ~~3.4%~~8.3% for the three months ended April 30, 2020, when compared to the same period in the previous fiscal year. The increase was primarily due to positive comparable sales growth in the majority of our markets driven by a change in consumer behavior in response to the COVID-19 pandemic. The increase in net sales was partially offset by negative fluctuations in currency exchange rates of $1.3 billion. With the exception of Canada, all international markets report on a one-month lag.

Beginning in March, we experienced significant economic pressure, channel shift and mix shifts in our major markets as customers focused on pantry stock-ups and reduced purchases of non-essential products. Towards the end of March, we also experienced reduced store operating hours, an increase in government regulations limiting purchases of non-essential products and closed stores and warehouses.

Gross profit rate increased 10 basis points for the three months ended April 30, 2020, when compared to the same period in the previous fiscal year. The increase in gross profit rate for the three months ended April 30, 2020 was primarily due to Flipkart, partially offset by a change in mix towards lower margin categories and formats in response to the COVID-19 pandemic.

~~Table of Contents~~

~~Operating expenses as a percentage of net sales decreased 12 basis points for the three months ended April 30, 2020~~2021 when compared to the same period in the previous fiscal year. The decrease in net sales was due to a $4.2 billion decrease primarily related to the divestiture of Asda and Seiyu, which closed in February 2021 and March 2021, respectively, partially offset by positive net sales growth in several of our remaining markets. Net sales for the three months ended April 30, ~~2020~~2021 includes positive fluctuations in currency exchange rates of $0.9 billion.

Gross profit rate increased 42 basis points for the three months ended April 30, 2021 when compared to the same period in the previous fiscal year primarily due to mix shifts to higher margin categories and fewer markdowns as well as a net benefit related to the previously mentioned divestitures.

Operating expenses as a percentage of net sales decreased 86 basis points for the three months ended April 30, 2021 when compared to the same period in the previous fiscal year. The decrease was primarily due to ~~our growth in comparable store sales described above, which was partially offset by approximately $0.1 billion of incremental costs related~~depreciation and amortization expense not being recorded subsequent to the held for sale classification of Asda and Seiyu in fiscal 2021, as well as a benefit from lower incremental COVID-19 ~~pandemic, including expanded sick and emergency leave pay, bonuses for store associates, and additional~~related costs ~~associated with outfitting our associates with masks and gloves and expanded cleaning practices.~~as compared to the prior comparable period.

As a result of the factors discussed above, operating income increased ~~$0.1~~$0.4 billion for the three months ended April 30, ~~2020,~~2021, when compared to the same period in the previous fiscal year. ~~Because all~~

Table of our international markets except Canada report on a one-month lag, the COVID-19 related impacts described above are expected to be more significant in the second quarter of fiscal 2021 as compared to the first quarter of fiscal 2021.Contents

Sam's Club Segment


	Three Months Ended April 30,
(Amounts in millions, except unit counts)	2021			2020
Including Fuel
Net sales	$	16,692		$	15,163
Percentage change from comparable period	10.1		%	9.6		%
Calendar comparable sales increase	10.1		%	9.6		%
Operating income	$	575		$	494
Operating income as a percentage of net sales	3.4		%	3.3		%
Unit counts at period end	599			599
Retail square feet at period end	80			80

Excluding Fuel (1)
Net sales	$	14,937		$	14,069
Percentage change from comparable period	6.2		%	13.0		%
Operating income	$	530		$	398
Operating income as a percentage of net sales	3.5		%	2.8		%

Three Months Ended April 30,
(Amounts in millions, except unit counts) 2020 2019
Including Fuel
Net sales $ 15,163
$ 13,830
Percentage change from comparable period 9.6 % 1.5 %
Calendar comparable sales increase 9.6 % 1.4 %
Operating income $ 494
$ 451
Operating income as a percentage of net sales 3.3 % 3.3 %
Unit counts at period end 599
599
Retail square feet at period end 80
80

Excluding Fuel ⁽¹⁾

Net sales $ 14,069
$ 12,453
Percentage change from comparable period 13.0 % 0.6 %
Operating income $ 398
$ 443
Operating income as a percentage of net sales 2.8 % 3.6 %

(1) We believe the "Excluding Fuel" information is useful to investors because it permits investors to understand the effect of the Sam's Club segment's fuel sales on its results of operations, which are impacted by the volatility of fuel prices. Volatility in fuel prices may continue to impact the operating results of the Sam's Club segment in the future.

Net sales for the Sam's Club segment increased ~~$1.3~~$1.5 billion or ~~9.6%~~10.1% for the three months ended April 30, ~~2020~~2021 when compared to the same period in the previous fiscal year. ~~The increase was primarily due to~~Our 10.1% growth in comparable ~~sales, including fuel, of 9.6% for the three months ended April 30, 2020. Comparable~~ sales benefited from growth in transactions ~~resulting from the COVID-19 pandemic~~ and average ticket and was aided by stimulus spending. The growth in comparable sales was partially offset by our decision to remove tobacco from certain club locations and lower fuel sales. In February and through March, strong traffic in clubs was driven by COVID-19 stock up trips. In April, traffic slowed as members consolidated trips and increased their average ticket size.locations. Sam's Club eCommerce net sales positively contributed approximately ~~1.7%~~2.8% to comparable sales for the three months ended April 30, ~~2020.~~2021.

Gross profit rate ~~increased 20 basis points~~was relatively flat for the three months ended April 30, ~~2020,~~2021 when compared to the same period in the previous fiscal year. The gross profit rate was negatively impacted by increased ~~from higher~~ fuel sales which have lower margins, offset by favorable merchandise mix and ~~a reduction in~~lower tobacco sales. ~~The increase in the gross profit rate was partially offset by investments in price, and higher eCommerce fulfillment costs.~~

Membership and other ~~incom~~eincome increased ~~5.6%~~11.4% for the three months ended April 30, ~~2020,~~2021 when compared to the same period in the previous fiscal year. The increase for the three months ended April 30, ~~2020~~2021 was due to ~~an increase~~increases in ~~total members, Plus penetration rate, and~~ overall renewal rates, ~~as a result of the COVID-19 pandemic.~~new member sign-ups and Plus penetration.

