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 July 31, 2021.

or

☐ 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 001-06991

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) 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  ☐

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 2,788,497,816 shares of common stock outstanding as of August 31, 2021.

Walmart Inc.

Form 10-Q

For the Quarterly Period Ended July 31, 2021

Table of Contents

			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		15
	Item 3. Quantitative and Qualitative Disclosures About Market Risk		25
	Item 4. Controls and Procedures		26
Part II. Other Information
	Item 1. Legal Proceedings		27
	Item 1A. Risk Factors		29
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		29
	Item 5. Other Information		29
	Item 6. Exhibits		33
Signatures			34

2

PART I. FINANCIAL INFORMATION

Item 1.Financial Statements

Walmart Inc.

Condensed Consolidated Statements of Income

(Unaudited)

	Three Months Ended July 31,				Six Months Ended July 31,
(Amounts in millions, except per share data)	2021		2020		2021		2020
Revenues:
Net sales	$	139,871	$	136,824	$	277,030	$	270,496
Membership and other income	1,177		918		2,328		1,868
Total revenues	141,048		137,742		279,358		272,364
Costs and expenses:
Cost of sales	105,183		102,689		208,455		204,715
Operating, selling, general and administrative expenses	28,511		28,994		56,640		56,366
Operating income	7,354		6,059		14,263		11,283
Interest:
Debt	437		577		918		1,087
Finance lease	78		81		163		163
Interest income	(37)		(23)		(67)		(66)
Interest, net	478		635		1,014		1,184
Other (gains) and losses	953		(3,222)		3,482		(3,943)
Income before income taxes	5,923		8,646		9,767		14,042
Provision for income taxes	1,559		2,207		2,592		3,529
Consolidated net income	4,364		6,439		7,175		10,513
Consolidated net (income) loss attributable to noncontrolling interest	(88)		37		(169)		(47)
Consolidated net income attributable to Walmart	$	4,276	$	6,476	$	7,006	$	10,466
Net income per common share:
Basic net income per common share attributable to Walmart	$	1.53	$	2.29	$	2.50	$	3.70
Diluted net income per common share attributable to Walmart	1.52		2.27		2.48		3.67
Weighted-average common shares outstanding:
Basic	2,799		2,832		2,807		2,832
Diluted	2,812		2,848		2,820		2,848
Dividends declared per common share	$	—	$	—	$	2.20	$	2.16

See accompanying notes.

3

Walmart Inc.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

	Three Months Ended July 31,				Six Months Ended July 31,
(Amounts in millions)	2021		2020		2021		2020
Consolidated net income	$	4,364	$	6,439	$	7,175	$	10,513
Consolidated net (income) loss attributable to noncontrolling interest	(88)		37		(169)		(47)
Consolidated net income attributable to Walmart	4,276		6,476		7,006		10,466
Other comprehensive income (loss), net of income taxes
Currency translation and other	201		298		3,160		(3,670)
Net investment hedges	—		(191)		(1,202)		(34)
Cash flow hedges	(155)		313		(135)		34
Minimum pension liability	2		16		1,971		31
Other comprehensive income (loss), net of income taxes	48		436		3,794		(3,639)
Other comprehensive (income) loss attributable to noncontrolling interest	(78)		(52)		(4)		660
Other comprehensive income (loss) attributable to Walmart	(30)		384		3,790		(2,979)
Comprehensive income, net of income taxes	4,412		6,875		10,969		6,874
Comprehensive (income) loss attributable to noncontrolling interest	(166)		(15)		(173)		613
Comprehensive income attributable to Walmart	$	4,246	$	6,860	$	10,796	$	7,487

See accompanying notes.

