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Walmart Inc. - Quarter Report: 2023 July (Form 10-Q)


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, 2023.
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
image2a22.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
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, a 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 2,691,563,850 shares of common stock outstanding as of August 30, 2023.


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Walmart Inc.
Form 10-Q
For the Quarterly Period Ended July 31, 2023



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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)2023202220232022
Revenues:
Net sales$160,280 $151,381 $311,284 $291,669 
Membership and other income1,352 1,478 2,649 2,759 
Total revenues161,632 152,859 313,933 294,428 
Costs and expenses:
Cost of sales121,850 115,838 237,134 222,685 
Operating, selling, general and administrative expenses32,466 30,167 63,243 59,571 
Operating income7,316 6,854 13,556 12,172 
Interest:
Debt543 395 1,111 767 
Finance lease99 84 195 167 
Interest income(148)(31)(255)(67)
Interest, net494 448 1,051 867 
Other (gains) and losses(3,905)(238)(910)1,760 
Income before income taxes10,727 6,644 13,415 9,545 
Provision for income taxes2,674 1,497 3,466 2,295 
Consolidated net income8,053 5,147 9,949 7,250 
Consolidated net (income) loss attributable to noncontrolling interest(162)(385)(47)
Consolidated net income attributable to Walmart$7,891 $5,149 $9,564 $7,203 
Net income per common share:
Basic net income per common share attributable to Walmart$2.93 $1.88 $3.55 $2.62 
Diluted net income per common share attributable to Walmart2.92 1.88 3.54 2.61 
Weighted-average common shares outstanding:
Basic2,693 2,736 2,694 2,745 
Diluted2,703 2,745 2,703 2,755 
Dividends declared per common share$— $— $2.28 $2.24 
See accompanying notes.
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Walmart Inc.
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
 Three Months Ended July 31,Six Months Ended July 31,
(Amounts in millions)2023202220232022
Consolidated net income$8,053 $5,147 $9,949 $7,250 
Consolidated net (income) loss attributable to noncontrolling interest(162)(385)(47)
Consolidated net income attributable to Walmart7,891 5,149 9,564 7,203 
Other comprehensive income (loss), net of income taxes
Currency translation and other307 (1,380)1,116 (1,148)
Net investment hedges— — — — 
Cash flow hedges135 (293)66 (251)
Minimum pension liability(1)
Other comprehensive income (loss), net of income taxes441 (1,671)1,183 (1,396)
Other comprehensive (income) loss attributable to noncontrolling interest(112)275 (321)268 
Other comprehensive income (loss) attributable to Walmart329 (1,396)862 (1,128)
Comprehensive income, net of income taxes8,494 3,476 11,132 5,854 
Comprehensive (income) loss attributable to noncontrolling interest(274)277 (706)221 
Comprehensive income attributable to Walmart$8,220 $3,753 $10,426 $6,075 
See accompanying notes.
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Walmart Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
July 31,January 31,July 31,
(Amounts in millions)202320232022
ASSETS
Current assets:
Cash and cash equivalents$13,888 $8,625 $13,923 
Receivables, net7,891 7,933 7,522 
Inventories56,722 56,576 59,921 
Prepaid expenses and other3,531 2,521 2,798 
Total current assets82,032 75,655 84,164 
Property and equipment, net104,733 100,760 96,006 
Operating lease right-of-use assets13,710 13,555 13,872 
Finance lease right-of-use assets, net5,552 4,919 4,514 
Goodwill28,268 28,174 28,664 
Other long-term assets20,826 20,134 19,979 
Total assets$255,121 $243,197 $247,199 
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND EQUITY
Current liabilities:
Short-term borrowings$4,546 $372 $10,634 
Accounts payable56,576 53,742 54,191 
Dividends payable3,067 — 3,049 
Accrued liabilities29,239 31,126 23,843 
Accrued income taxes770 727 868 
Long-term debt due within one year2,897 4,191 5,316 
Operating lease obligations due within one year1,472 1,473 1,464 
Finance lease obligations due within one year653 567 534 
Total current liabilities99,220 92,198 99,899 
Long-term debt36,806 34,649 29,801 
Long-term operating lease obligations12,978 12,828 13,140 
Long-term finance lease obligations5,449 4,843 4,420 
Deferred income taxes and other15,109 14,688 14,092 
Commitments and contingencies
Redeemable noncontrolling interest232 237 260 
Equity:
Common stock269 269 272 
Capital in excess of par value4,635 4,969 4,672 
Retained earnings85,470 83,135 82,519 
Accumulated other comprehensive loss(10,818)(11,680)(9,894)
Total Walmart shareholders' equity79,556 76,693 77,569 
Nonredeemable noncontrolling interest5,771 7,061 8,018 
Total equity85,327 83,754 85,587 
Total liabilities, redeemable noncontrolling interest, and equity$255,121 $243,197 $247,199 
See accompanying notes.
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Walmart Inc.
Condensed Consolidated Statements of Shareholders' Equity
(Unaudited)
AccumulatedTotal
Capital inOtherWalmartNonredeemable
(Amounts in millions)Common StockExcess ofRetainedComprehensiveShareholders'NoncontrollingTotal
SharesAmountPar ValueEarningsLossEquityInterestEquity
Balances as of February 1, 20232,693 $269 $4,969 $83,135 $(11,680)$76,693 $7,061 $83,754 
Consolidated net income— — — 1,673 — 1,673 223 1,896 
Other comprehensive income, net of income taxes— — — — 533 533 209 742 
Dividends declared ($2.28 per share)
— — — (6,139)— (6,139)— (6,139)
Purchase of Company stock(5)(1)(38)(632)— (671)— (671)
Dividends declared to noncontrolling interest— — — — — — (761)(761)
Sale of subsidiary stock— — 389 — — 389 94 483 
Other(72)(2)— (73)— (73)
Balances as of April 30, 20232,694 $269 $5,248 $78,035 $(11,147)$72,405 $6,826 $79,231 
Consolidated net income— — — 7,891 — 7,891 162 8,053 
Other comprehensive income, net of income taxes— — — — 329 329 112 441 
Purchase of Company stock(3)— (29)(454)— (483)— (483)
Dividends to noncontrolling interest— — — — — — (6)(6)
Purchase of noncontrolling interest— — (1,076)— — (1,076)(1,367)(2,443)
Sale of subsidiary stock— — 160 — — 160 54 214 
Other— 332 (2)— 330 (10)320 
Balances as of July 31, 20232,692 $269 $4,635 $85,470 $(10,818)$79,556 $5,771 $85,327 
See accompanying notes.
AccumulatedTotal
Capital inOtherWalmartNonredeemable
(Amounts in millions)Common StockExcess ofRetainedComprehensiveShareholders'NoncontrollingTotal
SharesAmountPar ValueEarningsLossEquityInterestEquity
Balances as of February 1, 20222,761 $276 $4,839 $86,904 $(8,766)$83,253 $8,638 $91,891 
Consolidated net income— — — 2,054 — 2,054 49 2,103 
Other comprehensive income, net of income taxes— — — — 268 268 275 
Dividends declared ($2.24 per share)
— — — (6,173)— (6,173)— (6,173)
Purchase of Company stock(17)(2)(125)(2,249)— (2,376)— (2,376)
Sale of subsidiary stock— — 24 — — 24 11 35 
Other(151)(4)— (154)(1)(155)
Balances as of April 30, 20222,748 $275 $4,587 $80,532 $(8,498)$76,896 $8,704 $85,600 
Consolidated net income— — — 5,149 — 5,149 (2)5,147 
Other comprehensive (loss), net of income taxes— — — — (1,396)(1,396)(275)(1,671)
Purchase of Company stock(26)(3)(182)(3,201)— (3,386)— (3,386)
Dividends to noncontrolling interest— — — — — — (434)(434)
Sale of subsidiary stock— — — — 10 
Other— — 259 39 — 298 23 321 
Balances as of July 31, 20222,722 $272 $4,672 $82,519 $(9,894)$77,569 $8,018 $85,587 
        
See accompanying notes.
