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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
wmt-20210731_g1.jpg
WALMART INC.
(Exact name of registrant as specified in its charter)
Delaware71-0415188
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
702 S.W. 8th Street72716
BentonvilleAR
(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 classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.10 per shareWMTNew York Stock Exchange
1.900% Notes Due 2022WMT22New York Stock Exchange
2.550% Notes Due 2026WMT26New 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.


Table of Contents
Walmart Inc.
Form 10-Q
For the Quarterly Period Ended July 31, 2021



Table of Contents
Page


2

Table of Contents
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)2021202020212020
Revenues:
Net sales$139,871 $136,824 $277,030 $270,496 
Membership and other income1,177 918 2,328 1,868 
Total revenues141,048 137,742 279,358 272,364 
Costs and expenses:
Cost of sales105,183 102,689 208,455 204,715 
Operating, selling, general and administrative expenses28,511 28,994 56,640 56,366 
Operating income7,354 6,059 14,263 11,283 
Interest:
Debt437 577 918 1,087 
Finance lease78 81 163 163 
Interest income(37)(23)(67)(66)
Interest, net478 635 1,014 1,184 
Other (gains) and losses953 (3,222)3,482 (3,943)
Income before income taxes5,923 8,646 9,767 14,042 
Provision for income taxes1,559 2,207 2,592 3,529 
Consolidated net income4,364 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 $3.70 
Diluted net income per common share attributable to Walmart1.52 2.27 2.48 3.67 
Weighted-average common shares outstanding:
Basic2,799 2,832 2,807 2,832 
Diluted2,812 2,848 2,820 2,848 
Dividends declared per common share$ $ $2.20 $2.16 
See accompanying notes.
3

Table of Contents
Walmart Inc.
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
 Three Months Ended July 31,Six Months Ended July 31,
(Amounts in millions)2021202020212020
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 Walmart4,276 6,476 7,006 10,466 
Other comprehensive income (loss), net of income taxes
Currency translation and other201 298 3,160 (3,670)
Net investment hedges (191)(1,202)(34)
Cash flow hedges(155)313 (135)34 
Minimum pension liability2 16 1,971 31 
Other comprehensive income (loss), net of income taxes48 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 taxes4,412 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.
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Walmart Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
July 31,January 31,July 31,
(Amounts in millions)202120212020
ASSETS
Current assets:
Cash and cash equivalents$22,831 $17,741 $16,906 
Receivables, net6,103 6,516 5,111 
Inventories47,754 44,949 41,084 
Prepaid expenses and other1,555 20,861 1,895 
Total current assets78,243 90,067 64,996 
Property and equipment, net91,621 92,201 101,182 
Operating lease right-of-use assets13,868 13,642 16,869 
Finance lease right-of-use assets, net4,109 4,005 4,843 
Goodwill29,159 28,983 29,542 
Other long-term assets21,552 23,598 19,950 
Total assets$238,552 $252,496 $237,382 
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings$671 $224 $357 
Accounts payable49,601 49,141 46,326 
Dividends payable3,109  3,060 
Accrued liabilities23,915 37,966 23,768 
Accrued income taxes267 242 610 
Long-term debt due within one year1,617 3,115 5,553 
Operating lease obligations due within one year1,441 1,466 1,734 
Finance lease obligations due within one year501 491 549 
Total current liabilities81,122 92,645 81,957 
Long-term debt39,581 41,194 40,959 
Long-term operating lease obligations13,116 12,909 15,669 
Long-term finance lease obligations3,952 3,847 4,673 
Deferred income taxes and other13,654 14,370 12,927 
Commitments and contingencies
Equity:
Common stock278 282 283 
Capital in excess of par value3,655 3,646 3,197 
Retained earnings84,572 88,763 87,614 
Accumulated other comprehensive loss(7,976)(11,766)(15,784)
Total Walmart shareholders' equity80,529 80,925 75,310 
Noncontrolling interest6,598 6,606 5,887 
Total equity87,127 87,531 81,197 
Total liabilities and equity$238,552 $252,496 $237,382 
See accompanying notes.
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Walmart Inc.
Condensed Consolidated Statements of Shareholders' Equity
(Unaudited)
AccumulatedTotal
Capital inOtherWalmart
(Amounts in millions)Common StockExcess ofRetainedComprehensiveShareholders'NoncontrollingTotal
SharesAmountPar ValueEarningsLossEquityInterestEquity
Balances as of February 1, 20212,821 $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)
Other5 — (110)2 — (108)52 (56)
Balances as of April 30, 20212,805 $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)
Other3 — 325 (8)— 317 185 502 
Balances as of July 31, 20212,791 $278 $3,655 $84,572 $(7,976)$80,529 $6,598 $87,127 
See accompanying notes.
AccumulatedTotal
Capital inOtherWalmart
(Amounts in millions)Common StockExcess ofRetainedComprehensiveShareholders'NoncontrollingTotal
SharesAmountPar ValueEarningsLossEquityInterestEquity
Balances as of February 1, 20202,832 $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)
Other6 1 (238)(9)— (246)(26)(272)
Balances as of April 30, 20202,832 $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)
Other2 (1)214 (3)— 210 5 215 
Balances as of July 31, 20202,834 $283 $3,197 $87,614 $(15,784)$75,310 $5,887 $81,197 
See accompanying notes.


