Walmart U.S. Wal-Mart Stores, Inc. (NYSE: WMT) 18th Annual Meeting for the Investment Community. Bill Simon. President & CEO, Walmart U.S.

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1 Walmart U.S. 18th Annual Meeting for the Investment Community Bill Simon President & CEO, Walmart U.S. 1

2 Today s speakers Johnnie Dobbs EVP Logistics Duncan Mac Naughton EVP CMO Joel Anderson President Walmart.com Karen Roberts EVP & President Realty 2

3 U.S. business review bps sales 1 Implementing our strategy Confidence in our plan Assortment initiatives +100 bps traffic 2 1 Average contribution to comp sales over the last 3 months 2 Comp improvement calculated Q3 YTD vs. Q1FY12 Food traffic improvement Note: All bps references are on the calendar 3

4 Walmart U.S. strategic growth plan 1 Price investment through productivity improvements 2 Merchandising improvements 3 Multi-channel strategy that leverages existing assets 4 Market share-driven real estate strategy 4

5 Walmart business model EDLP EDLC Broadest assortment Everyday low prices across the box Operating at the lowest cost possible Delivering one-stop shopping 5

6 Walmart U.S. strategic growth plan 1 Price investment through productivity improvements 2 Merchandising improvements 3 Multi-channel strategy that leverages existing assets 4 Market share-driven real estate strategy 6

7 Gross margin and SG&A trends are not sustainable GM % Walmart U.S. GM and SG&A as percentage of sales Significant rise in SG&A and prices over past 10 fiscal years SG&A % FY Note: Performance based Walmart fiscal years 7

8 Over $2B price investment in next 2 years* Price reductions funded by Productivity improvements Broad application Long-term investment starting now Lead with trafficdriving categories Grow Sales Operate for less Sell for less Buy for less Lower new store and remodel costs Productivity in stores and DCs Efficiency in transportation, ISD and marketing * Represents FY13 and FY14 8

9 Logistics continues to deliver savings Cases transported (M) Miles driven (M) Productivity initiatives Cases per trailer Routing improvements Packaging 335 million more cases shipped 300 million fewer miles driven FY08 FY09 FY10 FY11 FY12 E Note: Performance based on Walmart fiscal years 9

10 One-touch bringing additional efficiencies Aligning work schedules to daily tasks Category-sorted dry grocery pallets Enhanced backroom sorting 10

11 Over $2B price investment in next 2 years* Price reductions funded by Productivity improvements Broad application Long-term investment starting now Lead with trafficdriving categories Grow Sales Operate for less Sell for less Buy for less Lower new store and remodel costs Productivity in stores and DCs Efficiency in transportation, ISD and marketing * Represents FY13 and FY14 11

12 Walmart U.S. strategic growth plan 1 Price investment through productivity improvements 2 Merchandising improvements 3 Multi-channel strategy that leverages existing assets 4 Market share-driven real estate strategy 12

13 Merchandise principles making an impact 13

14 EDLP: foundation and customer commitment Committed to price leadership Foundation of our business model and merchandising approach Benefits all stakeholders Provides consistency, customer trust, long-term loyalty and growth 14

15 More than 10,000 items returned to shelves Added back key brands Dry grocery Consumables Dairy, Deli, Frozen, Pets Health & Wellness Hardlines Entertainment Home Apparel Increased assortment within existing brands Expanded store-item combinations Completed Completed In progress Continue to review assortment to meet customer needs Note: Presented at Analyst meeting 10/12/

16 On shelf availability focus driving sales 570 bps Mar 19 Current fiscal year Sept 30 Note: Performance improvement from March 19 Sept 30,

17 Merchandise density driving top line sales Action alley restored Raised shelf heights Increased modular space 17

18 Food business gaining momentum Food comp trend EDLP and assortment resonating with customers Continuing improvement in traffic across broad customer groups Inflation being offset with trade-down Q1 FY12 Q2 FY12 Q3 FY12 E Note: Performance on calendar basis 18

19 Impact of the economy seen in our customers trade-down choices Private label Private label and smaller sizes Branded for $0.82 GV for $0.60 Branded GV GV -7% +24% -11% -4% +2% Note: Performance based on Q2 TY vs. Q2 LY on a calendar basis 19

20 Density and simplicity in hardlines Hunting +16% comp Tires +7% comp Fishing +9% comp Note: Tires comp is YTD, Hunting and Fishing is season to date 20