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Walmart Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Six Months Ended July 31,
(Amounts in millions)20232022
Cash flows from operating activities:
Consolidated net income$9,949 $7,250 
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Depreciation and amortization5,750 5,379 
Investment (gains) and losses, net(773)1,988 
Deferred income taxes436 111 
Other operating activities849 244 
Changes in certain assets and liabilities, net of effects of acquisitions and dispositions:
Receivables, net115 874 
Inventories222 (3,730)
Accounts payable2,999 (453)
Accrued liabilities(1,368)(2,439)
Accrued income taxes22 16 
Net cash provided by operating activities18,201 9,240 
Cash flows from investing activities:
Payments for property and equipment(9,216)(7,492)
Proceeds from the disposal of property and equipment133 72 
Proceeds from disposal of certain operations135 — 
Payments for business acquisitions, net of cash acquired(9)(616)
Other investing activities(952)(548)
Net cash used in investing activities(9,909)(8,584)
Cash flows from financing activities:
Net change in short-term borrowings4,181 10,230 
Proceeds from issuance of long-term debt4,967 — 
Repayments of long-term debt(4,063)(1,439)
Dividends paid(3,072)(3,081)
Purchase of Company stock(1,171)(5,747)
Dividends paid to noncontrolling interest(214)— 
Sale of subsidiary stock697 45 
Purchase of noncontrolling interest(3,462)— 
Other financing activities(1,172)(1,408)
Net cash used in financing activities(3,309)(1,400)
Effect of exchange rates on cash, cash equivalents and restricted cash147 (100)
Net increase (decrease) in cash, cash equivalents and restricted cash5,130 (844)
Cash, cash equivalents and restricted cash at beginning of year8,841 14,834 
Cash, cash equivalents and restricted cash at end of period$13,971 $13,990 
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, 2023 ("fiscal 2023"). Therefore, the interim Condensed Consolidated Financial Statements should be read in conjunction with that Annual Report on Form 10-K.
The Company's Condensed 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. There were no significant intervening events during the month of July 2023 related to the consolidated operations using a lag that materially affected the Condensed Consolidated Financial Statements.
The Company's business is seasonal to a certain extent due to calendar events and national and religious holidays, as well as weather patterns. Historically, the Company's highest sales volume has 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.
Supplier Financing Program Obligations
In September 2022, the FASB issued ASU 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations, which enhances the transparency about the use of supplier finance programs for investors and other allocators of capital. The Company adopted this ASU as of February 1, 2023, other than the roll-forward disclosure requirement which the Company will adopt in fiscal 2025.
The Company has supplier financing programs with financial institutions, in which the Company agrees to pay the financial institution the stated amount of confirmed invoices on the invoice due date for participating suppliers. Participation in these programs is optional and solely up to the supplier, who negotiates the terms of the arrangement directly with the financial institution and may allow early payment. Supplier participation in these programs has no bearing on the Company's amounts due. The payment terms that the Company has with participating suppliers under these programs generally range between 30 and 90 days. The Company does not have an economic interest in a supplier's participation in the program or a direct financial relationship with the financial institution funding the program. The Company is responsible for ensuring that participating financial institutions are paid according to the terms negotiated with the supplier, regardless of whether the supplier elects to receive early payment from the financial institution. The outstanding payment obligations to financial institutions under these programs were $5.3 billion, $5.2 billion and $6.4 billion, as of July 31, 2023, January 31, 2023 and July 31, 2022, respectively. These obligations are generally classified as accounts payable within the Condensed Consolidated Balance Sheets. The activity related to these programs is classified as an operating activity within the Condensed Consolidated Statements of Cash Flows.
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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, 2023 and 2022.
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)2023202220232022
Numerator
Consolidated net income$8,053 $5,147 $9,949 $7,250 
Consolidated net (income) loss attributable to noncontrolling interest(162)(385)(47)
Consolidated net income attributable to Walmart$7,891 $5,149 $9,564 $7,203 
Denominator
Weighted-average common shares outstanding, basic2,693 2,736 2,694 2,745 
Dilutive impact of share-based awards10 10 
Weighted-average common shares outstanding, diluted2,703 2,745 2,703 2,755 
Net income per common share attributable to Walmart
Basic$2.93 $1.88 $3.55 $2.62 
Diluted2.92 1.88 3.54 2.61 
Note 3. Accumulated Other Comprehensive Loss
The following tables provide the changes in the composition of total accumulated other comprehensive loss:
(Amounts in millions and net of immaterial income taxes)Currency 
Translation and Other
Net Investment HedgesCash Flow HedgesMinimum Pension LiabilityTotal
Balances as of February 1, 2023$(10,816)$94 $(951)$(7)$(11,680)
Other comprehensive income (loss) before reclassifications, net600 — (82)520 
Reclassifications to income, net— — 13 — 13 
Balances as of April 30, 2023$(10,216)$94 $(1,020)$(5)$(11,147)
Other comprehensive income (loss) before reclassifications, net195 — 115 (1)309 
Reclassifications to income, net— — 20 — 20 
Balances as of July 31, 2023$(10,021)$94 $(885)$(6)$(10,818)
(Amounts in millions and net of immaterial income taxes)Currency 
Translation and Other
Net Investment HedgesCash Flow HedgesMinimum Pension LiabilityTotal
Balances as of February 1, 2022$(8,100)$94 $(748)$(12)$(8,766)
Other comprehensive income before reclassifications, net225 — 26 — 251 
Reclassifications to income, net— — 16 17 
Balances as of April 30, 2022$(7,875)$94 $(706)$(11)$(8,498)
Other comprehensive income (loss) before reclassifications, net(796)— (622)(1,416)
Reclassifications to income, net(309)— 329 — 20 
Balances as of July 31, 2022$(8,980)$94 $(999)$(9)$(9,894)
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 and currency translation are recorded in other gains and losses in the Company's Condensed Consolidated Statements of Income.
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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 2023, 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, 2023 and January 31, 2023, all undrawn.
The following table provides the changes in the Company's long-term debt for the six months ended July 31, 2023:
(Amounts in millions)Long-term debt due within one yearLong-term debtTotal
Balances as of February 1, 2023$4,191 $34,649 $38,840 
Proceeds from issuance of long-term debt(1)
— 4,967 4,967 
Repayments of long-term debt(4,063)— (4,063)
Reclassifications of long-term debt2,773 (2,773)— 
Other(4)(37)(41)
Balances as of July 31, 2023$2,897 $36,806 $39,703 
(1) Proceeds from issuance of long-term debt are net of deferred loan costs and any related discount or premium.
Debt Issuances
Information on significant long-term debt issued during the six months ended July 31, 2023, for general corporate purposes, is as follows:
(Amounts in millions)
Issue DatePrincipal AmountMaturity Date Fixed Interest RateNet Proceeds
April 18, 2023$750 April 15, 20264.00%$748 
April 18, 2023$750 April 15, 20283.90%$746 
April 18, 2023$500 April 15, 20304.00%$497 
April 18, 2023$1,500 April 15, 20334.10%$1,491 
April 18, 2023$1,500 April 15, 20534.50%$1,485 
Total$4,967 
These issuances are senior, unsecured notes which rank equally with all other senior, unsecured debt obligations of the Company, and are not convertible or exchangeable. These issuances do not contain any financial covenants and do not restrict the Company's ability to pay dividends or repurchase company stock.
Debt Repayments
Information on significant long-term debt repayments during the six months ended July 31, 2023 is as follows:
(Amounts in millions)
Maturity DatePrincipal AmountFixed vs. FloatingInterest RateRepayment
April 11, 2023$1,750 Fixed2.55%$1,750 
June 26, 2023$2,280 Fixed3.40%$2,280 
Total$4,030 
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.
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The Company measures the fair value of certain equity investments, including certain equity method investments, on a recurring basis within other long-term assets in the accompanying Condensed Consolidated Balance Sheets. The fair value of these investments is as follows:
(Amounts in millions)Fair Value as of July 31, 2023Fair Value as of January 31, 2023
Equity investments measured using Level 1 inputs$4,424 $5,099 
Equity investments measured using Level 2 inputs6,281 5,570 
Total$10,705 $10,669 
Changes in fair value of equity securities, as well as certain immaterial equity method investments where the Company has elected the fair value option measured on a recurring basis, are recognized within other gains and losses in the Condensed Consolidated Statements of Income. These fair value changes, along with certain other immaterial investment activity, resulted in net gains of $3.2 billion and $36 million for the three and six months ended July 31, 2023, respectively, and a net gain of $0.8 billion and a net loss of $1.2 billion for the three and six months ended July 31, 2022, respectively. These fair value changes were primarily due to net changes in the underlying stock prices of those investments. Equity investments without readily determinable fair values are carried at cost and adjusted for any observable price changes or impairments within other gains and losses in the Condensed Consolidated Statements of Income.
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, 2023 and January 31, 2023, the notional amounts and fair values of these derivatives were as follows:
 July 31, 2023January 31, 2023
(Amounts in millions)Notional AmountFair ValueNotional AmountFair Value
Receive fixed-rate, pay variable-rate interest rate swaps designated as fair value hedges$6,271 $(765)
(1)
$8,021 $(689)
(1)
Receive fixed-rate, pay fixed-rate cross-currency swaps designated as cash flow hedges6,019 (1,295)
(1)
5,900 (1,423)
(1)
Total$12,290 $(2,060)$13,921 $(2,112)
(1) 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. The Company did not have any material assets or liabilities resulting in nonrecurring fair value measurements as of July 31, 2023 in the Company's Condensed Consolidated Balance Sheets.