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Walmart Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Six Months Ended July 31,
(Amounts in millions)20212020
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 amortization5,302 5,562 
Net unrealized and realized (gains) and losses3,019 (4,006)
Losses on disposal of business operations433 37 
Deferred income taxes(385)472 
Other operating activities606 305 
Changes in certain assets and liabilities, net of effects of acquisitions and dispositions:
Receivables, net452 823 
Inventories(2,725)2,466 
Accounts payable119 1,052 
Accrued liabilities(1,412)1,428 
Accrued income taxes(161)304 
Net cash provided by operating activities12,423 18,956 
Cash flows from investing activities:
Payments for property and equipment(5,019)(3,569)
Proceeds from the disposal of property and equipment176 83 
Proceeds from disposal of certain operations, net of divested cash7,935  
Payments for business acquisitions, net of cash acquired(248)(175)
Other investing activities(442)27 
Net cash provided by (used in) investing activities2,402 (3,634)
Cash flows from financing activities:
Net change in short-term borrowings441 (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 cash3,245 7,439 
Change in cash and cash equivalents classified as held for sale1,848  
Cash, cash equivalents and restricted cash at beginning of year17,788 9,515 
Cash, cash equivalents and restricted cash at end of period$22,881 $16,954 
See accompanying notes.
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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.
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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)2021202020212020
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, basic2,799 2,832 2,807 2,832 
Dilutive impact of share-based awards13 16 13 16 
Weighted-average common shares outstanding, diluted2,812 2,848 2,820 2,848 
Net income per common share attributable to Walmart
Basic$1.53 $2.29 $2.50 $3.70 
Diluted1.52 2.27 2.48 3.67 
Note 3. Accumulated Other Comprehensive Loss
Amounts reclassified from accumulated other comprehensive loss for derivative instruments are generally recorded in interest, net, in the Company's Condensed Consolidated Statements of Income. Amounts for the minimum pension liability, as well as the cumulative translation and any related net investment hedge impacts resulting from a disposition of a business, are recorded in other gains and losses in the Company's Condensed Consolidated Statements of Income. The following tables provide the changes in the composition of total accumulated other comprehensive loss for the three months ended April 30, 2021 and July 31, 2021, respectively, as well as for the three months ended April 30, 2020 and July 31, 2020, respectively:
(Amounts in millions and net of immaterial income taxes)Currency 
Translation and Other
Net Investment HedgesCash Flow HedgesMinimum
Pension 
Liability
Total
Balances as of February 1, 2021$(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)$(7,946)
Other comprehensive income (loss) before reclassifications, net123  (193)(3)(73)
Reclassifications to income, net  38 5 43 
Balances as of July 31, 2021$(7,616)$94 $(439)$(15)$(7,976)
(1) Upon closing of the sale of the Company's operations in the U.K. and Japan during the first quarter of fiscal 2022, these amounts were released from accumulated other comprehensive loss, the majority of which was considered in the impairment evaluation when the individual disposal groups met the held for sale classification in fiscal 2021.
(Amounts in millions and net of immaterial income taxes)Currency 
Translation and Other
Net Investment HedgesCash Flow HedgesMinimum
Pension 
Liability
Total
Balances as of February 1, 2020$(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)$(16,168)
Other comprehensive income (loss) before reclassifications, net246 (191)303 (2)356 
Reclassifications to income, net  10 18 28 
Balances as of July 31, 2020$(14,837)$1,483 $(505)$(1,925)$(15,784)

