《沃尔玛（WALMART）1980-2000年年度报告-财报合集（英文版）.zip》由会员分享，可在线阅读，更多相关《沃尔玛（WALMART）1980-2000年年度报告-财报合集（英文版）.zip（0页珍藏版）》请在三个皮匠报告上搜索。

1、A global brand:Hometown values circle the globeFuture StockFuture StockPrice Plus!The value of SAMS ClubmembershipMessage fromMiss HelenSupercenters:tomorrows success storesavailable exclusively atKeeping theFUNinQUALITY&VALUE!Every DAYKeeping theFUNinQUALITY&VALUE!Every DAY1TABLE OF CONTENTS2Presid

2、ents Message4Inside Track9Rebirth in VermontWal-Mart anchors revitalized downtown9Making miraclesOur associates own “Childrens Miracle”10 Letters11 Trivia12 Magic WandLife in the technological fast lane14 Everybodys HometownWal-Mart culture drives international growth16 The Future of RetailingSuperc

3、enters lead way to 21st century20 The Value EquationBuilding membership benefits at SAMS ClubFINANCIALS2211 Year Financial Summary24Managements Discussion and Analysis26Consolidated Statements of Income27Consolidated Balance Sheets28Consolidated Statements of Shareholders Equity29Consolidated Statem

4、ents of Cash Flows37 Corporate InformationAbout the coverTracey Murphy, her father Bob Brown and her husband DaleMurphy are all managers with Wal-Mart and dont forget herbrother, mother-in-law and brother-in-law! For more on Traceyand her Wal-Mart family, see page 16.Looking upWal-Marts latestyear w

5、as record-shattering . and thebest is yet to come,David Glass says inthe PresidentsMessage. See page 2.Star power!Washington powerhouse(and sculptor) PaulaStern is just one of thenotables who lend theirknow-how to Wal-MartsBoard of Directors. SeeInside Track, page 4.Cutting edgestate-of-the-arttechn

6、ology is akey competitiveadvantage forWal-Mart. Seepage 12.Wal-Marts worldAgnes Seto is “having much morefun” now that Wal-Mart hasexpanded to Canada not to mention six other countriesworldwide. See page 14.P R E S I D E N T S L E T T E Ral-Mart has a history of risingto the challenge. After a disap

7、pointing year in fiscal1996, our associates respondedwith a solid performance in fiscal 1997. Sales for the fiscalyear approached $105 billionand earnings topped $3 billion.Each operating division generated higher comparablesales growth and improvedoperating margins. Our Wal-Mart operations experien

8、cedsome of the best customerapproval scores in our historyand SAMS Club showed solidimprovement in comparablesales, membership, merchan-dise selection and income.Asset management and cashflow were key themes this year.We generated over $3 billion infree cash flow and increasedour return on assets. W

9、ith thegrowth in the Companys cashflow, we now can finance ouraggressive capital expendituresprogram internally and stillhave excess cash available fordistribution to our shareholders.This strong sustainable cashflow allowed us to announcetwo actions to enhance shareholder value. The first wasto inc

10、rease our dividend by 29%and the second was to increasethe size of our share repurchaseprogram with the intent torepurchase up to $2 billionworth of stock over the next 12 to 18 months.Our first priority remainsprofitable internal growth. Future increases in the dividend and repurchase program will

11、depend on the availability of our growthopportunities.2WFUTURE STOCKCEO David Glass looks forward to a world of future prospects.FUTURE STOCKBuilding shareholder valueDIRECTORS:Paul R. CarterJohn A. Cooper, Jr.Stephen FriedmanStanley C. GaultDavid D. GlassFrederick S. HumphriesE. Stanley KroenkeEliz

12、abeth A. SandersJack C. ShewmakerDonald G. SoderquistPaula SternJohn T. WaltonS. Robson WaltonChairman of the BoardS. Robson WaltonChief Executive OfficerPresidentDavid D. GlassVice ChairmanChief Operating OfficerDonald G. SoderquistExecutive Vice PresidentPresident, Wal-Mart RealtyPaul R. CarterExe