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, 2023 and January 31, 2023, are as follows: 
 July 31, 2023January 31, 2023
(Amounts in millions)Carrying ValueFair ValueCarrying ValueFair Value
Long-term debt, including amounts due within one year$39,703 $37,988 $38,840 $38,169 
Note 6. Contingencies
Legal Proceedings
The Company is involved in a number of legal proceedings and certain regulatory matters. The Company records a liability for those legal proceedings and regulatory matters when it determines it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The Company also discloses when it is reasonably possible that a material loss may be incurred. From time to time, 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 to or settled by the Company, individually or in the aggregate, may result in a liability material to the Company's financial position, results of operations or cash flows.
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Settlement Framework Regarding Multidistrict and State or Local Opioid-Related Litigation
During fiscal 2023, the Company accrued a liability for approximately $3.3 billion for the Settlement Framework (described below) and other previously agreed upon state and tribal settlements. The Settlement Framework includes no admission of wrongdoing or liability by the Company, and the Company continues to believe it has substantial factual and legal defenses to opioids-related 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) (the "MDL") 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 the MDL.
Similar cases that name the Company also have been filed in state courts by state, local, and tribal governments, healthcare providers, and other plaintiffs. Plaintiffs in these state court cases and in the MDL are seeking compensatory and punitive damages, as well as injunctive relief including abatement. 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 November 15, 2022, the Company announced it had agreed to financial amounts and payment terms to resolve substantially all opioids-related lawsuits filed against the Company by states, political subdivisions, and Native American tribes whether as part of the MDL (excluding, however, a single, two-county trial described further below) or in state court, as well as all potential claims that could be made against the Company by states, political subdivisions, and Native American tribes for up to approximately $3.1 billion (the "Settlement Amount"). The Settlement Amount includes amounts for remediation of alleged harms as well as attorneys' fees and costs and also includes some, but not all, amounts from previously agreed recent settlements by the Company. One settlement framework with corresponding conditions and participation thresholds applies for the states and political subdivisions, and another settlement framework with corresponding conditions and participation thresholds applies for the Native American tribes. Both settlement frameworks are referred to collectively as the "Settlement Framework."
The Settlement Framework, among other applicable conditions, provides that payments to states and political subdivisions are contingent upon the number of states and political subdivisions, including those states and political subdivisions who have not yet sued the Company, that agree to participate in the Settlement Framework or otherwise have their claims foreclosed within a prescribed deadline. On December 20, 2022, the Company announced that it had settlement agreements with all 50 states, including four states that previously settled with the Company, as well as the District of Columbia, Puerto Rico, and three other U.S. territories (the "Settling States"), thus satisfying the initial threshold of required participation by Settling States. On August 22, 2023, the settlement administrator determined that a sufficient number of political subdivisions had agreed to participate in the Settlement Framework, which was a necessary condition for the Settlement Framework to become effective. The Settlement Framework will become effective 15 days later, on September 6, 2023. The Company is required to deposit up to the full portion of the Settlement Amount attributable to the Settling States within 15 days following the effective date of the Settlement Framework, which the Company expects to pay during the fiscal quarter ending October 31, 2023. Although the settlement administrator has determined a sufficient number of political subdivisions have agreed to participate in the State Settlement Framework, and thus the State Settlement Framework will become effective, eligible political subdivisions still have until July 15, 2025 to join the State Settlement Framework.
Through July 2023, the Company has paid approximately $0.6 billion in the aggregate for separate settlements with Cherokee Nation, New Mexico, Florida, West Virginia, and Alabama, as well as various Native American tribes (excluding Cherokee Nation) that agreed to participate in the Settlement Framework or otherwise have their claims foreclosed within a prescribed deadline. Of the original approximately $3.3 billion accrued liability for the Settlement Framework and other settlements, approximately $2.8 billion remains and is recorded in accrued liabilities within the Company's Condensed Consolidated Balance Sheet as of July 31, 2023.
Other Opioid-Related Litigation
The Company will continue to vigorously defend against any opioid-related litigation not covered or otherwise resolved by the Settlement Framework, including, but not limited to, each of the matters described below; any other actions filed by healthcare providers, individuals, and third-party payers; and any action filed by a political subdivision or Native American tribe that is not resolved by the Settlement Framework. Accordingly, the Company has not accrued a liability for these opioid-related litigation matters nor can the Company reasonably estimate any loss or range of loss that may arise from these matters. The Company can provide no assurance as to the scope and outcome of any of these matters and no assurance that its business, financial position, results of operations or cash flows will not be materially adversely affected.
Two-County Trial and MDL Bellwethers; and Canada. The liability phase of a single, two-county trial in one of the MDL cases resulted in a jury verdict on November 23, 2021, finding in favor of the plaintiffs as to the liability of all defendants, including
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the Company. The abatement phase of the single, two-county trial resulted in a judgment on August 17, 2022, that ordered all three defendants, including the Company, to pay an aggregate amount of approximately $0.7 billion over fifteen years, on a joint and several liability basis, and granted the plaintiffs injunctive relief. On September 7, 2022, the Company filed an appeal with the Sixth Circuit Court of Appeals. The monetary aspect of the judgment is stayed pending appeal, and the injunctive aspect of the judgment went into effect on February 20, 2023.
The MDL designated five additional single-county cases as bellwethers to proceed through discovery; however, these five counties have elected to participate in the Settlement Framework and receive a portion of the Settlement Amount rather than go to trial. The MDL may designate additional bellwethers of cases brought by healthcare providers and third-party payers.
Wal-Mart Canada Corp. and certain other subsidiaries of the Company have been named as defendants in two putative class action complaints filed in Canada related to dispensing and distribution practices involving opioids. These matters remain pending.
DOJ Opioid Civil Litigation. On December 22, 2020, the U.S. Department of Justice (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 Controlled Substances Act. The DOJ is seeking civil penalties and injunctive relief. The Company initially moved to dismiss the DOJ complaint on February 22, 2021. After that motion was fully briefed, the DOJ filed an amended complaint on October 7, 2022. On November 7, 2022, the Company filed a partial motion to dismiss the amended complaint. That motion remains pending.
Opioid-Related Securities Class Actions and Derivative Litigation. 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. On October 8, 2021, the defendants filed a motion to dismiss the consolidated securities action. After the parties had fully briefed the motion to dismiss, on September 9, 2022, the Court entered an order permitting the plaintiffs to file an amended complaint, which was filed on October 14, 2022, and which revised the applicable putative class of investors to those who acquired Walmart stock from March 31, 2017 through December 22, 2020. On November 16, 2022, the defendants filed a motion to dismiss the amended complaint. That motion remains pending.
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. Those cases have been stayed pending developments in other opioids litigation matters. On September 27, 2021, three shareholders filed a derivative action in the Delaware Court of Chancery alleging that certain members of the current Board of Directors and certain former officers breached their fiduciary duties in failing to adequately oversee the Company's prescription opioids business. The defendants moved to dismiss and/or to stay proceedings on December 21, 2021, and the plaintiffs responded by filing an amended complaint on February 22, 2022. On April 20, 2022, the defendants moved to dismiss and/or to stay proceedings with respect to the amended complaint. In two orders issued on April 12 and 26, 2023, the Court of Chancery granted the defendants' motion to dismiss with respect to claims involving the Company's distribution practices and denied the remainder of the motion, including the Company's request to stay the litigation. On May 5, 2023, the Company's Board of Directors (the "Board") appointed an independent Special Litigation Committee (the "SLC") to investigate the allegations regarding certain current and former officers and directors named in the various derivative proceedings regarding oversight with respect to opioids. The Board has authorized the SLC to retain independent legal counsel and such other advisors as the SLC deems appropriate in carrying out its duties. The derivative matter pending in the Delaware Court of Chancery is stayed until the SLC completes its investigation.
Other Legal Proceedings
Asda Equal Value Claims. Asda, formerly a subsidiary of the Company, was and still is 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, as well as additional claims in the High Court of the United Kingdom (the "Asda Equal Value Claims"). Further claims may be asserted in the future. Subsequent to the divestiture of Asda in February 2021, the Company continues to oversee the conduct of the defense of these claims. While potential liability for these claims remains with Asda, the Company has agreed to provide indemnification with respect to certain of 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 outcome of these matters.