Operating expenses as a percentage of segment net sales ~~increased 10~~decreased 18 basis points for the three months ended April 30, ~~2020,~~2021 when compared to the same period in the previous fiscal year. The ~~increase~~decrease was primarily the result of ~~approximately $0.1 billion of~~higher fuel sales as well as a benefit from lower incremental COVID-19 related costs, ~~related~~partially offset by increased wage investments and reduced tobacco sales when compared to the COVID-19 pandemic, including additional costs associated with outfitting our associates with masks and gloves and expanded cleaning practices, a special bonus for club associates, and expanded sick and emergency leave pay~~. Additionally,~~same period in the ~~increase in operating expense as a percentage of segment net sales was affected by reduced tobacco and fuel sales.~~previous fiscal year.

As a result of the factors discussed above, operating income increased ~~$43 million~~$0.1 billion for the three months ended April 30, ~~2020,~~2021, when compared to the same period in the previous fiscal year.

~~Table of Contents~~

Liquidity and Capital Resources

Liquidity

The strength and stability of our operations have historically supplied us with a significant source of liquidity. Our cash flows provided by operating activities, supplemented with our long-term debt and short-term borrowings, have been sufficient to fund our operations while allowing us to invest in activities that support the long-term growth of our operations. Generally, some or all of the remaining available cash flow has been used to fund the dividends on our common stock and share repurchases. In the current environment, we believe our sources of liquidity will continue to be adequate to fund operations, finance our global investment and expansion activities, pay dividends and fund our share repurchases for the foreseeable future.

Net Cash Provided by Operating Activities


	Three Months Ended April 30,
(Amounts in millions)		2021		2020
Net cash provided by operating activities		$	2,858	$	7,017

Three Months Ended April 30,
(Amounts in millions) 2020 2019
Net cash provided by operating activities $ 7,017
$ 3,563

Net cash provided by operating activities was ~~$7.0~~$2.9 billion and ~~$3.6~~$7.0 billion for the three months ended April 30, ~~2020~~2021 and ~~2019,~~2020, respectively. The ~~increase~~decrease in cash provided by operating activities for the three months ended April 30, 2021 was primarily due to an increase in inventory purchases due in part to lapping the impact of accelerated ~~timing of~~ inventory sell-through in the ~~current period primarily related to the impacts~~first quarter of ~~COVID-19, as well as the timing~~fiscal 2021.

Table of ~~vendor and other payments.~~Contents

Cash Equivalents and Working Capital Deficit

Cash and cash equivalents were ~~$14.9~~$22.8 billion and ~~$9.3~~$14.9 billion at April 30, 2021 and 2020, ~~and 2019,~~ respectively. ~~We maintained more cash at April 30, 2020 compared to April 30, 2019 in order to provide us with enhanced financial flexibility due to the uncertainties related to the COVID-19 pandemic.~~ Our working capital deficit was $4.3 billion as of April 30, 2021, which decreased when compared to $19.3 billion atas of April 30, 2020, ~~which increased when compared to $18.1 billion at April 30, 2019.~~primarily driven by the increase in cash and cash equivalents as well as the increase in inventory described above. We generally operate with a working capital deficit due to our efficient use of cash in funding operations, consistent access to the capital markets and returns provided to our shareholders in the form of payments of cash dividends and share repurchases.

As of April 30, ~~2020~~2021 and January 31, ~~2020,~~2021, cash and cash equivalents of ~~$2.4~~$2.3 billion and ~~$2.3~~$2.8 billion, respectively, may not be freely transferable to the U.S. due to local laws or other restrictions. Of the ~~$2.4~~$2.3 billion at April 30, ~~2020,~~2021, approximately ~~$0.6~~$0.5 billion can only be accessed through dividends or intercompany financing arrangements subject to approval of the Flipkart minority shareholders; however, this cash is expected to be utilized to fund the operations of Flipkart.

Net Cash Provided by or Used in Investing Activities


	Three Months Ended April 30,							Three Months Ended April 30,
(Amounts in millions)	2020			2019			(Amounts in millions)		2021		2020
Net cash used in investing activities	$	(1,696	)	$	(1,135	)
Net cash provided by (used in) investing activities							Net cash provided by (used in) investing activities		$	5,850	$	(1,696)

Net cash provided by investing activities was $5.9 billion as compared to net cash used in investing activities ~~was~~of $1.7 ~~billion and $1.1~~ billion for the three months ended April 30, ~~2020~~2021 and ~~2019,~~2020, respectively. Net cash ~~used in~~provided by investing activities increased ~~$0.6~~$7.5 billion for the three months ended April 30, ~~2020,~~2021 primarily ~~as a result of lapping~~due to the net proceeds received from the ~~sale~~divestitures of ~~our banking operations in Walmart Canada in fiscal 2020,~~Asda and Seiyu , partially offset by ~~decreased~~increased capital expenditures.

Net Cash Used in or Provided by ~~or Used in~~ Financing Activities


	Three Months Ended April 30,						Three Months Ended April 30,
(Amounts in millions)	2020		2019			(Amounts in millions)		2021		2020
Net cash provided by (used in) financing activities	$	565	$	(846	)
Net cash (used in) provided by financing activities						Net cash (used in) provided by financing activities		$	(5,399)	$	565

Net cash used in or provided by ~~or used in~~ financing activities generally consists of transactions related to our short-term and long-term debt, dividends paid and the repurchase of Company stock. Transactions with noncontrolling interest shareholders are also classified as cash flows from financing activities. Net cash used in financing activities was $5.4 billion as compared to net cash provided by financing activities ~~was~~of $0.6 billion for the three months ended April 30, 2021 and 2020, ~~compared to~~respectively. The increase in net cash used in financing activities ~~of $0.8 billion for the three months ended April 30, 2019. The increase~~ is primarily due to ~~the net increase~~a reduction in short-term borrowings ~~and a reduction in~~as well as increased share ~~repurchases as compared to the prior year. The increase was partially offset by the issuance of long term debt in the prior year to fund general business operations.~~repurchases.

In April ~~2020,~~2021, the Company renewed and extended its existing 364-day revolving credit facility of $10.0 billion as well as its five-year credit facility of $5.0 billion. In total, we had committed lines of credit in the U.S. of $15.0 billion at April 30, ~~2020,~~2021, all undrawn.