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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 yearLong-term debtTotal
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 debt1,511 (1,511) 
Other1 (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, 2021Fair Value as of January 31, 2021
Equity investments measured using Level 1 inputs$5,567 $6,517 
Equity investments measured using Level 2 inputs5,730 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, 2021January 31, 2021
(Amounts in millions)Notional AmountFair ValueNotional AmountFair 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 hedges8,243 (616)
(2)
5,073 (394)
(2)
Total$11,493 $(483)$9,573 $83 
(1)Classified in other long-term assets within the Company's Condensed Consolidated Balance Sheets.
(2)Classified primarily in deferred income taxes and other within the Company's Condensed Consolidated Balance Sheets.
Nonrecurring Fair Value Measurements
In addition to assets and liabilities 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.
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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 in the first quarter of fiscal 2022 within other gains and losses in the Condensed Consolidated Statements of Income. Refer to Note 6. The Company did not have other material assets or liabilities resulting in nonrecurring fair value measurements as of July 31, 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.
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 July 31, 2021 and January 31, 2021, are as follows: 
 July 31, 2021January 31, 2021
(Amounts in millions)Carrying ValueFair ValueCarrying ValueFair Value
Long-term debt, including amounts due within one year$41,198 $50,373 $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 $87.8 billion as of July 31, 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.
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Opioids Litigation
In December 2017, the 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 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. The Company has appealed this decision to the fifth circuit and awaits the court's 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 two 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 two 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.
Asda 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.
Note 8. Segments and Disaggregated Revenue
Segments
The Company is engaged in the operation of retail, wholesale, eCommerce websites and other units located throughout the U.S., Africa, Canada, Central America, Chile, China, India and Mexico. The Company's operations are conducted in three 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.
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.
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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.
Net sales by segment are as follows:
 Three Months Ended July 31,Six Months Ended July 31,
(Amounts in millions)
2021202020212020
Net sales:
Walmart U.S.$98,192 $93,282 $191,359 $182,025 
Walmart International23,035 27,167 50,335 56,933 
Sam's Club18,644 16,375 35,336 31,538 
Net sales$139,871 $136,824 $277,030 $270,496 
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 July 31,Six Months Ended July 31,
(Amounts in millions)
2021202020212020
Operating income (loss):
Walmart U.S.$6,089 $5,057 $11,544 $9,359 
Walmart International861 812 2,055 1,618 
Sam's Club660 592 1,235 1,086 
Corporate and support(256)(402)(571)(780)
Operating income7,354 6,059 14,263 11,283 
Interest, net478 635 1,014 1,184 
Other (gains) and losses953 (3,222)3,482 (3,943)
Income before income taxes$5,923 $8,646 $9,767 $14,042 
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 July 31,Six Months Ended July 31,
Walmart U.S. net sales by merchandise category2021202020212020
Grocery$54,649 $51,545 $106,040 $104,466 
General merchandise31,707 31,682 62,314 57,148 
Health and wellness10,480 9,154 20,450 18,754 
Other categories1,356 901 2,555 1,657 
Total$98,192 $93,282 $191,359 $182,025 
Of Walmart U.S.'s total net sales, approximately $11.2 billion and $10.5 billion related to eCommerce for the three months ended July 31, 2021 and 2020, respectively, and approximately $22.5 billion and $18.8 billion related to eCommerce for the six months ended July 31, 2021 and 2020, respectively.
(Amounts in millions)Three Months Ended July 31,Six Months Ended July 31,
Walmart International net sales by market2021202020212020
Mexico and Central America$8,658 $7,208 $16,988 $15,704 
United Kingdom 6,698 3,811 13,830 
Canada5,492 5,127 10,340 9,413 
China3,001 2,579 6,774 5,947 
Other5,884 5,555 12,422 12,039 
Total$23,035 $27,167 $50,335 $56,933 
Of Walmart International's total net sales, approximately $4.1 billion and $3.3 billion related to eCommerce for the three months ended July 31, 2021 and 2020, respectively, and approximately $8.4 billion and $6.2 billion related to eCommerce for the six months ended July 31, 2021 and 2020, respectively.
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(Amounts in millions)Three Months Ended July 31,Six Months Ended July 31,
Sam’s Club net sales by merchandise category2021202020212020
Grocery and consumables$12,014 $10,715 $22,683 $21,076 
Fuel, tobacco and other categories2,816 2,068 5,115 4,081 
Home and apparel2,194 1,953 4,276 3,233 
Health and wellness956 931 1,897 1,832 
Technology, office and entertainment664 708 1,365 1,316 
Total$18,644 $16,375 $35,336 $31,538 
Of Sam's Club's total net sales, approximately $1.6 billion and $1.3 billion related to eCommerce for the three months ended July 31, 2021 and 2020, respectively, and approximately $3.2 billion and $2.3 billion related to eCommerce for the six months ended July 31, 2021 and 2020, respectively.

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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, 2022 ("fiscal 2022") and the fiscal year ended January 31, 2021 ("fiscal 2021"), should be read in conjunction with our Condensed Consolidated Financial Statements as of and for the three and six months ended July 31, 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, 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, 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, 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. 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. 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 six months ended July 31, 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 first quarter of fiscal 2022, 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 first quarter of fiscal 2022, 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.
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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, weather and other risks related to climate change, global health epidemics, including the ongoing COVID-19 pandemic, 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."
We expect continued uncertainty in our business and the global economy due to the duration and intensity of the COVID–19 pandemic; the duration and extent of economic stimulus; timing and effectiveness of global vaccines; and volatility in employment trends and consumer confidence which may impact our results. For a detailed discussion on results of operations by reportable segment, refer to "Results of Operations" below.