13、cutive Vice President - OperationsThomas M. CoughlinExecutive Vice President - Specialty DivisionDavid DibleExecutive Vice PresidentPresident - SamsJoseph S. Hardin, Jr.Executive Vice PresidentPresident - InternationalBob L. MartinExecutive Vice PresidentChief Financial OfficerJohn B. MenzerExecutiv

14、e Vice President - MerchandisingH. Lee Scott, Jr.Executive Vice President - SupercenterNick WhiteSecretary, General CounselRobert K. RhoadsTreasurerTerri BertschyThe significant increase inboth the dividend and the share repurchase programdemonstrate our confidence in the Companys future earn-ings a

15、nd cash flow growth. We believe our double digitearnings growth combined withthe new shareholder initiativeswill allow us to achieveour targeted annualtotal shareholder returnof 15%.In June of 1990, at ourannual shareholdersmeeting, Sam Waltonpredicted Wal-Martwould reach $100 billionin sales by the

16、 year2000. At that time, wethought the goal wasquite a stretch. After all,it took us 10 years to reach $100 million and another 7 toreach our first billion. But ourstrength has always been ourdedicated associates, their abilityto work together, and the support of our loyal customers.So 3 years ahead

17、 of schedule,we reached that goal.Even though we exceededthat lofty goal, there is stillplenty of room left to grow. In the United States, Wal-Martholds only 7% of a $1.4 trillionretail market. That leaves atremendous opportunity forfuture growth.The supermarket industry,amounting to $425 billion ay

18、ear, is a great opportunity forcontinued growth. Its almostthree times the size of the discount store industry, whereWal-Mart is one of the threeretailers that, combined, holdalmost 85 percent of the market.Yet in the grocery segment, thetop five players constitute lessthan 25%. Then there is the re

19、st of theworld. Our international division reported sales inexcess of $5 billion and theseoperations could represent 10 percent of our total sales inthe next 5 years.The international divisionwas profitable for the year withCanada and Puerto Rico showing excellent results andMexico achieving profita

20、bilityin a difficult economy.Only three years after acquiring the Woolco stores inCanada, Wal-Mart has becomeCanadas highest volume discount retailer and in Mexicoour joint venture is also thecountrys largest retailer.The value our customersrespond to in the United Statesis enthusiastically received

21、wherever we go. In China,where we recently opened ourfirst units, the people alreadyknow what Wal-Mart is allabout. Our three storySupercenter had 80,000 visitorson its first Saturday.With over 300 locations andmore than 50,000 associatesoutside the United States, Wal-Mart has become a trueglobal br

22、and name, with worldwide appeal resemblingCoca-Cola or McDonalds. The Wal-Mart way of doingbusiness makes us one of the worlds most recognizablecompanies - which translates to loyal customers and steadyprofitable growth.Wal-Mart associates haveevery right to be proud of whatweve built, from our very

23、 firststore to todays worldwide network of nearly 3,000stores and clubs. Were thecompany that worksbecause of our people - theassociates who make ithappen every day.So if anyone wonderswhere our next $100 billion will come from itwill come from customerswho recognize value throughout the world and f

24、rom our associates whowill deliver it with a smile.I am really excited about the next year. We have so muchopportunity and our team isfocused on continuing to serveour customers in such a waythat clearly indicates they arethe boss. But more importantly,they are focused on value.Value to our customer

25、s andvalue to our shareholders.3In June of 1990, SamWalton predicted Wal-Martwould reach $100 billion insales by the year 2000. Atthat time, we thought thegoal was quite a stretch. 4INSIDE TRACKPaula Stern advises PresidentClinton on international trade policyand is chairwoman of the AdvisoryCommitt

26、ee of the U.S. Export-Importbank. Shes an important figure inWashington. But theres also an artistic side to this former chairwoman of the InternationalTrade Commission. Stern loves tosculpt in clay, especially busts offamily members. If she werent aninternational trade consultant, Sternsays, shed s

27、pend her days in artisticpursuits. “Instead of intellectualizing,Id be reading a lot more poetry andlistening to a lot more individualexpression,” she says. She also wouldspend more time with her familybefore her children leave the nest.Frederick Humphries bought his Prince tennisracket at Wal-Mart,