~~Table of Contents~~

Long-term Debt

The following table provides the changes in our long-term debt for the three months ended April 30, ~~2020:~~

2021:


(Amounts in millions)	Long-term debt due within one year			Long-term debt			Total			(Amounts in millions)	Long-term debt due within one year		Long-term debt		Total
Balances as of February 1, 2020	$	5,362		$	43,714		$	49,076
Proceeds from issuance of long-term debt	—			—			—
Balances as of February 1, 2021										Balances as of February 1, 2021	$	3,115	$	41,194	$	44,309

Repayments of long-term debt	$	—		$	—		$	—		Repayments of long-term debt	(510)		—		(510)
Reclassifications of long-term debt	622			(622		)	—			Reclassifications of long-term debt	894		(894)		—
Other	$	(1	)	$	(86	)	$	(87	)	Other	1		(27)		(26)
Balances as of April 30, 2020	$	5,983		$	43,006		$	48,989
Balances as of April 30, 2021										Balances as of April 30, 2021	$	3,500	$	40,273	$	43,773

Dividends

OnEffective February 18, ~~2020,~~2021, the Board of Directors approved the fiscal 2022 annual dividend of $2.20 per share, an increase over the fiscal 2021 annual dividend of $2.16 per ~~share, an increase over the fiscal 2020 annual dividend of $2.12 per~~ share. For fiscal ~~2021,~~2022, the annual dividend was or will be paid in four quarterly installments of ~~$0.54~~$0.55 per share, according to the following record and payable dates:



Record Date						Payable Date
March ~~20, 2020~~19, 2021						April ~~6, 2020~~5, 2021
May ~~8, 2020~~7, 2021						June 1, ~~2020~~2021
August ~~14, 2020~~13, 2021						September ~~8, 2020~~7, 2021
December ~~11, 2020~~10, 2021						January ~~4, 2021~~3, 2022

The dividend installments payable on April ~~6, 2020~~5, 2021 and June 1, ~~2020~~2021 were paid as scheduled.

Table of Contents

Company Share Repurchase Program

From time to time, the Company repurchases shares of its common stock under share repurchase programs authorized by the Company's Board of Directors. All repurchases made ~~during the three months ended April 30, 2020~~prior to February 22, 2021 were made under the ~~current $20~~plan in effect at the beginning of fiscal 2022. On February 18, 2021, the Board of Directors approved a new $20.0 billion share repurchase program ~~approved in October 2017,~~ which has no expiration date or other restrictions limiting the period over which the Company can make repurchases, and beginning February 22, 2021, replaced the previous share ~~repurchases.~~repurchase program. As of April 30, ~~2020,~~2021, authorization for ~~$5.0~~$17.6 billion of share repurchases remained under the new share repurchase program. Any repurchased shares are constructively retired and returned to an unissued status.

We regularly review share repurchase activity and consider several factors in determining when to execute share repurchases, including, among other things, current cash needs, capacity for leverage, cost of borrowings, our results of operations and the market price of our common stock. We anticipate that a majority of the ongoing share repurchase program will be funded through the Company's free cash flow. ~~We are prudently managing our share repurchases in order to maintain a strong balance sheet in light of the COVID-19 pandemic.~~The following table provides, on a settlement date basis, share repurchase information for the three months ended April 30, ~~2020~~2021 and ~~2019:~~

2020:


	Three Months Ended April 30,					Three Months Ended April 30,
(Amounts in millions, except per share data)	2020		2019		(Amounts in millions, except per share data)	2021		2020
Total number of shares repurchased	$	6.3	$	21.7	Total number of shares repurchased	20.6		6.3
Average price paid per share	$	114.73	$	98.22	Average price paid per share	$	136.18	$	114.73
Total amount paid for share repurchases	$	723	$	2,135	Total amount paid for share repurchases	$	2,809	$	723

Capital Resources

We believe cash flows from operations, our current cash position and access to capital markets will continue to be sufficient to meet our anticipated operating cash needs, which include funding seasonal increases in merchandise inventories, our capital expenditures, acquisitions, dividend payments and share repurchases.

We have strong commercial paper and long-term debt ratings that have enabled and should continue to enable us to refinance our debt as it becomes due at favorable rates in the capital markets. We also have $15.0 billion in various committed lines of credit in the U.S., all of which currently remains undrawn. At April 30, ~~2020,~~2021, the ratings assigned to our commercial paper and rated series of our outstanding long-term debt were as follows:

Rating agency

Commercial paper

Long-term debt

Standard & Poor's

A-1+

Moody's Investors Service

P-1

Aa2

Fitch Ratings

F1+

Credit rating agencies review their ratings periodically and, therefore, the credit ratings assigned to us by each agency may be subject to revision at any time. Accordingly, we are not able to predict whether our current credit ratings will remain consistent

~~Table of Contents~~

over time. Factors that could affect our credit ratings include changes in our operating performance, the general economic environment, conditions in the retail industry, our financial position, including our total debt and capitalization, and changes in our business strategy. Any downgrade of our credit ratings by a credit rating agency could increase our future borrowing costs or impair our ability to access capital and credit markets on terms commercially acceptable to us. In addition, any downgrade of our current short-term credit ratings could impair our ability to access the commercial paper markets with the same flexibility that we have experienced historically, potentially requiring us to rely more heavily on more expensive types of debt financing. The credit rating agency ratings are not recommendations to buy, sell or hold our commercial paper or debt securities. Each rating may be subject to revision or withdrawal at any time by the assigning rating organization and should be evaluated independently of any other rating. Moreover, each credit rating is specific to the security to which it applies.

Other Matters

In ~~Note 6~~N ote 7 to our Condensed Consolidated Financial Statements, which is captioned "Contingencies" and appears in Part I of this Quarterly Report on Form 10-Q under the caption "Item 1. Financial Statements," we discuss, under the sub-caption ~~"ASDA Equal Value Claims," certain existing employment claims against Asda including certain risks arising therefrom. In that~~ ~~Note 6, we also discuss, under the sub-caption~~ "~~Prescription Opiate~~Opioids Litigation ~~and Other Matters~~," the Prescription Opiate Litigation and other matters, including certain risks arising therefrom. In that Note 7, we also discuss, under the sub-caption "Asda Equal Value Claims," the Company's indemnification obligation for the Asda Equal Value Claims matter. We ~~also~~ discuss various legal proceedings related to the ~~ASDA Equal Value Claims,~~Federal and ~~the~~State Prescription Opiate Litigation, DOJ Opioid Civil Litigation and Opioids Related Securities Class Actions and Derivative Litigation in Part II of this Quarterly Report on Form 10-Q under the caption "Item 1. Legal Proceedings," under the sub-caption "I. Supplemental Information." We also discuss items related to the Asda Equal Value Claims matter and the Money Transfer Agent Services Proceedings matter under the caption "Item 1. Legal Proceedings," under the sub-caption "II. Certain Other Matters." The foregoing matters and other matters described elsewhere in this Quarterly Report on Form 10-Q represent contingent liabilities of the Company that may or may not result in the incurrence of a material liability by the Company upon their final resolution.