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.
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, which may result in differences when compared to comparable sales using the retail calendar.
Calendar comparable sales, as well as the impact of fuel, for the three and six months ended July 31, 2021 and 2020, were as follows:
 Three Months Ended July 31,Six Months Ended July 31,
 20212020202120202021202020212020
 With FuelFuel ImpactWith FuelFuel Impact
Walmart U.S.5.4 %9.7 %0.4 %(0.2)%5.4 %10.1 %0.4 %(0.3)%
Sam's Club13.9 %8.8 %6.2 %(4.7)%12.0 %9.2 %5.0 %(4.0)%
Total U.S.6.7 %9.6 %1.3 %(0.8)%6.4 %10.0 %1.1 %(0.7)%
Comparable sales in the U.S., including fuel, increased 6.7% and 6.4% for the three and six months ended July 31, 2021, respectively, when compared to the same period in the previous fiscal year. The Walmart U.S. segment had comparable sales growth of 5.4% for the three and six months ended July 31, 2021, driven by growth in average ticket during the first quarter of fiscal 2022 primarily aided by stimulus spending while transactions decreased as customers consolidated shopping trips and purchased larger baskets. Transaction growth turned positive in April 2021 and continued with strong growth in the second quarter of fiscal 2022 as customers started to return to pre-pandemic behaviors, partially offset by a decline in average ticket through the second quarter. The Walmart U.S. segment's eCommerce sales positively contributed approximately 0.3% and 1.9% to comparable sales for the three and six months ended July 31, 2021, respectively, and was primarily driven by store pickup and delivery.
Comparable sales at the Sam's Club segment increased 13.9% and 12.0% for the three and six months ended July 31, 2021, respectively. Growth in comparable sales benefited from growth in transactions and average ticket and was aided by stimulus
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spending. The growth in comparable sales was partially offset by our decision to remove tobacco from certain club locations. The Sam's Club segment's eCommerce sales positively contributed approximately 1.1% and 1.9% to comparable sales for the three and six months ended July 31, 2021, respectively.
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 July 31,Six Months Ended July 31,
(Amounts in millions)2021202020212020
Net sales$139,871 $136,824 $277,030 $270,496 
Percentage change from comparable period2.2 %5.7 %2.4 %7.2 %
Operating, selling, general and administrative expenses$28,511 $28,994 $56,640 $56,366 
Percentage change from comparable period(1.7)%7.9 %0.5 %6.7 %
Operating, selling, general and administrative expenses as a percentage of net sales20.4 %21.2 %20.4 %20.8 %
Operating expenses as a percentage of net sales decreased 81 and 39 basis points for the three and six months ended July 31, 2021, respectively, when compared to the same periods in the previous fiscal year. These decreases were primarily driven by growth in net sales, lower incremental COVID-19 related costs of $1.2 billion and $1.7 billion as compared to the three and six months ended July 31, 2020, respectively, and lapping a $0.4 billion business restructuring charge in the Walmart U.S. segment recorded in the second quarter of fiscal 2021. Operating expenses as a percentage of net sales also benefited from depreciation and amortization expense not having been recorded for our operations in the U.K. and Japan subsequent to their held for sale classification at the end of fiscal 2021 and prior to closing during the first quarter of fiscal 2022. These decreases were partially offset by increased wage investments in the Walmart U.S. segment.
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. As such, we are allocating more capital to supply chain, customer-facing initiatives, technology and store remodels, and less to new store and club openings. The following table provides additional detail:
(Amounts in millions)Six Months Ended July 31,
Allocation of Capital Expenditures20212020
Supply chain, customer-facing initiatives and technology$2,454 $1,814 
Store and club remodels1,446 822 
New stores and clubs, including expansions and relocations73 43 
Total U.S.3,973 2,679 
Walmart International1,046 890 
Total Capital Expenditures$5,019 $3,569 

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 4.4% and 7.7% for the trailing twelve months ended July 31, 2021 and 2020, respectively. The decrease in ROA was primarily due to the losses on divestiture of our operations in the U.K., Japan and Argentina as well as net fair value changes in our equity instruments, partially offset by the increase in operating income. ROI was 14.8% and 13.5% for the trailing twelve months ended July 31, 2021 and 2020. The increase in ROI was primarily due to the increase in operating income.
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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 amortization, less average accounts payable and average accrued liabilities for that period.
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 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.
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 July 31,
(Amounts in millions)20212020
CALCULATION OF RETURN ON ASSETS
Numerator
Consolidated net income$10,368 $18,128 
Denominator
Average total assets(1)
$237,967 $236,122 
Return on assets (ROA)4.4 %7.7 %
CALCULATION OF RETURN ON INVESTMENT
Numerator
Operating income$25,528 $21,323 
+ Interest income122 151 
+ Depreciation and amortization10,892 11,113 
+ Rent2,451 2,679 
= ROI operating income$38,993 $35,266 
Denominator
Average total assets(1)
$237,967 $236,122 
'+ Average accumulated depreciation and amortization(1)
97,685 93,418 
'- Average accounts payable(1)
47,964 46,099 
 - Average accrued liabilities(1)
23,842 22,230 
= Average invested capital$263,846 $261,211 
Return on investment (ROI)14.8 %13.5 %
 (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 prior period and dividing by 2.
 As of July 31,
 202120202019
Certain Balance Sheet Data
Total assets$238,552 $237,382 $234,861 
Accumulated depreciation and amortization98,346 97,023 89,813 
Accounts payable49,601 46,326 45,871 
Accrued liabilities23,915 23,768 20,691 
 