28、 along with another importantoutdoor item. “I have found a wonderful barbecuegrill,” he says. “I like the quality of goods there.”Humphries, the president of Florida A&MUniversity in Tallahassee since 1985, also likes the “upbeatness” of Wal-Mart associates. Humphriesis pretty upbeat himself about W

29、al-Marts community involvement and associate recruitmentprograms, and its efforts to create jobs.Artistry helps consultant sculpt trade policyWal-Mart is welcoming:Values are the ties that bind ourextended familyA sense of community draws Paula Stern to Wal-Mart. The Washington, D.C.-based internati

30、onal trade consultant feels at home shopping at Wal-Mart, where the associates arefriendly and the customers diverse. “Wal-Mart is so inclusive,” she says.Stern, one of nine outside directors on the Wal-Mart board, is proud to be associated with the company because of its positive impact. “In signif

31、icant ways, Wal-Mart has affected thestandard of living of American families,” agreesdirector Betsy Sanders, a management consultant.Heres an inside look at the values these important members bring to our Wal-Mart family.5Stephen Friedman, senior chairman and limited partner ofGoldman Sachs & Co., e

32、quates Wal-Mart with excellence.The company constantly strives to satisfy customers andrefuses to settle for “good enough,” he says. “It is one of thevery few companies in the world which has genuinelysparked a revolution.” Besides his position on the Wal-Martboard, Friedman holds leadership roles i

33、ncluding vicechairman of the Columbia University trustees and executivecommittee chairman of the Brookings Institution.Cant beat the upbeat.A personal search for excellenceVision, mission and camaraderieJack Shewmaker somehow finds time to fish in thePatagonia Mountains of SouthAmerica, consult with

34、 retail,distribution and manufacturingcompanies in South Africa,Australia and Asia, and ski with his grandchildren. He announced his “semi-retirement” from Wal-Mart in 1988 after 18 years with ourcompany, during which herose from district manager toVice Chairman and ChiefFinancial Officer. “I starte

35、dthere when Wal-Mart wassmall, with $30 million in sales,” he says. “No oneimagined it would be as big asit is today.” Shewmaker, namedone of the 10 Most InfluentialPeople in Mass Retail Today by Discount Merchandiserin 1997, says Wal-Mart is a phenomenon that grew from “a desire to do something dif

36、ferent, better, and more efficiently with a sense of vision,mission, and camaraderie.”6INSIDE TRACKStan Kroenke. Retailing has been part of StanKroenkes life since he swept out his fathers hard-ware store as a child. Kroenke later worked inretail to put himself through college and graduateschool. “B

37、eing exposed to people like Bud and SamWalton had a major impact on my life,” Kroenkesays. Today, he owns the Kroenke Group, a nation-al investment, development, and commercial realestate company based in Columbia, Missouri. Hesalso co-owner of the St. Louis Rams football team.“Expanding into the sp

38、orts business has been aninteresting and challenging experience,” he says.Hobbies? Service is his hobby!Elizabeth A. “Betsy” Sanders needs solitude tomeditate, write and “be a friend,” to balance outher heavy business and community commitments. Thats why she left corporate life in 1990 to formThe Sa

39、nders Partnership, a consulting firm.Sanders and her family live near the Sierra Nevada mountains in northern California. Beforeheading for the hills, Sanders was vice presidentand general manager for Nordstrom Inc., earningnational recognition as an expert on customer service. Shes always admired W

40、al-Mart for lowprices, top-quality products and, yes, customer service. This, she says, helps American familiesstretch their dollars for other goods and improvestheir standard of living. “Theres nothing ordinaryabout this company,” she says.Family, friendship firstJohn Cooper, chairman of the Arkans

41、asland development company, CooperCommunities Inc., could retire and take the time to enjoy the beauty of the Arkansasoutdoors. But theres no golfing or fishing or other leisurely pursuits for Cooper, whobelieves one of his most important roles isserving the community. “I really think all a person c

42、an do is to be helpful to somebody,” he said. Cooper has helped his neighbors and helped protect the outdoors as a founding member of theArkansas Nature Conservancy. When hesnot lending his experience to the Wal-Martboard, he also serves on the boards of J.B. Hunt and Entergy Corp. Raised on retaili