Table of Contents

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market risks relating to our operations result primarily from changes in interest rates, currency exchange rates orand the ~~market~~fair value of ~~our~~certain equity investments. Our market risks at April 30, ~~2020~~2021 are similar to those disclosed in our Annual Report on Form 10-K for the fiscal year ended January 31, ~~2020.~~2021. The information concerning market risk set forth in Part II, Item 7A. of our Annual Report on Form 10-K for the fiscal year ended January 31, ~~2020,~~2021, as filed with the SEC on March ~~20, 2020,~~19, 2021, under the caption ~~"Quantitative~~"Quantitative and Qualitative Disclosures About Market Risk," is hereby incorporated by reference into this Quarterly Report on Form 10-Q.

Item 4. Controls and Procedures

We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information, which is required to be timely disclosed, is accumulated and communicated to management in a timely fashion. In designing and evaluating such controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Our management is necessarily required to use judgment in evaluating controls and procedures. Also, we have investments in unconsolidated entities. Since we do not control or manage those entities, our controls and procedures with respect to those entities are substantially more limited than those we maintain with respect to our consolidated subsidiaries.

In the ordinary course of business, we review our internal control over financial reporting and make changes to our systems and processes to improve such controls and increase efficiency, while ensuring that we maintain an effective internal control environment. Changes may include such activities as implementing new, more efficient systems, updating existing systems, automating manual processes, standardizing controls globally, migrating certain processes to our shared services organizations and increasing monitoring controls. These changes have not materially affected, and are not reasonably likely to materially affect, the Company's internal control over financial reporting and they allow us to continue to enhance our internal controls over financial reporting and ensure that they remain effective.

An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report was performed under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure and are effective to provide reasonable assurance that such information is recorded, processed, summarized and reported within the time periods specified by the SEC's rules and forms.

There has been no change in the Company's internal control over financial reporting during the most recently completed fiscal quarter, that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

Table of Contents

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

I. SUPPLEMENTAL INFORMATION: We discuss certain legal proceedings in Part I of this Quarterly Report on Form 10-Q under the caption "Item 1. Financial Statements," in Note 7 to our Condensed Consolidated Financial Statements, which is captioned "Contingencies," under the sub-caption "Legal Proceedings." We refer you to that discussion for important information concerning those legal proceedings, including the basis for such actions and, where known, the relief sought. We provide the following additional information concerning those legal proceedings, including the name of the lawsuit, the court in which the lawsuit is pending, and the date on which the petition commencing the lawsuit was filed.

Federal and State Prescription Opiate Litigation: In re National Prescription Opiate Litigation (MDL No. 2804) (the "MDL"). The MDL is pending in the U.S. District Court for the Northern District of Ohio and includes over 2,000 cases as of May 24, 2021, some of which cases are in the process of being transferred to the MDL or have remand motions pending. A trial is currently scheduled to begin in one of the MDL cases in October 2021 against a number of parties, including the Company, regarding opioid dispensing and distribution claims. There is one case in which the Company is named as a defendant that was remanded from the MDL court to the U.S. District Court for the Eastern District of Oklahoma. In addition, there are over 200 state court cases pending as of May 24, 2021, some of which may be removed to federal court to seek MDL transfer. The case citations for the state cases are listed on Exhibit 99.1 to this Form 10-Q.

DOJ Opioid Civil Litigation: On October 22, 2020, the Company filed a declaratory judgment action in the U.S. District Court for the Eastern District of Texas against the U.S. Department of Justice (the “DOJ”) and the U.S. Drug Enforcement Administration, asking a federal court to clarify the roles and responsibilities of pharmacists and pharmacies as to the dispensing and distribution of opioids under the Controlled Substances Act (the “CSA”). The Company’s action, Walmart Inc. v. U.S. Department of Justice et al., USDC, Eastern Dist. of Texas, 10/22/20, was dismissed and the Company is appealing the decision. A civil complaint pending in the U.S. District Court for the District of Delaware has been filed by the DOJ against the Company, in which the DOJ alleges violations of the CSA related to nationwide distribution and dispensing of opioids. U.S. v. Walmart Inc., et al., USDC, Dist. of DE, 12/22/20. The Company filed a motion to dismiss the DOJ complaint on February 22, 2021. The DOJ filed its opposition brief on April 23, 2021 and the Company filed its reply brief on May 24, 2021.

Opioids Related Securities Class Actions and Derivative Litigation: Two derivative complaints and two securities class action lawsuits drawing heavily on the allegations of the DOJ complaint have been filed in Delaware naming various current and former directors and certain officers as defendants. The plaintiffs in the derivative suits (in which the Company is a nominal defendant) allege, among other things, that the defendants breached their fiduciary duties in connection with oversight of opioids dispensing and distribution; and that the defendants violated Section 14(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and are liable for contribution under Section 10(b) of the Exchange Act in connection with the Company’s disclosures about opioids. The securities class actions, alleging violations of Sections 10(b) and 20(a) of the Exchange Act regarding the Company’s disclosures with respect to opioids were purportedly filed on behalf of a class of investors who acquired Walmart stock from March 30, 2016 through December 22, 2020. On May 11, 2021, the court consolidated the class actions and appointed a lead plaintiff and lead counsel.

Derivative Lawsuits: Abt v. Alvarez et al., USDC, Dist. of DE, 2/9/21; Nguyen v. McMillon et al., USDC, Dist. of DE, 4/16/21.

Securities Class Actions: Stanton v. Walmart Inc. et al., USDC, Dist. of DE, 1/20/21 and Martin v. Walmart Inc. et al., USDC, Dist. of DE, 3/5/21, consolidated into In re Walmart Inc. Securities Litigation, USDC, Dist. of DE, 5/11/21.

Table of Contents

II. CERTAIN OTHER MATTERS

ASDA Equal Value Claims: Ms S Brierley & Others v ASDA Stores Ltd (2406372/2008 & Others - Manchester Employment Tribunal); ASDA Stores Ltd v Brierley & Ors (A2/2016/0973 - United Kingdom Court of Appeal); ASDA Stores Ltd v Ms S Brierley & Others (UKEAT/0059/16/DM - United Kingdom Employment Appeal Tribunal); and ASDA Stores Ltd v Ms S Brierley & Others (UKEAT/0009/16/JOJ - United Kingdom Employment Appeal Tribunal).