Money Transfer Agent Services Matters. The Company has responded to grand jury subpoenas issued by the United States Attorney's Office for the Middle District of Pennsylvania on behalf of the DOJ seeking documents regarding the Company's consumer fraud prevention program and anti-money laundering compliance related to the Company's money transfer services,
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where Walmart is an agent. The most recent subpoena was issued in August 2020. The Company continues to cooperate with and provide information in response to requests from the DOJ. The Company has also responded to civil investigative demands from the United States Federal Trade Commission (the "FTC") in connection with the FTC's investigation related to money transfers and the Company's anti-fraud program in its capacity as an agent. On June 28, 2022, the FTC filed a complaint against the Company in the U.S. District Court for the Northern District of Illinois alleging that Walmart violated the Federal Trade Commission Act and the Telemarketing Sales Rule regarding its money transfer agent services and is requesting non-monetary relief and civil penalties. On August 29, 2022, the Company filed a motion to dismiss the complaint. On October 5, 2022, the FTC responded to the motion, and on October 28, 2022, the Company filed its reply. On March 27, 2023, the Court issued an opinion dismissing the FTC's claim under the Telemarketing Sales Rule and denying Walmart's motion to dismiss the claim under Section 5 of the Federal Trade Commission Act. On April 12, 2023, Walmart filed a motion to certify the Court's March 27, 2023, order for interlocutory appeal. The FTC's response to Walmart's motion to certify an interlocutory appeal was filed on May 8, 2023; Walmart filed its reply on May 18, 2023. On June 30, 2023, the FTC filed an amended complaint against Walmart again asserting claims under the Federal Trade Commission Act and Telemarketing Sales Rule. Walmart's motion to dismiss the amended complaint was filed on August 11, 2023; the FTC's response is due on September 15, 2023; and Walmart's reply is due on October 9, 2023. On July 20, 2023, the Court denied Walmart's motion to certify the Court's March 27, 2023, order for interlocutory appeal, finding that it would be more orderly to consider a request for interlocutory appeal after a ruling on Walmart's motion to dismiss the amended complaint. The Company intends to vigorously defend these matters. However, the Company can provide no assurance as to the scope and outcome of these matters and cannot reasonably estimate any loss or range of loss that may arise. Accordingly, the Company can provide no assurance that its business, financial position, results of operations or cash flows will not be materially adversely affected.
Note 7. Segments and Disaggregated Revenue
Segments
The Company is engaged in the operation of retail and wholesale stores and clubs, as well as eCommerce websites, 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, which includes omni-channel initiatives and certain other business offerings such as advertising services through Walmart Connect. The Walmart International segment consists of the Company's operations outside of the U.S., as well as eCommerce and omni-channel initiatives. The Sam's Club segment includes the warehouse membership clubs in the U.S., as well as samsclub.com and omni-channel initiatives. Corporate and support consists of corporate overhead and other items not allocated to any of the Company's segments.
The Company measures the results of its segments using, among other measures, each segment's net sales and operating income, which includes certain corporate overhead allocations. From time to time, the Company revises the measurement of each segment's operating income and other measures, including any corporate overhead allocations, as determined by the information regularly reviewed by its CODM. When the measurement of a segment significantly 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)
2023202220232022
Net sales:
Walmart U.S.$110,854 $105,130 $214,755 $202,034 
Walmart International27,596 24,350 54,200 48,113 
Sam's Club21,830 21,901 42,329 41,522 
Net sales$160,280 $151,381 $311,284 $291,669 
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Operating income by segment, as well as unallocated operating expenses 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)
2023202220232022
Operating income (loss):
Walmart U.S.$6,114 $5,683 $11,098 $10,145 
Walmart International1,190 1,043 2,354 1,815 
Sam's Club521 427 979 887 
Corporate and support(509)(299)(875)(675)
Operating income7,316 6,854 13,556 12,172 
Interest, net494 448 1,051 867 
Other (gains) and losses(3,905)(238)(910)1,760 
Income before income taxes$10,727 $6,644 $13,415 $9,545 
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 category2023202220232022
Grocery$66,240 $61,469 $129,647 $118,233 
General merchandise29,076 30,073 54,841 57,452 
Health and wellness13,374 11,331 26,222 22,225 
Other categories2,164 2,257 4,045 4,124 
Total$110,854 $105,130 $214,755 $202,034 
Of Walmart U.S.'s total net sales, approximately $15.5 billion and $12.5 billion related to eCommerce for the three months ended July 31, 2023 and 2022, respectively, and approximately $30.0 billion and $23.9 billion related to eCommerce for the six months ended July 31, 2023 and 2022, respectively.
(Amounts in millions)Three Months Ended July 31,Six Months Ended July 31,
Walmart International net sales by market2023202220232022
Mexico and Central America$11,994 $9,690 $22,952 $18,778 
Canada5,842 5,767 10,982 10,917 
China3,896 3,397 8,820 7,524 
Other5,864 5,496 11,446 10,894 
Total$27,596 $24,350 $54,200 $48,113 
Of Walmart International's total net sales, approximately $5.8 billion and $4.6 billion related to eCommerce for the three months ended July 31, 2023 and 2022, respectively, and approximately $11.2 billion and $8.9 billion related to eCommerce for the six months ended July 31, 2023 and 2022, respectively.
(Amounts in millions)Three Months Ended July 31,Six Months Ended July 31,
Sam's Club net sales by merchandise category2023202220232022
Grocery and consumables$14,325 $13,392 $27,823 $25,693 
Fuel, tobacco and other categories3,338 4,390 6,526 7,948 
Home and apparel2,428 2,492 4,507 4,607 
Health and wellness1,186 1,006 2,342 2,016 
Technology, office and entertainment553 621 1,131 1,258 
Total$21,830 $21,901 $42,329 $41,522 
Of Sam's Club's total net sales, approximately $2.4 billion and $2.1 billion related to eCommerce for the three months ended July 31, 2023 and 2022, respectively, and approximately $4.7 billion and $3.9 billion related to eCommerce for the six months ended July 31, 2023 and 2022, 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, 2024 ("fiscal 2024") and the fiscal year ended January 31, 2023 ("fiscal 2023"), should be read in conjunction with our Condensed Consolidated Financial Statements as of and for the three and six months ended July 31, 2023, 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, 2023, 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, 2023.
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 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 as well as certain other business offerings that are part of our strategy, such as our Walmart Connect advertising business. 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 relatively 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.
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 and companies that offer services in digital advertising, fulfillment and delivery services, health and wellness, and financial services. 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, competitive pressures, consumer disposable income, consumer debt levels and buying patterns, consumer credit availability, disruptions in supply chain and inventory management, cost and availability of goods, currency exchange rate fluctuations, customer preferences, deflation, inflation, fuel and energy prices, general economic conditions, insurance costs, interest rates, labor availability and costs, tax rates, the imposition of tariffs, cybersecurity attacks and unemployment.
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We are committed to helping customers save money and live better through everyday low prices, supported by everyday low costs. However, like other retail companies, we have experienced continued inflation that impacts our merchandise costs. The impact to our net sales and gross profit margin is influenced in part by our pricing and merchandising strategies in response to cost increases. Those pricing strategies include, but are not limited to: absorbing cost increases instead of passing those cost increases on to our customers and members; reducing prices in certain merchandise categories; focusing on opening price points for certain food categories; and when necessary, passing cost increases on to our customers and members. Merchandising strategies include, but are not limited to: working with our suppliers to reduce product costs and share in absorbing cost increases; focusing on private label brands and smaller pack sizes; earlier-than-usual purchasing and in greater volumes or moderating purchasing in certain categories; and securing ocean carrier and container capacity. These strategies have and may continue to impact gross profit as a percentage of net sales.
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 pressure from inflation, a challenging macro environment, geopolitical conditions, supply chain disruptions, volatility in employment trends and consumer confidence. 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 priorities as follows:
Growth - serve customers through a seamless omni-channel experience;
Margin - improve our operating income margin through productivity initiatives as well as category and business mix; and
Returns - improve our Return on Investment ("ROI") through margin improvement and disciplined capital spend.
Growth
Our objective of prioritizing growth means we will focus on serving customers and members however they want to shop through our omni-channel business model. This includes increasing comparable store and club sales through increasing membership at Sam's Club and through Walmart+, accelerating eCommerce sales growth and expansion of omni-channel initiatives that complement our strategy.
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. We focus on comparable sales in the U.S. as we believe it is a meaningful metric within the context of the U.S. retail market where there is a single currency, one inflationary market and generally consistent store and club formats from year to year.