43、ngThe modesty of a man whos reached the topStanley Gault, retired chairman ofthe Goodyear Tire & Rubber Co. and,before that, Rubbermaid Inc., hasbeen honored by countless businessgroups and publications such asFortune magazine. Perhaps mostnotably, two years ago he was namedInternational Executive o

44、f the Year by Brigham Young University for his leadership and high moral and ethical standards. In addition, he brings the perspective of Wal-Marts vendor-partners to ourboard. Despite the accolades hesreceived, Gault is modest about his role at Wal-Mart. “I hope to use my almost 50 years of (busine

45、ss)experience to the benefit of Wal-Mart associates, customers and shareholders,” he says.John Walton likes to have his“old van worked on” in the Wal-Mart automotive departmentwhile he shops. Walton enjoys the associates at his local Wal-Mart theyre almost family.“Ive grown up with the company,”says

46、 the son of founder Sam Walton. In fact, John Waltonwas Wal-Marts second pilot (Sam was No. 1). Johns currentbusiness interests include invest-ments in small companies in awide variety of industries. As heconsiders American business,Walton is convinced that Wal-Marthas been a positive force becauseo

47、f its integrity, customer service,and its “influence on the shoppingexperience.” Before Sam Waltondied, John told him that “what he had done went far beyond Wal-Mart to make American business better.” When hes notinvolved with business, JohnWalton is working to make a difference in American educatio

48、n. Making business better7When it comes to getting the highest quality and the best values,Wal-Mart is the do-it-yourselfers best friend. Available exclusively at Wal-Mart,Popular Mechanics-brand hand tools are a household name when it comes to car repairs, home remodeling and just about any project

49、 in between. Thats becausePopular Mechanics tools are made to last and backed by a lifetime guarantee.From socket sets, wrenches and screw drivers to hammers, drills, extension cords and moreyou name it, Wal-Marts got the tools you need to get the job done right.Hand ToolsThat Are Popular With Mecha

50、nicsHand ToolsThat Are Popular With Mechanics“Phenomenal” is a word JeffWennberg uses a lot especiallywhen hes talking about Wal-Mart.Wennberg is the mayor ofRutland, VT, where a Wal-Martstore that opened this January is the linchpin of an eight-yeardowntown revitalization project.“Wal-Mart has been

51、 betterthan expected for us, and wehad extraordinarily high expectations,” Wennberg said.Rutland, population 18,000, is the second-largest city inVermont. Because its businessdistrict serves a sizable surrounding region, downtownRutland is “about what youdexpect for a city of 60,000,”Wennberg said.O

52、r anyway, it is now thanksto the redevelopment project and Wal-Mart.“Eight years ago, downtownRutland was perceived as beingin a serious decline,” Wennbergsaid. “Thered been no significantprivate-sector investment in quitesome time. Downtown was suffering a slow death.”Rutlands central businessdistr

53、ict, built around 20 acres of railroad yards, was focused on an aging, 1960s-vintage strip center.Then began years of planningto revitalize the citys core.When the Wal-Mart lease wasannounced as the anchor of the project, the Rutland DailyHerald wrote in an April 1996 editorial:There is a feel of li

54、fe on the streetsof downtown Rutland that isnew. It is the result of all these developments. It is the payoff for years of work by numerous people in the community who have refused togive in to drift and defeatism.With the new Wal-Mart, ofcourse, Rutland added 140 newjobs and learned the Wal-Martway

55、 of doing business.“Their philanthropy is legendary, not to mention theirinvolvement in the community,”Wennberg said. “What Wal-Martrepresents is economic prosper-ity and growth in our centralbusiness district, because theyare such a phenomenal draw.The Wal-Mart opening is thejewel in our crown.” 9G

56、OOD NEIGHBORSWal-Mart helps set downtown on the right trackTHE JEWEL IN OUR CROWNRebirth in Rutland: From left to right, Mayor Jeff Wennberg and Wal-Martassociates Chet Landon, Gail Scribner and Brenda Heath proudly show off a revitalized downtown.Associates HelpMake MiraclesWal-Mart Sponsors Childr