~~Prescription Opiate Litigation~~Money Transfer Agent Services Proceedings:: In re National Prescription Opiate Litigation (MDL No. 2804) (the "MDL"). The MDL is pending in the U.S. District Court for the Northern District of Ohio and includes over 2,000 cases as of May 27, 2020; some cases are in the process of being transferred to the MDL or have remand motions pending. A trial is currently scheduled to begin on November 9, 2020 against a number of parties, including the Company, regarding opioid distribution claims. A trial is also currently scheduled to begin in the MDL in May 2021 against a number of parties, including the Company, regarding opioid dispensing and distribution claims. There is one case that was remanded from the MDL court to the United States District Court for the Eastern District of Oklahoma. In addition, there are over 200 state court cases pending as of May 27, 2020, some of which may be removed to federal court to seek MDL transfer. The case citations for the state court cases and other information are included on ~~Exhibit 99.1~~ ~~to this Form 10-Q.~~

~~II. CERTAIN OTHER MATTERS~~: The Company has received grand jury subpoenas issued by the ~~U.S.~~United States Attorney’s Office for the Middle District of Pennsylvania seeking documents regarding the Company’s consumer fraud program and anti-money laundering compliance related to the Company’s money transfer services, where Walmart is an agent. The most recent subpoena was issued in ~~January~~August 2020. The Company has been responding to these ~~subpoenas.~~subpoenas and is cooperating with the government’s investigation. The Company has also ~~been responding~~responded to civil investigative demands from the ~~U.S.~~United States Federal Trade Commission (the “FTC”) and is cooperating with the FTC’s investigation related to money transfers and the Company’s anti-fraud ~~program. Due~~program in its capacity as an agent. The Company may engage in discussions with the FTC staff regarding an appropriate resolution of this matter, although there can be no assurance that if those discussions occur, the Company would reach any such resolution with the FTC. If there is no resolution of the matter, the FTC staff could request authority of the FTC to file a civil complaint against the ~~investigative stage~~Company seeking various forms of ~~these matters, the~~monetary and injunctive relief. The Company is unable to predict the final outcome of the investigations, any discussions, or any related actions by the governmental ~~entities.~~entities regarding these matters. While the Company does not currently believe that the final outcome of these matters will have a material adverse effect on its business, financial condition, results of operations or cash flows, the Company can provide no assurance as to the scope and final outcome of these matters and whether its business, financial position, results of operations or cash flows will not be materially adversely affected.

III. ENVIRONMENTAL MATTERS: Item 103 of SEC Regulation S-K requires disclosure of certain environmental ~~matters. The following~~ matters are disclosed in accordance with that requirement. For the matters listed below, management does not believe any possible loss or the range of any possible loss that may be incurred in connection with each matter, individually or in the aggregate, will be materialwhen a governmental authority is a party to the ~~Company's financial condition or results of operations.~~

~~In September 2018, the U.S. Environmental Protection Agency (the “EPA”) notified the Company that it initiated an administrative penalty action by issuing a Draft Consent Agreement~~proceedings and ~~Final Order. The letter accompanying the Draft Consent Agreement and Final Order alleges~~such proceedings involve potential monetary sanctions that the Company ~~distributed and/or sold three unregistered pesticide products from March~~reasonably believes will exceed an applied threshold of $1 million. Applying this threshold, there are no environmental matters to ~~June, 2017. The EPA is seeking a penalty of $960,000. The manufacturer of the product is responsible~~disclose for ~~ensuring that a FIFRA-regulated product is properly registered prior to its sale. The Company is cooperating with the EPA.~~

In January 2018, the Environmental Prosecutor of the State of Chiapas (Procuraduría Ambiental del Estado de Chiapas) in Mexico imposed a fine of approximately $163,000 for the absence of an Environmental Impact Authorization License related to the store Mi Bodega Las Rosas. The Company is challenging the fine.

In April 2017, the California Air Resources Board (the "ARB") notified the Company that it had taken the position that retailers are required to use unclaimed deposits collected on sales of small containers of automotive refrigerant to fund certain consumer education programs. The ARB alleged that the Company had improperly retained approximately $4.2 million in unclaimed deposits and sought reimbursement. In May 2020, without any admission of wrongdoing, the Company and the ARB entered into a settlement pursuant to which Walmart agreed to pay $150,000 to the Car Care Council for the purpose of funding enhanced educational programs on measures to reduce greenhouse gas emissions associated with the use of small containers of automotive refrigerant.

In April 2013, a subsidiary of the Company, Corporacion de Compañias Agroindustriales, operating in Costa Rica, became aware that the Municipality of Curridabat is seeking a penalty of approximately $380,000 in connection with the construction of a retaining wall for a perishables distribution center that is situated along a protected river bank. The subsidiary obtained permits from the Municipality and the Secretaria Técnica Nacional Ambiental at the time of construction, but the Municipality now alleges that the wall is non-conforming. The Company is cooperating with the Municipality.

this period.

Table of Contents

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the risk factors disclosed in Part I, Item 1A, under the caption "Risk ~~Factors"~~Factors," of our Annual Report on Form 10-K for the fiscal year ended January 31, ~~2020. The COVID-19 pandemic and related governmental actions have had wide-ranging effects on our business and the global economy and have exacerbated the potential for certain~~2021 which risks identified in that disclosure, including, without limitation, risks related to the successful execution of our omni-channel strategy, operational risks associated with geo-political and catastrophic events, risks associated with our suppliers, reputational risks and risk associated with changes in and failure to comply with laws and regulations, to materially and adversely affect our financial performance. The financial impact to the Company of the COVID-19 pandemic during the three month period ended April 30, 2020, as well as certain of the actions we have taken to protect the health and safety of our associates, customers, members and the communities we serve, are discussed in Item 2 of Part I, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Given the uncertainty regarding the duration and scope of the COVID-19 pandemic and its economic effect in the U.S and the other markets we serve, there can be no assurance that the pandemic will notcould materially and adversely affect our business, results of operations, financial condition, ~~or liquidity~~and liquidity. No material change in the ~~future.~~risk factors discussed in such Form 10-K has occurred. Such risk factors do not identify all risks that we face because our business operations could also be affected by additional factors that are not presently known to us or that we currently consider to be immaterial to our operations. Our business operations could also be affected by additional factors that apply to all companies operating in the U.S. and globally.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

From time to time, the Company repurchases shares of its common stock under share repurchase programs authorized by the Company's Board of Directors. All repurchases made ~~during the three months ended April 30, 2020,~~prior to February 22, 2021 were made under the ~~current $20~~plan in effect at the beginning of fiscal 2022. On February 18, 2021, the Board of Directors approved a new $20.0 billion share repurchase program ~~approved in October 2017,~~ which has no expiration date or other restrictions limiting the period over which the Company can make repurchases, and beginning February 22, 2021, replaced the previous share ~~repurchases.~~repurchase program. As of April 30, ~~2020,~~2021, authorization for 5$17.6 billion of share repurchases remained under the share repurchase program. Any repurchased shares are constructively retired and returned to an unissued status.