Calendar comparable sales, as well as the impact of fuel, for the three and six months ended July 31, 2023 and 2022, were as follows:
 Three Months Ended July 31,Six Months Ended July 31,
 20232022202320222023202220232022
 With FuelFuel ImpactWith FuelFuel Impact
Walmart U.S.5.9 %7.0 %(0.3)%0.6 %6.7 %5.5 %(0.3)%0.5 %
Sam's Club(0.2)%17.3 %(5.6)%8.0 %2.1 %17.4 %(4.4)%7.5 %
Total U.S.4.9 %8.7 %(1.2)%1.9 %5.9 %7.4 %(1.0)%1.7 %
Comparable sales in the U.S., including fuel, increased 4.9% and 5.9% for the three and six months ended July 31, 2023, respectively, when compared to the same periods in the previous fiscal year. The Walmart U.S. segment had comparable sales growth of 5.9% and 6.7% for the three and six months ended July 31, 2023, respectively, driven by growth in average ticket, including strong sales in grocery and health and wellness, as well as elevated inflation impacts in certain merchandise categories, combined with growth in transactions. The increases were partially offset by a modest decrease in general merchandise sales. The Walmart U.S. segment's eCommerce sales positively contributed approximately 2.5% and 2.6% to comparable sales for the three and six months ended July 31, 2023, respectively, which was primarily driven by store pickup and delivery.
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Comparable sales at the Sam's Club segment decreased 0.2% and increased 2.1% for the three and six months ended July 31, 2023, respectively. The decrease in comparable sales for the three months ended July 31, 2023 was primarily due to lower fuel sales from deflation in this category, offset by growth in merchandise sales, which benefited from growth in transactions and average ticket and included elevated inflation impacts on certain merchandise categories. Growth in comparable sales for the six months ended July 31, 2023 benefited from growth in average ticket and transactions and included elevated inflation impacts in certain merchandise categories, partially offset by lower fuel sales due to deflation in this category. The Sam's Club segment's eCommerce sales positively contributed approximately 1.8% and 1.7% to comparable sales for the three and six months ended July 31, 2023, respectively, which was primarily driven by Curbside Pickup and Ship to Home.
Margin
Our objective of prioritizing margin focuses on growth with a focus on incremental margin accretion through a combination of productivity improvements as well as category and business mix. We invest in technology and process improvements to increase productivity, manage inventory, and reduce costs, and we operate with discipline by managing expenses and optimizing the efficiency of how we work. Additionally, we focus on our mix of businesses, including the expansion of connected value streams with higher margins, such as advertising. Our objective is to achieve operating income leverage, which we define as growing operating income at a faster rate than net sales.
Three Months Ended July 31,Six Months Ended July 31,
(Amounts in millions)2023202220232022
Net sales$160,280 $151,381 $311,284 $291,669 
Percentage change from comparable period5.9 %8.2 %6.7 %5.3 %
Gross profit as a percentage of net sales24.0 %23.5 %23.8 %23.7 %
Operating, selling, general and administrative expenses as a percentage of net sales20.3 %19.9 %20.3 %20.4 %
Operating income$7,316 $6,854 $13,556 $12,172 
Operating income as a percentage of net sales4.6 %4.5 %4.4 %4.2 %
Gross profit as a percentage of net sales ("gross profit rate") increased 50 and 17 basis points for the three and six months ended July 31, 2023, respectively, when compared to the same periods in the previous fiscal year. The increases were primarily due to the lapping of higher markdowns and supply chain costs incurred in the previous year and managing prices to reflect elevated cost inflation, partially offset by product mix shifts into lower margin categories globally.
Operating expenses as a percentage of net sales increased 33 and decreased 10 basis points for the three and six months ended July 31, 2023, respectively. The increase for the three months ended July 31, 2023 was primarily due to higher variable pay, technology and remodel costs in the U.S. and an incremental expense related to the opioid settlement, partially offset by strong fixed cost leverage in most of our international markets. The decrease for the six months ended July 31, 2023 was driven by higher sales in each of our segments as well as operating discipline.
Operating income as a percentage of net sales increased 3 and 18 basis points for the three and six months ended July 31, 2023, respectively, due to the factors described above.
Returns
As we execute our strategic priorities, focusing on high return investments that drive operating leverage, 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 5.6% and 5.8% for the trailing twelve months ended July 31, 2023 and 2022, respectively. The decrease in ROA was primarily due to the increase in average total assets driven by higher purchases of property and equipment. ROI was 12.8% and 13.8% for the trailing twelve months ended July 31, 2023 and 2022, respectively. The decrease in ROI was the result of a decrease in operating income primarily due to opioid legal charges and reorganization and restructuring charges recorded in Q3 and Q4 of fiscal 2023 respectively, as well as an increase in average invested capital primarily due to higher purchases of property and equipment.
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.
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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 GAAP 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; and 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)20232022
CALCULATION OF RETURN ON ASSETS
Numerator
Consolidated net income$13,991 $14,015 
Denominator
Average total assets(1)
$251,160 $242,876 
Return on assets (ROA)5.6 %5.8 %
CALCULATION OF RETURN ON INVESTMENT
Numerator
Operating income$21,812 $23,851 
+ Interest income442 155 
+ Depreciation and amortization11,318 10,733 
+ Rent2,284 2,302 
= ROI operating income$35,856 $37,041 
Denominator
Average total assets(1)
$251,160 $242,876 
'+ Average accumulated depreciation and amortization(1)
110,921 102,155 
'- Average accounts payable(1)
55,384 51,896 
 - Average accrued liabilities(1)
26,541 23,878 
= Average invested capital$280,156 $269,257 
Return on investment (ROI)12.8 %13.8 %
(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,
 202320222021
Certain Balance Sheet Data
Total assets$255,121 $247,199 $238,552 
Accumulated depreciation and amortization115,878 105,963 98,346 
Accounts payable56,576 54,191 49,601 
Accrued liabilities29,239 23,843 23,915 
 
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Strategic Capital Allocation
Our strategy includes allocating the majority of our capital to higher-return areas focused on automation such as eCommerce, supply chain and store and club investments. The following table provides additional detail:
(Amounts in millions)Six Months Ended July 31,
Allocation of Capital Expenditures20232022
Supply chain, customer-facing initiatives and technology$5,180 $4,106 
Store and club remodels2,974 2,377 
New stores and clubs, including expansions and relocations17 21 
Total U.S.8,171 6,504 
Walmart International1,045 988 
Total Capital Expenditures$9,216 $7,492 
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 additional 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. Net cash provided by operating activities was $18.2 billion for the six months ended July 31, 2023, which represents an increase of $9.0 billion when compared to the same period in the prior year. The increase is primarily due to moderated levels of inventory purchases and timing of certain payments. Free cash flow for the six months ended July 31, 2023 was $9.0 billion, which represents an increase of $7.2 billion when compared to the same period in the prior year. The increase in free cash flow is due to the increase in operating cash flows described above, partially offset by an increase of $1.7 billion in capital expenditures to support our investment strategy.
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)20232022
Net cash provided by operating activities$18,201 $9,240 
Payments for property and equipment(9,216)(7,492)
Free cash flow$8,985 $1,748 
Net cash used in investing activities(1)
$(9,909)$(8,584)
Net cash used in financing activities(3,309)(1,400)
(1) "Net Cash 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)2023202220232022
Total revenues$161,632 $152,859 $313,933 $294,428 
Percentage change from comparable period5.7 %8.4 %6.6 %5.4%
Net sales$160,280 $151,381 $311,284 $291,669 
Percentage change from comparable period5.9 %8.2 %6.7 %5.3%
Total U.S. calendar comparable sales increase4.9 %8.7 %5.9 %7.4%
Gross profit margin as a percentage of net sales24.0 %23.5 %23.8 %23.7%
Operating income$7,316 $6,854 $13,556 $12,172 
Operating income as a percentage of net sales4.6 %4.5 %4.4 %4.2%
Other (gains) and losses$(3,905)$(238)$(910)$1,760 
Consolidated net income $8,053 $5,147 $9,949 $7,250 
Unit counts at period end10,482 10,585 10,482 10,585 
Retail square feet at period end1,050 1,057 1,050 1,057 
Our total revenues, which are mostly comprised of net sales but also include membership and other income, increased $8.8 billion or 5.7% and $19.5 billion or 6.6% for the three and six months ended July 31, 2023, respectively, when compared to the same periods in the previous fiscal year. The increase in revenue for the three months ended July 31, 2023 was primarily due to strong positive comparable sales for the Walmart U.S. segment, which were driven by growth in average ticket, including strong sales in grocery and health and wellness, as well as elevated inflation impacts in certain merchandise categories, combined with growth in transactions. Additionally, most of our international markets had positive comparable sales. Net sales were positively impacted by $0.6 billion of fluctuations in currency exchange rates and negatively impacted by a decrease in fuel sales of $1.0 billion in the Sam's Club segment primarily due to deflation in this category.