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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 $12.4 billion for the six months ended July 31, 2021, which decreased when compared to $19.0 billion for the six months ended July 31, 2020 primarily due to an increase in inventory purchases due in part to lapping the impact of accelerated inventory sell-through in the first half of fiscal 2021. We generated free cash flow of $7.4 billion for the six months ended July 31, 2021, which decreased when compared to $15.4 billion for the six months ended July 31, 2020 due to the same reasons as the decrease in net cash provided by operating activities, as well as $1.5 billion in increased capital 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.
 Six Months Ended July 31,
(Amounts in millions)20212020
Net cash provided by operating activities$12,423 $18,956 
Payments for property and equipment(5,019)(3,569)
Free cash flow$7,404 $15,387 
Net cash provided by (used in) investing activities(1)
$2,402 $(3,634)
Net cash (used in) provided by financing activities(11,559)(7,814)
(1) "Net cash provided by (used in) investing activities" includes payments for property and equipment, which is also included in our computation of free cash flow.
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Results of Operations
Consolidated Results of Operations
Three Months Ended July 31,Six Months Ended July 31,
(Amounts in millions, except unit counts)2021202020212020
Total revenues$141,048 $137,742 $279,358 $272,364 
Percentage change from comparable period2.4%5.6%2.6 %7.1%
Net sales$139,871 $136,824 $277,030 $270,496 
Percentage change from comparable period2.2%5.7%2.4 %7.2%
Total U.S. calendar comparable sales increase6.7%9.6%6.4 %10.0%
Gross profit margin as a percentage of net sales24.8%24.9%24.8 %24.3%
Operating income$7,354 $6,059 $14,263 $11,283 
Operating income as a percentage of net sales5.3%4.4%5.1 %4.2%
Other (gains) and losses$953 $(3,222)$3,482 $(3,943)
Consolidated net income$4,364 $6,439 $7,175 $10,513 
Unit counts at period end10,524 11,496 10,524 11,496 
Retail square feet at period end1,063 1,127 1,063 1,127 
Our total revenues, which are mostly comprised of net sales, but also include membership and other income, increased $3.3 billion or 2.4% and $7.0 billion or 2.6% for the three and six months ended July 31, 2021, respectively, when compared to the same periods in the previous fiscal year. The increases in revenues were primarily due to strong positive comparable sales for the Walmart U.S. and Sam's Club segments which benefited from consumer stimulus dollars in the U.S., along with positive comparable sales in several of our remaining international markets. These increases were partially offset by net sales decreases of $8.9 billion and $13.1 billion for the three and six months ended July 31, 2021, respectively, 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 $2.4 billion and $3.3 billion positive impact of fluctuations in currency exchange rates for the three and six months ended July 31, 2021, respectively.
Gross profit as a percentage of net sales ("gross profit rate") decreased 15 basis points for the three months ended July 31, 2021 when compared to the same period in the previous fiscal year, primarily due to category mix shifts in the Sam's Club segment, increased supply chain costs in the Walmart U.S. segment and format mix shifts in the Walmart International segment. These decreases were partially offset by benefits in the Walmart U.S. segment related to administering COVID-19 vaccines, lapping the temporary COVID-19 related closure of our Auto Care Centers and Vision Centers in the previous year, lower markdowns and growth in our advertising business.
Gross profit rate increased 43 basis points for the six months ended July 31, 2021 when compared to the same period in the previous fiscal year. The decrease for the three months ended July 31, 2021 was more than offset by increases in the first quarter of fiscal 2022 primarily driven by mix shifts into general merchandise in the Walmart U.S. segment, due in part to stimulus, lower markdowns and lapping last year's COVID-19 related mix shifts into lower margin categories such as food and consumables.
Operating expenses as a percentage of net sales decreased 81 and 39 basis points for the three and six months ended July 31, 2021, respectively, when compared to the same periods in the previous fiscal year. These decreases were primarily driven by growth in net sales, lower incremental COVID-19 related costs of $1.2 billion and $1.7 billion as compared to the three and six months ended July 31, 2020, respectively, and lapping a $0.4 billion business restructuring charge in the Walmart U.S. segment recorded in the second quarter of fiscal 2021. Operating expenses as a percentage of net sales also benefited from depreciation and amortization expense not having been recorded for our operations in the U.K. and Japan subsequent to their held for sale classification at the end of fiscal 2021 and prior to closing during the first quarter of fiscal 2022. These decreases were partially offset by increased wage investments in the Walmart U.S. segment.
Other gains and losses for the three months ended July 31, 2021 consisted of a net loss of $1.0 billion which primarily reflects $0.9 billion in net losses associated with the fair value changes of our equity investments. Other gains and losses for the six months ended July 31, 2021 consisted of a net loss of $3.5 billion which primarily reflects $3.0 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 and six months ended July 31, 2020, other gains and losses consisted of a gain of $3.2 billion and $3.9 billion, respectively, primarily representing the fair value changes of our equity investments.
Our effective income tax rate was 26.3% and 26.5% for the three and six months ended July 31, 2021, respectively, compared to 25.5% and 25.1% for the same periods in the previous fiscal year. 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.
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As a result of the factors discussed above, consolidated net income decreased $2.1 billion and $3.3 billion for the three and six months ended July 31, 2021 respectively, when compared to the same periods in the previous fiscal year. Accordingly, diluted net income per common share attributable to Walmart was $1.52 and $2.48 for the three and six months ended July 31, 2021, respectively, which represents respective decreases of $0.75 and $1.19, when compared to the same periods in the previous fiscal year.