The Company regularly reviews its share repurchase activity and considers several factors in determining when to execute share repurchases, including, among other things, current cash needs, capacity for leverage, cost of borrowings and the market price of its common stock. Share repurchase activity under our share repurchase program, on a trade date basis, for the three months ended April 30, ~~2020,~~2021, was as follows:

Fiscal Period
Total
Number of
Shares
Purchased

Average
Price Paid
per Share

Total Number of
Shares Purchased
as Part of Publicly
Announced Plans or
Programs

Approximate Dollar
Value of Shares that
May Yet Be
Purchased Under the
Plans or Programs⁽¹⁾
(billions)
February 1 - 29, 2020 2,905,716
$ 115.11
2,905,716
$ 5.3
March 1 - 31, 2020 3,128,100
114.34
3,128,100
5.0
April 1 - 30, 2020 —
—
—
5.0
Total 6,033,816
6,033,816


Fiscal Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(1) (billions)
February 1 - 28, 2021	4,943,498	$	139.45	4,943,498	$	19.8
March 1 - 31, 2021	9,167,264	131.91		9,167,264	18.5
April 1 - 30, 2021	6,688,136	139.47		6,688,136	17.6
Total	20,798,898			20,798,898

(1) Represents approximate dollar value of shares that could have been purchased under the plan in effect at the end of the month.

Item 5. Other Information

Cautionary Statement Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains statements that Walmart believes are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Those forward-looking statements are intended to enjoy the protection of the safe harbor for forward-looking statements provided by that ~~Act.~~Act as well as protections afforded by other federal securities laws.

Forward-looking Statements

The forward-looking statements in this report include, among other things:

•

~~statements in~~ ~~Note 3~~ to those Condensed Consolidated Financial Statements regarding the expected insignificance of the amounts relating to certain net investment and cash flow derivative financial instruments to which Walmart is a party that are expected to be reclassified from accumulated other comprehensive loss to net income in the next 12 months; and statements in ~~Note 6~~ to those Condensed Consolidated Financial Statements regarding the possible outcome of, and future effect on Walmart's financial condition and results of operations of, certain litigation and other proceedings to which Walmart is a party, the possible outcome of, and future effect on Walmart's business of, certain other matters to which Walmart is subject, including Walmart's existing ASDA

•statements in Note 7 to those Condensed Consolidated Financial Statements regarding the possible outcome of, and future effect on Walmart's financial condition and results of operations of, certain litigation and other proceedings to which Walmart is a party, the possible outcome of, and future effect on Walmart's business of, certain other matters to which Walmart is subject, including the Company's Opioids Litigation as well as Walmart's ongoing indemnification obligation for the Asda Equal Value Claims ~~and the National Opiate Litigation and Other Matters,~~ and the liabilities, losses, expenses and costs that Walmart may incur in connection with such matters;

Table of Contents

•in Part I, Item 2 "Management's Discussion and Analysis of Financial Condition and Results of Operations": statements regarding future changes to our business and our expectations about the potential impacts on our business, financial position, results of operations or cash flows as a result of the COVID-19 pandemic; statements under the caption "Overview" relating to the possible impact of volatility in currency exchange rates on the results, including net sales and operating income, of Walmart and the Walmart International segment; statements under the caption "Company Performance Metrics - Strong, Efficient Growth" regarding the focus of our investments and the impact of such investments; statements under the caption "Company Performance Metrics – Strategic Capital Allocation" regarding our strategy and discipline for capital allocation; statements under thecaption "Company Performance Metrics - Returns" regarding our belief that returns on capital will improve as we execute on our strategic framework; statements under the caption "Results of Operations - Consolidated Results of Operations" regarding the possibility of fluctuations in Walmart's effective income tax rate from quarter to quarter and the factors that may cause those fluctuations; a statement under the caption "Results of Operations - Sam's Club Segment" relating to the possible continuing impact of volatility in fuel prices on the future operating results of the Sam's Club segment; a statement under the caption "Liquidity and Capital Resources - Liquidity" that Walmart's sources of liquidity will be adequate to fund its operations, finance its global investment and expansion activities, pay dividends and fund share repurchases; statements under the caption "Liquidity and Capital Resources - Liquidity - Net Cash Provided by Operating Activities - Cash Equivalents and Working Capital Deficit" regarding management's expectation that cash in market will be utilized to fund Flipkart's operations; a statement under the caption "Liquidity and Capital Resources Liquidity - Net Cash Used in Financing Activities - Dividends" regarding the payment of dividends in fiscal 2021; a statement under the caption "Liquidity and Capital Resources Liquidity - Net Cash Used in Financing Activities - Company Share Repurchase Program" regarding funding of the new share repurchase program; statements under the caption "Liquidity and Capital Resources - Capital Resources" regarding management's expectations regarding the Company's cash flows from operations, current cash position and access to capital markets continuing to be sufficient to meet its anticipated operating cash needs, the Company's commercial paper and long-term debt ratings continuing to enable it to refinance its debts at favorable rates, factors that could affect its credit ratings, and the effect that lower credit ratings would have on its access to capital and credit markets and borrowing costs; and statements under the caption "Other Matters"regarding the contingent liabilities of the Company that may or may not result in the incurrence of a material liability by the Company;

•in Part I, Item 4 "Controls and Procedures": the statements regarding the effect of changes to systems and processes on our internal control over financial reporting; and

•statements in Part II, Item 1 "Legal Proceedings" regarding the effect that possible losses or the range of possible losses that might be incurred in connection with the legal proceedings and other matters discussed therein may have on our financial condition or results of operations.