The increase in revenue for the six months ended July 31, 2023 was primarily due to strong positive comparable sales for the Walmart U.S. and Sam's Club segments, which were driven by growth in average ticket, including strong sales in grocery and health and wellness, as well as elevated inflation impacts in certain merchandise categories, combined with growth in transactions. Additionally, most of our international markets had positive comparable sales. Net sales were positively impacted by $0.3 billion of fluctuations in currency exchange rates and negatively impacted by a decrease in fuel sales of $1.4 billion in the Sam's Club segment primarily due to deflation in this category.
Gross profit rate increased 50 and 17 basis points for the three and six months ended July 31, 2023, respectively, when compared to the same periods in the previous fiscal year. The increases were primarily due to the lapping of higher markdowns and supply chain costs incurred in the previous year and managing prices to reflect elevated cost inflation, partially offset by product mix shifts into lower margin categories globally.
Operating expenses as a percentage of net sales increased 33 and decreased 10 basis points for the three and six months ended July 31, 2023, respectively, when compared to the same periods in the previous fiscal year. The increase for the three months ended July 31, 2023 was primarily due to higher variable pay, technology and remodel costs in the U.S. and an incremental expense related to the opioid settlement, partially offset by strong fixed cost leverage in most of our international markets. The decrease for the six months ended July 31, 2023 was driven by higher sales in each of our segments as well as operating discipline.
Other gains and losses consist of certain non-operating items, such as the change in the fair value of our investments and gains or losses on business dispositions, which by their nature can fluctuate from period to period. The net increases of $3.7 billion and $2.7 billion in other gains for the three and six months ended July 31, 2023, respectively, when compared to the same periods in the previous fiscal year, were primarily due to increases in net gains from changes in the fair value of our equity and other investments driven by net increases in their underlying stock prices.
Our effective income tax rate was 24.9% and 25.8% for the three and six months ended July 31, 2023, respectively, compared to 22.5% and 24.0% for the same periods in the previous fiscal year. The increase in the effective tax rate was primarily due to a fiscal 2023 non-recurring rate benefit from the gain recognized on the sale of our remaining equity method investment in Brazil, which provided minimal realizable tax expense, and a discrete benefit for the three and six months ended July 31, 2022, partially offset by the tax impact on changes in fair value of our investments. 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 increased $2.9 billion and $2.7 billion for the three and six months ended July 31, 2023, respectively, when compared to the same periods in the previous fiscal year. Additionally, net income attributable to noncontrolling interest increased $0.2 billion and $0.3 billion for the three and six months ended July 31, 2023, respectively, which included stronger results from our Walmex operations. Accordingly, diluted net income per common share attributable to Walmart was $2.92 and $3.54 for the three and six months ended July 31, 2023, respectively, which represents respective increases of $1.04 and $0.93 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)2023202220232022
Net sales$110,854 $105,130 $214,755 $202,034 
Percentage change from comparable period5.4 %7.1 %6.3 %5.6 %
Calendar comparable sales increase5.9 %7.0 %6.7 %5.5 %
Operating income$6,114 $5,683 $11,098 $10,145 
Operating income as a percentage of net sales5.5 %5.4 %5.2 %5.0 %
Unit counts at period end4,616 4,735 4,616 4,735 
Retail square feet at period end699 702 699 702 
Net sales for the Walmart U.S. segment increased $5.7 billion or 5.4% and $12.7 billion or 6.3% for the three and six months ended July 31, 2023, respectively, when compared to the same periods in the previous fiscal year. The increases were due to comparable sales of 5.9% and 6.7% for the three and six months ended July 31, 2023, respectively, driven by growth in average ticket, including strong sales in grocery and health and wellness, as well as elevated inflation impacts in certain merchandise categories, combined with growth in transactions. The increases were partially offset by a modest decrease in general merchandise sales. The Walmart U.S. segment's eCommerce sales positively contributed approximately 2.5% and 2.6% to comparable sales for the three and six months ended July 31, 2023, respectively, which was primarily driven by store pickup and delivery.
Gross profit rate increased 40 and 2 basis points for the three and six months ended July 31, 2023, respectively, when compared to the same periods in the previous fiscal year. The increases were primarily driven by the lapping of higher markdowns and supply chain costs incurred in the previous year and managing prices to reflect elevated cost inflation, partially offset by product mix shifts into lower margin categories.
Operating expenses as a percentage of net sales increased 28 basis points and decreased 16 basis points for three and six months ended July 31, 2023, respectively, when compared to the same periods in the previous fiscal year. The increase for the three months ended July 31, 2023 was primarily due to higher variable pay, elevated technology spend and higher costs related to store remodels. The decrease for the six months ended July 31, 2023 was primarily due to strong sales growth, partially offset by higher variable pay.
As a result of the factors discussed above, operating income increased $0.4 billion and $1.0 billion for the three and six months ended July 31, 2023, respectively, when compared to the same periods in the previous fiscal year.
Walmart International Segment
 Three Months Ended July 31,Six Months Ended July 31,
(Amounts in millions, except unit counts)2023202220232022
Net sales$27,596 $24,350 $54,200 $48,113 
Percentage change from comparable period13.3 %5.7 %12.7 %(4.4)%
Operating income$1,190 $1,043 $2,354 $1,815 
Operating income as a percentage of net sales4.3 %4.3 %4.3 %3.8 %
Unit counts at period end5,267 5,250 5,267 5,250 
Retail square feet at period end271 274 271 274 
Net sales for the Walmart International segment increased $3.2 billion or 13.3% and $6.1 billion or 12.7% for the three and six months ended July 31, 2023, respectively, when compared to the same periods in the previous fiscal year. The increases were primarily due to positive comparable sales in most of our international markets, including eCommerce growth, and positive fluctuations in currency exchange rates of $0.6 billion and $0.3 billion for the three and six months ended July 31, 2023, respectively.
Gross profit rate decreased 37 and 12 basis points for the three and six months ended July 31, 2023, respectively, when compared to the same periods in the previous fiscal year, primarily due to ongoing format and channel mix shifts and category mix shifts to food and consumables.
Operating expenses as a percentage of net sales decreased 129 and 120 basis points for the three and six months ended July 31, 2023, respectively, when compared to the same periods in the previous fiscal year, primarily due to strong sales, format mix shifts and operating efficiencies in most of our markets.
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As a result of the factors discussed above, as well as lapping a benefit in membership and other income related to an insurance settlement for Walmart Chile, operating income increased $0.1 billion and $0.5 billion for the three and six months ended July 31, 2023, 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)2023202220232022
Including Fuel
Net sales$21,830 $21,901 $42,329 $41,522 
Percentage change from comparable period(0.3)%17.5 %1.9 %17.5 %
Calendar comparable sales increase(0.2)%17.3 %2.1 %17.4 %
Operating income$521 $427 $979 $887 
Operating income as a percentage of net sales2.4 %1.9 %2.3 %2.1 %
Unit counts at period end599 600 599 600 
Retail square feet at period end80 80 80 80 
Excluding Fuel (1)
Net sales$18,945 $17,999 $36,708 $34,531 
Percentage change from comparable period5.3 %9.5 %6.3 %10.1 %
Operating income$392 $222 $746 $557 
Operating income as a percentage of net sales2.1 %1.2 %2.0 %1.6 %
(1) We believe the "Excluding Fuel" information is useful to investors because it permits investors to understand the effect of the Sam's Club segment's fuel sales on its results of operations, which are impacted by the volatility of fuel prices. Volatility in fuel prices may continue to impact the operating results of the Sam's Club segment in the future.
Net sales for the Sam's Club segment decreased $0.1 billion or 0.3% and increased $0.8 billion or 1.9% for the three and six months ended July 31, 2023, respectively, when compared to the same periods in the previous fiscal year. The decrease for the three months ended July 31, 2023 was primarily due to a decrease in fuel sales of $1.0 billion due to deflation in this category. Net sales excluding fuel increased $0.9 billion primarily due to increased merchandise sales, which benefited from growth in average transactions and ticket and included elevated inflation impacts on certain merchandise categories. The increase for the six months ended July 31, 2023 was driven by an increase in comparable sales, including fuel, of 2.1%. Growth in comparable sales for the six months ended July 31, 2023 benefited from growth in average ticket and transactions and included elevated inflation impacts in certain merchandise categories, partially offset by lower fuel sales due to deflation in this category. Net sales were negatively impacted by a decrease in fuel sales of $1.4 billion for the six months ended July 31, 2023. Sam's Club eCommerce sales positively contributed approximately 1.8% and 1.7% to comparable sales for the three and six months ended July 31, 2023, respectively, which was primarily driven by Curbside Pickup and Ship to Home.
Gross profit rate increased 135 and 88 basis points for the three and six months ended July 31, 2023, respectively, when compared to the same periods in the previous fiscal year. The increases in gross profit rate were primarily due to the lapping of higher supply chain costs and inventory write-downs in the previous year. The three months ended July 31, 2023 also increased due to the lapping of a larger inflation related LIFO charge recorded in the previous year.