Walmart U.S. Segment
 Three Months Ended July 31,Six Months Ended July 31,
(Amounts in millions, except unit counts)2021202020212020
Net sales$98,192 $93,282 $191,359 $182,025 
Percentage change from comparable period5.3 %9.5 %5.1 %10.0 %
Calendar comparable sales increase5.4 %9.7 %5.4 %10.1 %
Operating income$6,089 $5,057 $11,544 $9,359 
Operating income as a percentage of net sales6.2 %5.4 %6.0 %5.1 %
Unit counts at period end4,740 4,754 4,740 4,754 
Retail square feet at period end703 703 703 703 
Net sales for the Walmart U.S. segment increased $4.9 billion or 5.3% and $9.3 billion or 5.1% for the three and six months ended July 31, 2021, respectively when compared to the same periods in the previous fiscal year. The increases were due to comparable sales of 5.4% for both the three and six months ended July 31, 2021, driven by growth in average ticket during the first quarter of fiscal 2022 primarily aided by stimulus spending while transactions decreased as customers consolidated shopping trips and purchased larger baskets. Transaction growth turned positive in April 2021 and continued with strong growth in the second quarter of fiscal 2022 as customers started to return to pre-pandemic behaviors, partially offset by a decline in average ticket through the second quarter. Walmart U.S. eCommerce sales positively contributed approximately 0.3% and 1.9% to comparable sales during the three and six months ended July 31, 2021, respectively, which was primarily driven by store pickup and delivery.
Gross profit rate increased 20 basis points for the three months ended July 31, 2021 when compared to the same period in the previous fiscal year, primarily driven by a benefit from administering COVID-19 vaccines, lapping last year's temporary COVID-19 related closure of our Auto Care Centers and Vision Centers, lower markdowns and growth in our advertising business, partially offset by increased supply chain costs. For the six months ended July 31, 2021, gross profit rate increased 80 basis points due primarily to shifts into general merchandise due in part to stimulus and lapping last year's COVID-related mix shifts into food and consumables in the first quarter of fiscal 2022. Gross profit rate was also impacted by lower markdowns, lapping the temporary closures of our Auto Care Centers and Vision centers, and a benefit from administering vaccines, partially offset by increased supply chain costs.
Operating expenses as a percentage of net sales decreased 49 basis points for the three months ended July 31, 2021 when compared to the same period in the previous fiscal year, primarily due to strong sales, $1.0 billion of lower incremental COVID-19 costs and lapping a $0.4 billion business restructuring charge in the second quarter of fiscal 2021. These decreases were partially offset by increased investments in wages, marketing, and technology. Despite the increase in net sales for the six months ended July 31, 2021, operating expenses as a percentage of net sales were relatively flat when compared to the same period in the previous fiscal year, primarily due to increased wage, technology and marketing investments in the first and second quarters of fiscal 2022, which were offset by $1.4 billion of lower incremental COVID-19 related costs and lapping the business restructuring charge.
As a result of the factors discussed above, operating income increased $1.0 billion and $2.2 billion for the three and six months ended July 31, 2021, respectively, when compared to the same period in the previous fiscal year.
Walmart International Segment
 Three Months Ended July 31,Six Months Ended July 31,
(Amounts in millions, except unit counts)2021202020212020
Net sales$23,035 $27,167 $50,335 $56,933 
Percentage change from comparable period(15.2)%(6.8)%(11.6)%(1.7)%
Operating income$861 $812 $2,055 $1,618 
Operating income as a percentage of net sales3.7 %3.0 %4.1 %2.8 %
Unit counts at period end5,185 6,143 5,185 6,143 
Retail square feet at period end280 344 280 344 
Net sales for the Walmart International segment decreased $4.1 billion or 15.2% and $6.6 billion or 11.6% for the three and six months ended July 31, 2021, respectively, when compared to the same periods in the previous fiscal year. The reduction in net
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sales was due to decreases of $8.9 billion and $13.1 billion for the three and six months ended July 31, 2021, respectively, primarily related to the divestiture of Asda and Seiyu during the first quarter of fiscal 2022. The decreases were partially offset by positive net sales growth in several of our remaining markets, which included a benefit from lapping tighter government-mandated restrictions in the prior comparable periods, primarily in India. Net sales for the three and six months ended July 31, 2021 included positive fluctuations in currency exchange rates of $2.4 billion and $3.3 billion, respectively.
Gross profit rate decreased 76 basis points for the three months ended July 31, 2021 when compared to the same period in the prior fiscal year, primarily driven by shifts into lower margin formats, partially offset by lower markdowns. The divested markets also negatively impacted our gross profit rate. Gross profit rate decreased 14 basis points for the six months ended July 31, 2021, when compared to the same period in the previous fiscal year primarily driven by shifts into lower margin formats and the decrease related to our divested markets, partially offset by benefits in the first quarter of fiscal 2022 related to mix shifts into higher margin categories and lower markdowns.
Operating expenses as a percentage of net sales decreased 85 basis points and 87 basis points for the three and six months ended July 31, 2021, respectively, when compared to the same periods in the previous fiscal year. For the three months ended July 31, 2021, the decrease was primarily due to lower incremental COVID-19 related costs as compared to the prior period and lapping a discrete tax charge in the prior comparable period. For the six months ended July 31, 2021, the decrease was primarily due to lower incremental COVID-19 related costs, depreciation and amortization expense not having been recorded for our operations in the U.K. and Japan subsequent to their held for sale classification at the end of fiscal 2021 and prior to closing during the first quarter of fiscal 2022, as well as lapping the discrete tax charge.
As a result of the factors discussed above, operating income increased $49 million and $437 million for the three and six months ended July 31, 2021, respectively, when compared to the same periods in the previous fiscal year.
Sam's Club Segment
 Three Months Ended July 31,Six Months Ended July 31,
(Amounts in millions, except unit counts)2021202020212020
Including Fuel
Net sales$18,644 $16,375 $35,336 $31,538 
Percentage change from comparable period13.9 %8.8 %12.0 %9.2 %
Calendar comparable sales increase13.9 %8.8 %12.0 %9.2 %
Operating income$660 $592 $1,235 $1,086 
Operating income as a percentage of net sales3.5 %3.6 %3.5 %3.4 %
Unit counts at period end599 599 599 599 
Retail square feet at period end80 80 80 80 
Excluding Fuel (1)
Net sales$16,437 $15,264 $31,374 $29,333 
Percentage change from comparable period7.7 %13.5 %7.0 %13.2 %
Operating income$575 $527 $1,105 $925 
Operating income as a percentage of net sales3.5 %3.5 %3.5 %3.2 %
(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 $2.3 billion or 13.9% and $3.8 billion or 12.0% for the three and six months ended July 31, 2021, respectively, when compared to the same periods in the previous fiscal year. The increases were primarily due to comparable sales, including fuel, of 13.9% and 12.0% for the three and six months ended, respectively. Growth in comparable sales benefited from growth in transactions 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. Sam's Club eCommerce net sales positively contributed approximately 1.1% and 1.9% to comparable sales for the three and six months ended July 31, 2021, respectively.
Gross profit rate decreased 88 and 47 basis points for the three and six months ended July 31, 2021, respectively, when compared to the same periods in the previous fiscal year. The gross profit rates were negatively impacted by increased fuel sales which have lower margins and cost inflation, partially offset by favorable changes in mix.
Membership and other income increased 13.1% and 12.3% for the three and six months ended July 31, 2021, respectively, when compared to the same periods in the previous fiscal year. The increases were due to increases in overall renewal rates, new member sign-ups and Plus penetration.
Operating expenses as a percentage of segment net sales decreased 82 and 52 basis points and for the three and six months ended July 31, 2021, respectively, when compared to the same periods in the previous fiscal year. The decreases were
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primarily the result of higher fuel sales as well as a benefit from lower incremental COVID-19 related costs, partially offset by increased wage investments and reduced tobacco sales when compared to the same period in the previous fiscal year.
As a result of the factors discussed above, operating income increased $0.1 billion for both the three and six months ended July 31, 2021 when compared to the same periods in the previous fiscal year.