•

~~in Part I, Item 2 "Management's Discussion and Analysis of Financial Condition and Results of Operations~~": statements regarding future changes to our business and our expectations about the potential impacts on our business, financial position, results of operations or cash flows as a result of the COVID-19 pandemic; statements under the caption "~~Overview~~" relating to the possible impact of volatility in currency exchange rates on the results, including net sales and operating income, of Walmart and the Walmart International segment; statements under the caption “COVID-19 Updates” regarding the continued uncertainty in our business and the global economy due to the duration and intensity of the COVID-19 pandemic; statements under the caption "~~Company Performance Metrics - Strong, Efficient Growth" regarding the focus of our investments and the impact of such investments; statements under the caption "Company Performance Metrics – Strategic Capital Allocation" regarding our strategy and discipline for capital allocation; statements under thecaption "Company Performance Metrics", and the "-~~ ~~Returns" sub-heading under that caption, regarding our belief that returns on capital will improve as we execute on our strategic framework; statements under the caption "Results of Operations - Consolidated Results of Operations" regarding the possibility of fluctuations in Walmart's effective income tax rate from quarter to quarter and the factors that may cause those fluctuations; a statement under the caption "Results of Operations - Sam's Club Segment" relating to the possible continuing impact of volatility in fuel prices on the future operating results of the Sam's Club segment; a statement under the caption "Liquidity and Capital Resources - Liquidity~~" that Walmart's sources of liquidity will be adequate to fund its operations, finance its global investment and expansion activities, pay dividends and fund share repurchases; statements under the caption "~~Liquidity and Capital Resources - Liquidity - Net Cash Provided by Operating Activities - Cash Equivalents and Working Capital" regarding management's expectation that cash in market will be utilized to fund Flipkart's operations; a statement under the caption "Liquidity and Capital Resources Liquidity - Net Cash Used in Financing Activities - Dividends" regarding the payment of dividends in fiscal 2020; a statement under the caption "Liquidity and Capital Resources Liquidity - Net Cash Used in Financing Activities - Company Share Repurchase Program" regarding funding of the ongoing share repurchase program; statements under the caption "Liquidity and Capital Resources - Capital Resources~~" regarding management's expectations regarding the Company's cash flows from operations, current cash position and access to capital markets continuing to be sufficient to meet its anticipated operating cash needs, the Company's commercial paper and long-term debt ratings continuing to enable it to refinance its debts at favorable rates, factors that could affect its credit ratings, and the effect that lower credit ratings would have on its access to capital and credit markets and borrowing costs; and statements under the caption "~~Other Matters~~"~~regarding the contingent liabilities of the Company that may or may not result in the incurrence of a material liability by the Company;~~


•	~~in Part I, Item 4 "Controls and Procedures": the statements regarding the effect of changes to systems and processes on our internal control over financial reporting;~~


•	~~statements in Part II, Item 1 "Legal Proceedings~~" regarding the effect that possible losses or the range of possible losses that might be incurred in connection with the legal proceedings and other matters discussed therein may have on our financial condition or results of operations; and


•	~~statements in Part II, Item 1A. "Risk Factors~~" regarding the uncertainty of the duration and scope of the COVID-19 pandemic and its potential impact on our business, results of operations, financial condition or liquidity in the future and its effect on other risk factors disclosed in Item 1A. “Risk Factors” of our Annual Report on Form 10-K.

Table of Contents

Risks, Factors and Uncertainties Regarding Our Business

These forward-looking statements are subject to risks, uncertainties and other factors, domestically and internationally, including:

Economic Factors

•economic, geo-political, capital markets and business conditions, trends and events around the world and in the markets in which Walmart operates;

•currency exchange rate fluctuations;

•changes in market rates of interest;

•changes in market levels of wages;

•changes in the size of various markets, including eCommerce markets;

•unemployment levels;

•inflation or deflation, generally and in certain product categories;

•transportation, energy and utility costs;

•commodity prices, including the prices of oil and natural gas;

•consumer confidence, disposable income, credit availability, spending levels, shopping patterns, debt levels, and demand for certain merchandise;

•trends in consumer shopping habits around the world and in the markets in which Walmart operates;

•consumer enrollment in health and drug insurance programs and such programs' reimbursement rates and drug formularies; and

•initiatives of competitors, competitors' entry into and expansion in Walmart's markets or lines of business, and competitive ~~pressures;~~pressures.

Operating Factors

•the amount of Walmart's net sales and operating expenses denominated in U.S. dollar and various foreign currencies;

•the financial performance of Walmart and each of its segments, including the amount of Walmart's cash flow during various periods;

•customer transaction and average ticket in Walmart's stores and clubs and on its eCommerce platforms;

•the mix of merchandise Walmart sells and its customers purchase;

•the availability of goods from suppliers and the cost of goods acquired from suppliers;

•the effectiveness of the implementation and operation of Walmart's strategies, plans, programs and initiatives;

•COVID-19 related challenges, including reduced customer transaction and ticket, reduced store hours, shifts in demand from discretionary products, supply chain disruption and production and dissemination of global vaccines;

•the impact of acquisitions, divestitures, store or club closures, and other strategic decisions;

•Walmart's ability to successfully integrate acquired ~~businesses, including within the eCommerce space;~~businesses;

•unexpected changes in Walmart's objectives and plans;

•the amount of shrinkage Walmart experiences;

•consumer acceptance of and response to Walmart's stores and clubs, eCommerce platforms, programs, merchandise offerings and delivery methods;

•Walmart's gross profit margins, including pharmacy margins and margins of other product categories;

•the selling prices of gasoline and diesel fuel;

•disruption of seasonal buying patterns in Walmart's markets;

•disruptions in Walmart's supply ~~chain;~~chain and inventory management;

•cybersecurity events affecting Walmart and related costs and impact of any disruption in business;

•Walmart's labor costs, including healthcare and other benefit costs;

•Walmart's casualty and accident-related costs and insurance costs;

•the size of and turnover in Walmart's workforce and the number of associates at various pay levels within that workforce;

•the availability of necessary personnel to staff Walmart's stores, clubs and other facilities;

•delays in the opening of new, expanded, relocated or remodeled units;

•developments in, and the outcome of, legal and regulatory proceedings and investigations to which Walmart is a party or is subject, and the liabilities, obligations and expenses, if any, that Walmart may incur in connection therewith;

•changes in the credit ratings assigned to the Company's commercial paper and debt securities by credit rating agencies;

•Walmart's effective tax rate; and

•unanticipated changes in accounting judgments and ~~estimates;~~

estimates.