Membership and other income increased 6.9% and 5.8% for the three and six months ended July 31, 2023, respectively, when compared to the same periods in the previous fiscal year. The increases were due to growth in our membership base, Plus penetration and renewals.
Operating expenses as a percentage of segment net sales increased 107 and 79 basis points for the three and six months ended July 31, 2023, respectively, when compared to the same periods in the previous fiscal year, primarily driven by lower fuel sales, elevated technology spend and higher facilities costs.
As a result of the factors discussed above, operating income increased $0.1 billion for both the three and six months ended July 31, 2023, when compared to the same period 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 dividends on our common stock and share repurchases. We believe our sources of liquidity will continue to be sufficient to fund operations, finance our global investment activities, pay dividends and fund our share repurchases for at least the next 12 months and thereafter for the foreseeable future.
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Net Cash Provided by Operating Activities
Six Months Ended July 31,
(Amounts in millions)20232022
Net cash provided by operating activities$18,201 $9,240 
Net cash provided by operating activities was $18.2 billion as compared to $9.2 billion for the six months ended July 31, 2023 and 2022, respectively. The increase is primarily due to moderated levels of inventory purchases and timing of certain payments.
Cash Equivalents and Working Capital Deficit
Cash and cash equivalents was $13.9 billion at both July 31, 2023 and 2022. Our working capital deficit was $17.2 billion as of July 31, 2023, which increased when compared to the $15.7 billion working capital deficit as of July 31, 2022, primarily driven by a decrease in inventories, as described above and an increase in accrued liabilities, partially offset by a decrease in short-term borrowings. 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, 2023 and January 31, 2023, cash and cash equivalents of $3.0 billion and $2.9 billion, respectively, may not be freely transferable to the U.S. due to local laws or other restrictions or are subject to the approval of the noncontrolling interest shareholders.
Net Cash Used in Investing Activities
 Six Months Ended July 31,
(Amounts in millions)20232022
Net cash used in investing activities$(9,909)$(8,584)
Net cash used in investing activities was $9.9 billion as compared to $8.6 billion for the six months ended July 31, 2023 and 2022, respectively. The increase of $1.3 billion for the six months ended July 31, 2023 is primarily the result of an increase in payments for property and equipment.
Net Cash Used in Financing Activities
 Six Months Ended July 31,
(Amounts in millions)20232022
Net cash used in financing activities$(3,309)$(1,400)
Net cash used in financing activities generally consists of transactions related to our short-term and long-term debt, dividends paid and the repurchase of Company stock. Transactions with noncontrolling interest shareholders are also classified as cash flows used in financing activities. Net cash used in financing activities was $3.3 billion as compared to $1.4 billion for the six months ended July 31, 2023 and 2022, respectively. The increase in net cash used in financing activities is primarily due to decreases in short-term borrowings, the purchase of certain noncontrolling interests and payments of long-term debt, partially offset by proceeds received from the issuance of long-term debt in fiscal 2024 and fewer repurchases of Company stock.
In April 2023, 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, 2023, all undrawn.
Long-term Debt
The following table provides the changes in our long-term debt for the six months ended July 31, 2023:
(Amounts in millions)Long-term debt due within one yearLong-term debtTotal
Balances as of February 1, 2023$4,191 $34,649 $38,840 
Proceeds from issuance of long-term debt— 4,967 4,967 
Repayments of long-term debt(4,063)— (4,063)
Reclassifications of long-term debt2,773 (2,773)— 
Other(4)(37)(41)
Balances as of July 31, 2023$2,897 $36,806 $39,703 
During the six months ended July 31, 2023, our total outstanding long-term debt increased $0.9 billion primarily due to the issuance of new long-term debt in April 2023, partially offset by the maturities of certain long-term debt. Refer to Note 4 to our Condensed Consolidated Financial Statements for details on the issuances and repayments of long-term debt.
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Dividends
Effective February 21, 2023, the Board of Directors approved the fiscal 2024 annual dividend of $2.28 per share, an increase over the fiscal 2023 annual dividend of $2.24 per share. For fiscal 2024, the annual dividend was or will be paid in four quarterly installments of $0.57 per share, according to the following record and payable dates:
Record DatePayable Date
March 17, 2023April 3, 2023
May 5, 2023May 30, 2023
August 11, 2023September 5, 2023
December 8, 2023January 2, 2024
The dividend installments payable on April 3, 2023 and May 30, 2023 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 during the six months ended July 31, 2023 were made under the current $20 billion share repurchase program approved in November 2022, which has no expiration date or other restrictions limiting the period over which the Company can make repurchases. As of July 31, 2023, authorization for $18.2 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, 2023 and 2022:
Six Months Ended July 31,
(Amounts in millions, except per share data)20232022
Total number of shares repurchased8.0 43.3 
Average price paid per share$147.18 $132.74 
Total amount paid for share repurchases$1,171 $5,747 
Purchase and Sale of Subsidiary Stock
During the six months ended July 31, 2023, the Company paid $3.5 billion to acquire shares from certain Flipkart noncontrolling interest holders and settle the liability to former noncontrolling interest holders of PhonePe. Additionally, during the six months ended July 31, 2023, the Company received $0.7 billion related to new rounds of equity funding for the Company's majority-owned PhonePe subsidiary.
Material Cash Requirements
Material cash requirements from operating activities primarily consist of inventory purchases, employee related costs, taxes, interest and other general operating expenses, which we expect to be primarily satisfied by our cash from operations. Other material cash requirements from known contractual and other obligations include opioid and other legal settlements, short-term borrowings, long-term debt and related interest payments, leases and purchase obligations.
Capital Resources
We believe our cash flows from operations, current cash position, short-term borrowings and access to capital markets will continue to be sufficient to meet our anticipated cash requirements and contractual obligations, which includes funding seasonal buildups in merchandise inventories and funding our capital expenditures, acquisitions, dividend payments and share repurchases.
We have strong commercial paper and long-term debt ratings that have enabled and should continue to enable us to refinance our debt as it becomes due at favorable rates in capital markets. As of July 31, 2023, the ratings assigned to our commercial paper and rated series of our outstanding long-term debt were as follows:
Rating agencyCommercial paperLong-term debt
Standard & Poor'sA-1+AA
Moody's Investors ServiceP-1Aa2
Fitch RatingsF1+AA
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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 6 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-captions "Settlement Framework Regarding Multidistrict and State or Local Opioid-Related Litigation," and "Other Opioid-Related Litigation," the Prescription Opiate Litigation, the Settlement Framework, and other matters, including certain risks arising therefrom. In Note 6, we also discuss, under the sub-caption "Asda Equal Value Claims" the Company's indemnification obligation for the Asda Equal Value Claims matter as well as under the sub-caption "Money Transfer Agent Services Matters" a United States Federal Trade Commission complaint related to money transfers and the Company's anti-fraud program and a government investigation by the U.S. Attorney's Office for the Middle District of Pennsylvania into the Company's consumer fraud prevention and anti-money laundering compliance related to the Company's money transfer agent services. We discuss various legal proceedings related to the Prescription Opiate Litigation, the Settlement Framework, DOJ Opioid Civil Litigation and Opioids-Related Securities Class Actions and Derivative Litigation; Asda Equal Value Claims; and Money Transfer Agent Services 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 Foreign Direct Investment matter in India 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." We also discuss an environmental matter with the State of California in Part II of this Quarterly Report on Form 10-Q under the caption "Item 1. Legal Proceedings," under the sub-caption "III. Environmental 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. As of July 31, 2023, there were no material changes to our market risks disclosed in our Annual Report on Form 10-K for the fiscal year ended January 31, 2023. 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, 2023, as filed with the SEC on March 17, 2023, 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. In the first quarter of fiscal 2024, we began implementing a new financial system, including our general ledger, in stages beginning in our U.S. and Canadian markets. This financial system is a significant component of our internal control over financial reporting. We will continue to implement other components of our new financial system in stages, and each implementation will impact our internal control over financial reporting.