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
Six Months Ended July 31,
(Amounts in millions)20212020
Net cash provided by operating activities$12,423 $18,956 
Net cash provided by operating activities was $12.4 billion and $19.0 billion for the six months ended July 31, 2021 and 2020, respectively. The decrease in cash provided by operating activities for the six months ended July 31, 2021 was primarily due to an increase in inventory purchases due in part to lapping the impact of accelerated inventory sell-through in the first half of fiscal 2021.
Cash Equivalents and Working Capital Deficit
Cash and cash equivalents were $22.8 billion and $16.9 billion at July 31, 2021 and 2020, respectively. Our working capital deficit was $2.9 billion as of July 31, 2021, which decreased when compared to $17.0 billion as of July 31, 2020, primarily driven by the increase in inventory described above as well as an increase in cash and cash equivalents. 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 July 31, 2021 and January 31, 2021, cash and cash equivalents of $3.0 billion and $2.8 billion, respectively, may not be freely transferable to the U.S. due to local laws or other restrictions. Of the $3.0 billion at July 31, 2021, approximately $1.0 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
 Six Months Ended July 31,
(Amounts in millions)20212020
Net cash provided by (used in) investing activities$2,402 $(3,634)
Net cash provided by investing activities was $2.4 billion as compared to net cash used in investing activities of $3.6 billion for the six months ended July 31, 2021 and 2020, respectively. Net cash provided by investing activities increased $6.0 billion for the six months ended July 31, 2021 primarily due to the net proceeds received from the divestitures of Asda and Seiyu, partially offset by increased capital expenditures.
Net Cash Used in Financing Activities
 Six Months Ended July 31,
(Amounts in millions)20212020
Net cash used in financing activities$(11,559)$(7,814)
Net cash from financing activities generally consists of transactions related to our short-term and long-term debt, dividends paid and the repurchase of the Company's common stock. Transactions with noncontrolling interest shareholders are also classified as cash flows from financing activities. Net cash used in financing activities was $11.6 billion as compared to $7.8 billion for the six months ended July 31, 2021 and 2020, respectively. The increase in net cash used in financing activities is primarily due to increased share repurchases.
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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, we had committed lines of credit in the U.S. of $15.0 billion at July 31, 2021, all undrawn.
In the third quarter of fiscal 2022, the Company's majority-owned Flipkart subsidiary completed a $3.6 billion new equity funding, a portion of which was contributed by the Company, which reduced the Company's ownership of Flipkart to approximately 75%.
Long-term Debt
The following table provides the changes in our long-term debt for the six months ended July 31, 2021:
(Amounts in millions)Long-term debt due within one yearLong-term debtTotal
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 debt1,511 (1,511)— 
Other(102)(101)
Balances as of July 31, 2021$1,617 $39,581 $41,198 
Dividends
Effective February 18, 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. For fiscal 2022, the annual dividend was or will be paid in four quarterly installments of $0.55 per share, according to the following record and payable dates:
Record Date  Payable Date
March 19, 2021  April 5, 2021
May 7, 2021  June 1, 2021
August 13, 2021  September 7, 2021
December 10, 2021  January 3, 2022
The dividend installments payable on April 5, 2021 and June 1, 2021 were paid as scheduled.
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 prior to February 22, 2021 were made under the 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 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 repurchase program. As of July 31, 2021, authorization for $15.2 billion of share repurchases remained under the 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. The following table provides, on a settlement date basis, share repurchase information for the six months ended July 31, 2021 and 2020:
Six Months Ended July 31,
(Amounts in millions, except per share data)20212020
Total number of shares repurchased37.7 6.3 
Average price paid per share$137.94 $114.73 
Total amount paid for share repurchases$5,200 $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.
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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 July 31, 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+  AA
Moody's Investors Service  P-1  Aa2
Fitch Ratings  F1+  AA
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 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 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 "Opioids Litigation ," 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 discuss various legal proceedings related to the Federal and 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, the Money Transfer Agent Services Proceedings matter and the Foreign Direct Investment matters in Part II of this Quarterly Report on Form 10-Q 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.
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 and the fair value of certain equity investments. Our market risks at July 31, 2021 are similar to those disclosed in our Annual Report on Form 10-K for the fiscal year ended January 31, 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, 2021, as filed with the SEC on March 19, 2021, under the caption "Quantitative and Qualitative Disclosures About Market Risk," is hereby incorporated by reference into this Quarterly Report on Form 10-Q.
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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.
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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.
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 2,100 cases as of August 23, 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, where trial is currently scheduled to begin in September 2022. In addition, there are over 200 state court cases pending as of August 23, 2021, some of which may be removed to federal court to seek MDL transfer. The case citations for the state court cases are listed on Exhibit 99.1 to this Quarterly Report on 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. The Company has appealed this decision to the fifth circuit and awaits the court's 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.
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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).