4

Walmart Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

	July 31,		January 31,		July 31,
(Amounts in millions)	2021		2021		2020
ASSETS
Current assets:
Cash and cash equivalents	$	22,831	$	17,741	$	16,906
Receivables, net	6,103		6,516		5,111
Inventories	47,754		44,949		41,084
Prepaid expenses and other	1,555		20,861		1,895
Total current assets	78,243		90,067		64,996
Property and equipment, net	91,621		92,201		101,182
Operating lease right-of-use assets	13,868		13,642		16,869
Finance lease right-of-use assets, net	4,109		4,005		4,843
Goodwill	29,159		28,983		29,542
Other long-term assets	21,552		23,598		19,950
Total assets	$	238,552	$	252,496	$	237,382
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings	$	671	$	224	$	357
Accounts payable	49,601		49,141		46,326
Dividends payable	3,109		—		3,060
Accrued liabilities	23,915		37,966		23,768
Accrued income taxes	267		242		610
Long-term debt due within one year	1,617		3,115		5,553
Operating lease obligations due within one year	1,441		1,466		1,734
Finance lease obligations due within one year	501		491		549
Total current liabilities	81,122		92,645		81,957
Long-term debt	39,581		41,194		40,959
Long-term operating lease obligations	13,116		12,909		15,669
Long-term finance lease obligations	3,952		3,847		4,673
Deferred income taxes and other	13,654		14,370		12,927
Commitments and contingencies
Equity:
Common stock	278		282		283
Capital in excess of par value	3,655		3,646		3,197
Retained earnings	84,572		88,763		87,614
Accumulated other comprehensive loss	(7,976)		(11,766)		(15,784)
Total Walmart shareholders' equity	80,529		80,925		75,310
Noncontrolling interest	6,598		6,606		5,887
Total equity	87,127		87,531		81,197
Total liabilities and equity	$	238,552	$	252,496	$	237,382

See accompanying notes.

5

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, 2021	2,821	$	282	$	3,646	$	88,763	$	(11,766)	$	80,925	$	6,606	$	87,531
Consolidated net income	—	—		—		2,730		—		2,730		81		2,811
Other comprehensive income (loss), net of income taxes	—	—		—		—		3,820		3,820		(74)		3,746
Dividends declared ($2.20 per share)	—	—		—		(6,200)		—		(6,200)		—		(6,200)
Purchase of Company stock	(21)	(2)		(112)		(2,718)		—		(2,832)		—		(2,832)
Dividends declared to noncontrolling interest	—	—		—		—		—		—		(408)		(408)
Other	5	—		(110)		2		—		(108)		52		(56)
Balances as of April 30, 2021	2,805	$	280	$	3,424	$	82,577	$	(7,946)	$	78,335	$	6,257	$	84,592
Consolidated net income	—	—		—		4,276		—		4,276		88		4,364
Other comprehensive income (loss), net of income taxes	—	—		—		—		(30)		(30)		78		48
Purchase of Company stock	(17)	(2)		(94)		(2,273)		—		(2,369)		—		(2,369)
Dividends to noncontrolling interest	—	—		—		—		—		—		(10)		(10)
Other	3	—		325		(8)		—		317		185		502
Balances as of July 31, 2021	2,791	$	278	$	3,655	$	84,572	$	(7,976)	$	80,529	$	6,598	$	87,127

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
Consolidated net income	—	—		—		6,476		—		6,476		(37)		6,439
Other comprehensive income, net of income taxes	—	—		—		—		384		384		52		436
Dividends to noncontrolling interest	—	—		—		—		—		—		(3)		(3)
Other	2	(1)		214		(3)		—		210		5		215
Balances as of July 31, 2020	2,834	$	283	$	3,197	$	87,614	$	(15,784)	$	75,310	$	5,887	$	81,197

See accompanying notes.

6

Walmart Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Six Months Ended July 31,
(Amounts in millions)	2021		2020
Cash flows from operating activities:
Consolidated net income	$	7,175	$	10,513
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Depreciation and amortization	5,302		5,562
Net unrealized and realized (gains) and losses	3,019		(4,006)
Losses on disposal of business operations	433		37
Deferred income taxes	(385)		472
Other operating activities	606		305
Changes in certain assets and liabilities, net of effects of acquisitions and dispositions:
Receivables, net	452		823
Inventories	(2,725)		2,466
Accounts payable	119		1,052
Accrued liabilities	(1,412)		1,428
Accrued income taxes	(161)		304
Net cash provided by operating activities	12,423		18,956
Cash flows from investing activities:
Payments for property and equipment	(5,019)		(3,569)
Proceeds from the disposal of property and equipment	176		83
Proceeds from disposal of certain operations, net of divested cash	7,935		—
Payments for business acquisitions, net of cash acquired	(248)		(175)
Other investing activities	(442)		27
Net cash provided by (used in) investing activities	2,402		(3,634)
Cash flows from financing activities:
Net change in short-term borrowings	441		(178)
Repayments of long-term debt	(3,010)		(2,937)
Dividends paid	(3,091)		(3,058)
Purchase of Company stock	(5,200)		(723)
Dividends paid to noncontrolling interest	(14)		(66)
Other financing activities	(685)		(852)
Net cash used in financing activities	(11,559)		(7,814)
Effect of exchange rates on cash, cash equivalents and restricted cash	(21)		(69)
Net increase in cash, cash equivalents and restricted cash	3,245		7,439
Change in cash and cash equivalents classified as held for sale	1,848		—
Cash, cash equivalents and restricted cash at beginning of year	17,788		9,515
Cash, cash equivalents and restricted cash at end of period	$	22,881	$	16,954

See accompanying notes.