21 Apparel strengthening the foundation Simplifying the assortment Basics Adding and growing national brands Key line focus Improving store experience Block merchandising Focusing on big box merchandising Simplified assortment for core customer 21

22 Apparel basics showing positive results Underwear +6% comp Socks +8% comp Jeans +5% comp Note: September comps on calendar basis 22

23 Apparel delivering 600 bps of comp trend improvement Apparel comp sales Add-backs in plus and mature ladies categories performing well Overall assortment improvements across apparel driving results Q3 FY11 Q4 FY11 Q1 FY12 Q2 FY12 Q3 FY12 E Note: Performance on calendar basis 23

24 Home emphasis on basics and value Focus on basics Assortment true to Walmart customer Drive volume selling items 80/20 item focus Rationalize private brands Strengthen OPP presence and quality Block merchandising National brands + quality 24

25 Entertainment focus on value and immediacy Deliver value with OPP Win in declining categories Win in innovation and new releases Drive consumables and attachments Simple and focused Leverage multi-channel 25

26 Holiday 2011 plan Layaway Ad Match Black Friday Item & price Fresh focus 26

27 Top toys for Christmas

28 Marketing for the holidays TV & Radio Large share of voice in national television Circulars, FSIs & catalogs 7 tabs, 10 free standing inserts Toy catalog Holiday entertaining guide Apparel guide Online & in-store events Facebook cadence Digital banner In-store events Layaway is back! TV Radio PR FSIs Facebook 28

29 Walmart U.S. strategic growth plan 1 Price investment through productivity improvements 2 Merchandising improvements 3 Multi-channel strategy that leverages existing assets 4 Market share-driven real estate strategy 30

30 Multi-channel advantage Assortment Distinctive Walmart Access Multi-channel Assortment growth to complement stores Channel optimization tools Align incentives around customer Access to underpenetrated markets Next day delivery Focused marketing with geo-targeting Fulfillment Free, fast delivery options Reduced fulfillment costs and time Leverage existing assets for flexibility 31

31 Fast, faster, fastest for free Leverage assets to lower costs and save customers money Flexibility for the way customers want to shop or receive items Multi-channel capabilities that others can t match 32

32 Mobile enables a multi-channel experience Browse your local store Plan your store visit Transact with optimized checkout ipad launch Smart shopping lists Mobile 33

33 Walmart U.S. strategic growth plan 1 Price investment through productivity improvements 2 Merchandising improvements 3 Multi-channel strategy that leverages existing assets 4 Market share-driven real estate strategy 34

34 Significant growth opportunity remains Real Estate Strategy Fill-in medium/ high share markets Penetrate low share markets Smaller formats Convert discount stores (expansion/ relocation) Maintain the fleet (remodel) 35

35 Supercenters remain best vehicle to capture market share New stores, relocations, and expansion growth opportunities Shifting capital from remodels, while maintaining the condition of the fleet Continue to reduce new store construction costs 36

36 Neighborhood Market strong performance NM showing sales and profit growth 5 consecutive quarters of positive comp sales and traffic growth* NM financial returns approaching that of supercenters * Note: Based on calendar through Q2 FY12 37

37 Walmart Express delivering strong early sales Walmart Express in initial pilot stage Stage 1 Stage 2 Stage 3 Sales? Scalable?? Accelerate Rollout Initial pilots under way and sales results exceeding expectations Sales and operating performance will determine speed of rollout 38

38 Bringing the Walmart promise to customers 39

39 Walmart U.S. capital expenditure ($ in billions) CapEx Detail FY11 Actual FY12 Estimate FY13 Projection New Stores $2.7 $3.8 - $3.9 $4.8 - $5.0 Remodels $3.0 $1.3 - $1.5 $0.5 - $0.6 Logistics $0.7 $0.6 - $0.7 $0.3 - $0.4 Other $0.9 $0.8 - $0.9 $0.4 - $0.5 Total Walmart U.S. $7.3 $6.5 - $7.0 $6.0 - $6.5 Additional Walmart U.S. Sq. Ft. 11M 10M - 11M 14M - 15M Total Walmart U.S. Unit Growth

40 Walmart U.S. key takeaways 1 Price investment through productivity improvements 2 Merchandising improvements 3 Multi-channel strategy that leverages existing assets 4 Market share-driven real estate strategy 41

41 18 th Annual Meeting for the Investment Community 42