Table of Contents

Regulatory and Other Factors

•changes in existing, tax, labor and other laws and changes in tax rates, including the enactment of laws and the adoption and interpretation of administrative rules and regulations;

•the imposition of new taxes on imports, new tariffs and changes in existing tariff rates;

•the imposition of new trade restrictions and changes in existing trade restrictions;

•adoption or creation of new, and modification of existing, governmental policies, programs, initiatives and actions in the markets in which Walmart operates and elsewhere and actions with respect to such policies, programs and initiatives;

•changes in government-funded benefit programs and the extent and effectiveness of any further COVID-19 related stimulus packages;

•changes in currency control laws;

•changes in the level of public assistance payments;

•one or more prolonged federal government shutdowns;

•the timing of federal income tax refunds;

•natural disasters, changes in climate, catastrophic events and global health epidemics or pandemics including COVID-19; and

•changes in generally accepted accounting principles in the United States.

Other Risk Factors; No Duty to Update

This Quarterly Report on Form 10-Q should be read in conjunction with Walmart's Annual Report on Form 10-K for the fiscal year ended January 31, ~~2020~~2021 and all of Walmart's subsequent other filings with the Securities and Exchange Commission. Walmart urges investors to consider all of the risks, uncertainties and other factors disclosed in these filings carefully in evaluating the forward-looking statements contained in this Quarterly Report on Form 10-Q. The Company cannot assure you that the results or developments anticipated by the Company and reflected or implied by any forward-looking statement contained in this Quarterly Report on Form 10-Q will be realized or, even if substantially realized, that those results or developments will result in the forecasted or expected consequences for the Company or affect the Company, its operations or its financial performance as the Company has forecasted or expected. As a result of the matters discussed above and other matters, including changes in facts, assumptions not being realized or other factors, the actual results relating to the subject matter of any forward-looking statement in this Quarterly Report on Form 10-Q may differ materially from the anticipated results expressed or implied in that forward-looking statement. The forward-looking statements included in this Quarterly Report on Form 10-Q are made only as of the date of this report, and Walmart undertakes no obligation to update any such statements to reflect subsequent events or circumstances.

Table of Contents

Item 6. Exhibits

The following documents are filed as an exhibit to this Quarterly Report on Form 10-Q:



Exhibit 3.1						Restated Certificate of Incorporation of the Company dated February 1, 2018 is incorporated herein by reference to Exhibit 3.1 to the Report on Form 8-K that the Company filed on February 1, 2018 (File No. 001-06991)

Exhibit 3.2						Amended and Restated Bylaws of the Company dated July 23, 2019 are incorporated herein by reference to Exhibit 3.1 to the Report on Form 8-K that the Company filed on July 26, 2019 (File No. 001-06991)

Exhibit 31.1*						Chief Executive Officer Section 302 Certification

Exhibit 31.2*						Chief Financial Officer Section 302 Certification

Exhibit 32.1**						Chief Executive Officer Section 906 Certification

Exhibit 32.2**						Chief Financial Officer Section 906 Certification



Exhibit 99.1*						State Court ~~Prescription Opiate~~Opioids Litigation ~~Cases~~Case Citations and Currently Scheduled Trial Dates









Exhibit 101.INS*						Inline XBRL Instance Document

Exhibit 101.SCH*						Inline XBRL Taxonomy Extension Schema Document

Exhibit 101.CAL*						Inline XBRL Taxonomy Extension Calculation Linkbase Document

Exhibit 101.DEF*						Inline XBRL Taxonomy Extension Definition Linkbase Document

Exhibit 101.LAB*						Inline XBRL Taxonomy Extension Label Linkbase Document

Exhibit 101.PRE*						Inline XBRL Taxonomy Extension Presentation Linkbase Document

Exhibit 104						The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended April 30, ~~2020,~~2021, formatted in Inline XBRL (included in Exhibit 101)



*			Filed herewith as an Exhibit.
**			Furnished herewith as an Exhibit.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

WALMART INC.


Date: June 4, 2021		By:	/s/ C. Douglas McMillon
			C. Douglas McMillon President and Chief Executive Officer (Principal Executive Officer)

Date: June ~~3, 2020~~4, 2021		By:	~~/s/ C. Douglas McMillon~~
		~~C. Douglas McMillon~~ ~~President and Chief Executive Officer~~ ~~(Principal Executive Officer)~~

~~June 3, 2020~~	~~By:~~	/s/ M. Brett Biggs
			M. Brett Biggs Executive Vice President and Chief Financial Officer (Principal Financial Officer)

Date: June ~~3, 2020~~4, 2021		By:	/s/ David M. Chojnowski
			David M. Chojnowski Senior Vice President and Controller (Principal Accounting Officer)



	Page
Part I. Financial Information
	Item 1. Financial Statements
		Condensed Consolidated Statements of Income	3
		Condensed Consolidated Statements of Comprehensive Income	4
		Condensed Consolidated Balance Sheets	5
		Condensed Consolidated Statements of Shareholders' Equity	6
		Condensed Consolidated Statements of Cash Flows	7
		Notes to Condensed Consolidated Financial Statements	8
	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		1415
	Item 3. Quantitative and Qualitative Disclosures About Market Risk		25
	Item 4. Controls and Procedures		25

Part II. Other Information
	Item 1. Legal Proceedings		26
	Item 1A. Risk Factors		2728
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		2728
	Item 5. Other Information		2728
	Item 6. Exhibits		3132

Signatures			3233



(Amounts in millions)	Fair Value as of April 30, 2020		Fair Value as of January 31, 2020
Investment in JD.com measured using Level 1 inputs	$	3,105	$	2,715
Investment in JD.com measured using Level 2 inputs	3,115		2,723
Total	$	6,220	$	5,438



	April 30, 2020						January 31, 2020
(Amounts in millions)	Notional Amount		Fair Value				Notional Amount		Fair Value
Receive fixed-rate, pay variable-rate interest rate swaps designated as fair value hedges	$	4,000	$	201		⁽¹⁾	$	4,000	$	97		⁽¹⁾
Receive fixed-rate, pay fixed-rate cross-currency swaps designated as net investment hedges	3,750		593			⁽¹⁾	3,750		455			⁽¹⁾
Receive fixed-rate, pay fixed-rate cross-currency swaps designated as cash flow hedges	3,966		(1,155		)	⁽²⁾	4,067		(696		)	⁽²⁾
Total	$	11,716	$	(361	)		$	11,817	$	(144	)