Money Transfer Agent Services Proceedings: The Company has received grand jury subpoenas issued by the 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 August 2020. The Company has been responding to these subpoenas and is cooperating with the government’s investigation. The Company has also responded to civil investigative demands from the 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 in its capacity as an agent. The Company is engaging in discussions with the FTC regarding a potential resolution of this matter, although there can be no assurance that the Company will 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 Company seeking various forms of 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 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.
Foreign Direct Investment Matters: In July 2021, the Directorate of Enforcement in India issued a show cause notice to Flipkart Private Limited and one of its subsidiaries ("Flipkart"), and to unrelated companies and individuals, including certain current and former shareholders and directors of Flipkart. The notice requests the recipients to show cause as to why further proceedings under India's Foreign Direct Investment rules and regulations (the "Rules") should not be initiated against them based on alleged violations during the period from 2009 to 2015, prior to the Company's acquisition of a majority stake in Flipkart in 2018. The notice is an initial stage of proceedings under the Rules which could, depending upon the conclusions at the end of the initial stage, lead to a hearing to consider the merits of the allegations described in the notice. If a hearing is initiated and if it is determined that violations of the Rules occurred, the regulatory authority has the authority to impose monetary and/or non-monetary relief. Flipkart has begun the process of responding to the notice and, if the matter progresses to a consideration of the merits of the allegations described in the notice is initiated, Flipkart intends to defend against the allegations vigorously. Due to the fact that this process is in an early stage, the Company is unable to predict whether the notice will lead to a hearing on the merits or, if it does, the final outcome of the resulting proceedings. While the Company does not currently believe that this matter 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 or outcome of any proceeding that might result from the notice, the amount of the proceeds the Company may receive in indemnification from individuals and entities that sold shares to the Company under the 2018 agreement pursuant to which the Company acquired its majority stake in Flipkart, or whether the Company's 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 when a governmental authority is a party to the proceedings and such proceedings involve potential monetary sanctions that the Company reasonably believes will exceed an applied threshold of $1 million.
In June 2021, the Company signed a tolling agreement with the State of California to toll the statute of limitations for potential claims regarding Walmart’s management of waste consumer products at its California facilities that are alleged to be hazardous. The Company is presently engaged in settlement discussions. It is not presently known whether a settlement will be reached or enforcement action will ensue, but the potential for penalties or settlement costs could exceed $1 million. The Company does not believe that this matter will have a material adverse effect on its business, financial position, results of operations, or cash flows.
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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," of our Annual Report on Form 10-K for the fiscal year ended January 31, 2021 which risks could materially and adversely affect our business, results of operations, financial condition, and liquidity. No material change in the 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 prior to February 22, 2021 were made under the 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 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 repurchase program. As of July 31, 2021, authorization for $15.2 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 July 31, 2021, was as follows:
Fiscal PeriodTotal
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)
May 1 - 31, 20215,141,955 $140.73 5,141,955 $16.9 
June 1 - 30, 20216,521,995 138.89 6,521,995 16.0 
July 1 - 31, 20215,242,319 141.11 5,242,319 15.2 
Total16,906,269 16,906,269 
(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 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 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 liabilities, losses, expenses and costs that Walmart may incur in connection with such matters;
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 the caption "Company Performance Metrics - Returns" regarding our belief that returns on capital will improve as we execute on our strategic framework;
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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 2022; a statement under the caption "Liquidity and Capital Resources Liquidity - Net Cash Used in Financing Activities - Company Share Repurchase Program" regarding funding of our 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
in Part II, Item 1 "Legal Proceedings": statements 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.

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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.
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 transactions 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;
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 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.
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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, 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.
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Item 6. Exhibits
The following documents are filed as an exhibit to this Quarterly Report on Form 10-Q:
Exhibit 3.1
Exhibit 3.2
Exhibit 10.1*
Exhibit 31.1*
Exhibit 31.2*
Exhibit 32.1**
Exhibit 32.2**
Exhibit 99.1*
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 July 31, 2021, formatted in Inline XBRL (included in Exhibit 101)
 
*Filed herewith as an Exhibit.
**Furnished herewith as an Exhibit.

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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: September 2, 2021By:/s/ C. Douglas McMillon
C. Douglas McMillon
President and Chief Executive Officer
(Principal Executive Officer)
Date: September 2, 2021By:/s/ M. Brett Biggs
M. Brett Biggs
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
Date: September 2, 2021By:/s/ David M. Chojnowski
David M. Chojnowski
Senior Vice President and Controller
(Principal Accounting Officer)

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