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 significant change in the Company's internal control over financial reporting that occurred during the fiscal quarter ended July 31, 2023, 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: The Company is involved in a number of legal proceedings and certain regulatory matters, including responding to subpoenas and requests for information in connection with government investigations. 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 6 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 2,000 cases as of August 18, 2023. The liability phase of a single, two-county trial in one of the MDL cases against a number of parties, including the Company, regarding opioid dispensing claims resulted in a jury verdict on November 23, 2021, finding in favor of the plaintiffs as to the liability of all defendants, including the Company. The abatement phase of the single, two-county trial resulted in a judgment on August 17, 2022, that ordered all three defendants, including the Company, to pay an aggregate amount of approximately $0.7 billion over fifteen years, on a joint and several liability basis, and granted the plaintiffs injunctive relief. The Company has filed an appeal with the Sixth Circuit Court of Appeals. The monetary aspect of the judgment is stayed pending appeal, and the injunctive portion of the judgment went into effect on February 20, 2023. The MDL designated five additional single-county cases as bellwethers to proceed through discovery, though those bellwether plaintiffs have elected to participate in the Settlement Framework. The MDL may designate additional bellwethers of cases brought by healthcare providers and third-party payers. In addition, there are approximately 140 other cases pending in state and federal courts throughout the country as of August 18, 2023, as well as other cases in Canada against Wal-Mart Canada Corp. and certain other subsidiaries of the Company. The case citations and currently scheduled trial dates, where applicable, are listed on Exhibit 99.1 to this Quarterly Report on Form 10-Q.
Opioid Settlement Framework: On November 15, 2022, the Company announced that it had agreed to a Settlement Framework to resolve substantially all opioids-related lawsuits filed against the Company by states, political subdivisions, and Native American tribes (other than the single, two-county trial on appeal to the Sixth Circuit Court of Appeals as described above), as described in more detail in Note 6 to the Condensed Consolidated Financial Statements. The Company now has settlement agreements with all 50 states, including four states that previously settled with the Company, as well as the District of Columbia, Puerto Rico, and three other U.S. territories, that are intended to resolve substantially all opioids-related lawsuits brought by state and local governments against the Company. As described in more detail in Note 6 to the Condensed Consolidated Financial Statements, the Settlement Framework will become effective on September 6, 2023.
DOJ Opioid Civil Litigation: A civil complaint pending in the U.S. District Court for the District of Delaware has been filed by the U.S. Department of Justice (the "DOJ") against the Company, in which the DOJ alleges violations of the Controlled Substances Act 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. After the parties had fully briefed the Company's motion to dismiss, the DOJ filed an amended complaint on October 7, 2022. On November 7, 2022, the Company filed a partial motion to dismiss the amended complaint. The motion remains pending.
Opioids Related Securities Class Actions and Derivative Litigation: Three derivative complaints and two securities class actions drawing heavily on the allegations of the DOJ complaint have been filed in Delaware naming the Company and various current and former directors and certain current and former 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. Two of the derivative suits have been filed in the U.S. District Court in Delaware and those suits have been stayed pending further developments in other opioids litigation matters. The other derivative suit has been filed in the Delaware Court of Chancery. The defendants in the derivative suit pending in the Delaware Court of Chancery moved to dismiss and/or to stay that case on December 21, 2021; the plaintiffs responded by filing an amended complaint on February 22, 2022. On April 20, 2022, the defendants moved to dismiss and/or stay proceedings on the amended complaint. In two orders issued on April 12 and 26, 2023, the Court of Chancery granted the defendants' motion to dismiss with respect to claims involving the Company' s distribution practices and denied the remainder of the motion, including the Company's request to stay the litigation. On May 5, 2023, the Company's Board of Directors appointed an independent Special Litigation Committee (the "SLC") to investigate the allegations regarding certain current and former officers and directors named in the various proceedings regarding oversight with respect to opioids. The Board has authorized the SLC to retain independent legal counsel and such other advisors as the SLC deems appropriate in carrying out its duties. The derivative matter pending in the Delaware Court of Chancery is stayed until the SLC completes its investigation.
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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, purport to be 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 U.S. District Court in Delaware consolidated the class actions and appointed a lead plaintiff and lead counsel. The defendants moved to dismiss the consolidated securities class action on October 8, 2021. On October 14, 2022, plaintiffs filed an amended complaint, which revised the applicable putative class of investors to those who acquired Walmart stock from March 31, 2017, through December 22, 2020. On November 16, 2022, the Company moved to dismiss the amended complaint. That motion remains pending.
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: Ontario Provincial Council of Carpenters' Pension Trust Fund et al. v. Walton et al., DE Court of Chancery, 9/27/21.
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.
ASDA Equal Value Claims: Ms S Brierley & Others v. ASDA Stores Ltd (2406372/2008 & Others – Manchester Employment Tribunal); Abbas & Others v Asda Stores limited (KB-2022-003243); and Abusubih & Others v Asda Stores limited (KB-2022-003240).
Money Transfer Agent Services Litigation: Federal Trade Commission v. Walmart Inc. (CV-3372), USDC, N. Dist. Of Ill, 6/28/22.
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II. CERTAIN OTHER MATTERS
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, and can provide no assurance as to whether there will be a material adverse effect to its business or its Condensed Consolidated Financial Statements.
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 not to exceed $1 million.
In December 2021, the Office of the Attorney General of the State of California filed suit against the Company, bringing enforcement claims regarding Walmart's management of waste consumer products at its California facilities that are alleged to be hazardous. The suit was filed in Superior Court of Alameda County, California, Case No. 21CV004367, People v. Walmart Inc., and a trial date has been scheduled for April 22, 2024. The Company believes the suit is without merit and is vigorously defending this litigation matter. While the Company cannot predict the ultimate outcome of this matter, the potential for penalties or settlement costs could exceed $1 million. Although 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, the Company can provide no assurance as to the scope and outcome of this matter and no assurance as to whether there will be a material adverse effect to its business or its Condensed Consolidated Financial Statements.
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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, 2023, 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 our common stock under share repurchase programs authorized by the Company's Board of Directors. All repurchases made during the three months ended July 31, 2023 were made under the current $20 billion share repurchase program approved in November 2022, which has no expiration date or other restrictions limiting the period over which the Company can make repurchases. As of July 31, 2023, authorization for $18.2 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, 2023, 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, 20231,228,888 $149.93 1,228,888 $18.5 
June 1 - 30, 20231,017,996 153.38 1,017,996 18.3 
July 1 - 31, 2023910,249 156.80 910,249 18.2 
Total3,157,133 3,157,133 
(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
Security Trading Plans of Directors and Executive Officers
None of the Company's directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company's fiscal quarter ended July 31, 2023, as such terms are defined under Item 408(a) or Regulation S-K.
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 6 to those Condensed Consolidated Financial Statements regarding the possible outcome of, and future effect on Walmart's financial condition and results of operations of, certain litigation and other proceedings to which Walmart is a party, the possible outcome of, and future effect on Walmart's business of, certain other matters to which Walmart is subject, including the Company's Opioids Litigation, the Settlement Framework, Walmart's ongoing indemnification obligation for the Asda Equal Value Claims, as well as the Company's Money Transfer Agent Services Matters and the liabilities, losses, expenses and costs that Walmart may incur in connection with such matters;
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in Part I, Item 2 "Management's Discussion and Analysis of Financial Condition and Results of Operations": statements under the caption "Overview" 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 macroeconomic factors such as geopolitical conditions, supply chain disruptions, volatility in employment trends, and consumer confidence; statements under the caption "Overview" relating to the possible impact of inflationary pressures and 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 - Growth" regarding our strategy to serve customers through a seamless omni-channel experience; statements under the caption "Company Performance Metrics - Margin" regarding our strategy to improve operating income margin through productivity initiatives as well as category and business mix; statements under the caption "Company Performance Metrics - Returns" regarding our belief that returns on capital will improve as we execute on our strategic priorities; 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 activities, pay dividends and fund share repurchases; a statement under the caption "Liquidity and Capital Resources - Liquidity - Net Cash Used in Financing Activities - Dividends" regarding the payment of annual dividends in fiscal 2024; 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, short-term borrowings and access to capital markets continuing to be sufficient to meet its anticipated cash requirements and contractual obligations, 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": 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;
inflation or deflation, generally and in certain product categories;
transportation, energy and utility costs;
commodity prices, including the prices of oil and natural gas;
changes in market levels of wages;
changes in the size of various markets, including eCommerce markets;
unemployment levels;
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;
the financial and operational impacts of our investments in eCommerce, technology, talent, and automation;
COVID-19 recovery related challenges, including supply chain disruption and production, labor shortages and increases in labor costs;
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 or changes in levels of other public assistance payments;
changes in currency control laws;
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, 2023 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, 2023, formatted in Inline XBRL (included in Exhibit 101)

*Filed herewith as an Exhibit.
**Furnished herewith as an Exhibit.
(C)This Exhibit is a management contract or compensatory plan or arrangement

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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 1, 2023By:/s/ C. Douglas McMillon
C. Douglas McMillon
President and Chief Executive Officer
(Principal Executive Officer)
Date: September 1, 2023By:/s/ John David Rainey
John David Rainey
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
Date: September 1, 2023By:/s/ David M. Chojnowski
David M. Chojnowski
Senior Vice President and Controller
(Principal Accounting Officer)

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