7

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, 2021 ("fiscal 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 based on a calendar year. In July 2021, the Company's majority-owned Flipkart subsidiary completed a $3.6 billion new equity funding, a portion of which was contributed by the Company. This transaction reduced the Company's ownership of Flipkart to approximately 75% in the third quarter of fiscal 2022.

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 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.

Investments

Investments in equity and debt securities are recorded in other long-term assets in the 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 Note 5 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 Condensed Consolidated Statements of 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 July 31, 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 July 31, 2021 and January 31, 2021, the Company had $0.8 billion and $0.6 billion, respectively, of certain legal and tax indemnification liabilities recorded within deferred income taxes and other in the Condensed Consolidated Balance Sheets. The maximum amount of potential future payments under these indemnities was $3.6 billion, based on exchange rates as of July 31, 2021.

8

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 and six months ended July 31, 2021 and 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 July 31,				Six Months Ended July 31,
(Amounts in millions, except per share data)	2021		2020		2021		2020
Numerator
Consolidated net income	$	4,364	$	6,439	$	7,175	$	10,513
Consolidated net (income) loss attributable to noncontrolling interest	(88)		37		(169)		(47)
Consolidated net income attributable to Walmart	$	4,276	$	6,476	$	7,006	$	10,466
Denominator
Weighted-average common shares outstanding, basic	2,799		2,832		2,807		2,832
Dilutive impact of share-based awards	13		16		13		16
Weighted-average common shares outstanding, diluted	2,812		2,848		2,820		2,848
Net income per common share attributable to Walmart
Basic	$	1.53	$	2.29	$	2.50	$	3.70
Diluted	1.52		2.27		2.48		3.67

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 tables provide the changes in the composition of total accumulated other comprehensive loss for the three months ended April 30, 2021 and July 31, 2021, respectively, as well as for the three months ended April 30, 2020 and July 31, 2020, respectively:

(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	—		—		16		4		20
Balances as of April 30, 2021	$	(7,739)	$	94	$	(284)	$	(17)	$	(7,946)
Other comprehensive income (loss) before reclassifications, net	123		—		(193)		(3)		(73)
Reclassifications to income, net	—		—		38		5		43
Balances as of July 31, 2021	$	(7,616)	$	94	$	(439)	$	(15)	$	(7,976)

(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.

(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)
Other comprehensive income (loss) before reclassifications, net	246		(191)		303		(2)		356
Reclassifications to income, net	—		—		10		18		28
Balances as of July 31, 2020	$	(14,837)	$	1,483	$	(505)	$	(1,925)	$	(15,784)

9

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 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 July 31, 2021 and January 31, 2021, all undrawn.

The following table provides the changes in the Company's long-term debt for the six months ended July 31, 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	(3,010)		—		(3,010)
Reclassifications of long-term debt	1,511		(1,511)		—
Other	1		(102)		(101)
Balances as of July 31, 2021	$	1,617	$	39,581	$	41,198

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.

As described in Note 1, the Company measures the fair value of certain equity investments on a recurring basis in the accompanying Condensed Consolidated Balance Sheets. The fair value of the Company's equity investments measured on a recurring basis is as follows:

(Amounts in millions)	Fair Value as of July 31, 2021		Fair Value as of January 31, 2021
Equity investments measured using Level 1 inputs	$	5,567	$	6,517
Equity investments measured using Level 2 inputs	5,730		7,905
Total	$	11,297	$	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 July 31, 2021 and January 31, 2021, the notional amounts and fair values of these derivatives were as follows:

	July 31, 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	$	133	(1)	$	3,250	$	166	(1)
Receive fixed-rate, pay fixed-rate cross-currency swaps designated as net investment hedges	—		—			1,250		311		(1)
Receive fixed-rate, pay fixed-rate cross-currency swaps designated as cash flow hedges	8,243		(616)		(2)	5,073		(394)		(2)
Total	$