57、ens Miracle NetworkTaylor Dippery is no ordinaryWal-Mart associate. At Store#1607 in Lewistown, PA, theassociates consider little Taylortheir special miracle.At 18 months of age, Taylorlearned to walk at Wal-Mart.Using her special walker, shenow scoots all over the storewith her grandfather, wearing

58、her honorary associates nametag and giving smiles and greet-ings to everyone she passes.It was a hospital in theChildrens Miracle Network(CMN) that made it possible for Taylor to get around, andStore #1607 did its part to help.Last year, that stores associatesraised $20,500 for their localCMN hospit

59、al, and helped hundreds of children like Taylor.Wal-Mart associates haveraised more than $71 million forCMN since Wal-Mart becameofficial retail sponsor in 1988. In calendar 1996, Wal-Martdonated $14.3 million, or 10 per-cent, of the $143 million raisedin the entire CMN campaign.“Associate” Taylor D

60、ippery10THE “CLAM JUNIOR“I am writing because of an experience that I shall always remember with a smile.This experience involved manydifferent Wal-Mart associates in various Wal-Mart stores.After making many callssearching for an ice fishing shelter, the “Clam Junior,” I reached Dan Curtis at theCo

61、ncord, NH, store. At 8:45 in the evening, this gentleman without reservation and with total willingness, washelping me and then apologizedbecause he would have to callme back in 15 minutes. As promised, the phone rang at 9 p.m. Dan Curtis was return-ing my call with not only thestore locations, but

62、with all thephone numbers and the quantitythat each store might still have. The actions and reactions of these employees display theessence of a quality organization.Very Sincerely,Linda A. BettiMendon, MAWAL-MART DELIVERSOn 1-9-97 I went to Wal-Martin Chula Vista to purchase a ping-pong table. Juan

63、 Wood, an employee in sporting goods,assisted me. I told him I did nothave a truck to transport thetable. He spoke to his manager,Don Olson, to see if they coulddeliver it.On 1-10-97 Juan Wood andDon Olson delivered the table to my residence.This was an extreme act ofcustomer service, beyond thecall

64、 of duty. For this excellentservice (that did not have tohappen), Wal-Mart has earned afaithful shopper in me.Sincerely,Roberta DeLeonChula Vista, CAGUARDIAN ANGELI am writing this letter to commend one of your assistantmanagers, Ms. Sue Cantu. She went well above andbeyond what any store managerwou

65、ld normally do to help me.The heat had been out all dayin my granddaughters dormroom, and the temperature was in the teens. I tried callingthe residence hall; but theywere closed because of theweather. I then thought of theWal-Mart Store in Waco I suppose because our localWal-Mart is so helpful to o

66、ur community.I called Ms. Cantu and asked if there was any way she couldhelp. She was shorthandedbecause of the weather; butwithin the hour, she had delivered two blankets and an electric heater to the dorm.Saint Augustine said, “Everyvisible thing in the world is put in charge of an angel.” Ms. Can

67、tu is truly an angel.Sincerely,June ArnoldCarthage, TXLETTERSA HISTORY OF CHANGERecently, Helen Walton took a moment to share her thoughtson Wal-Marts focus, leadershipand legacy:“As our Company has grown,questions have come up aboutwhere Wal-Mart is going and ifSam would approve,” Helen said. “I be

68、lieve he would. I feel goodabout our leadership, especially in this last year. People haveaccepted the fact that there is newleadership and they are doing agood job. I think their stewardshiphas been absolutely marvelous,”she said.“We need to continue to emphasize putting the customerfirst. Everyone

69、 has a customer andthey need to see that the peopleneeding information or attentionare getting it. Another thing thatSam always said was respect theindividual. That is so important.“Never fail to be open to changewhen there are ways to improvewhat youre doing,” Helen said.“We cant say, Thats not the

70、 waywe do it. The world is changingtoo fast. Weve got to be ready tochange with it.“If we keep these things in mind,Wal-Mart is going to keep growingand getting better,” said Helen.Helen Walton, Wal-Marts First Lady1.Where is the first Wal-Mart located?2.Wal-Marts first people greeter was in which s

71、tore?3.What charity receivesmoney from sales ofSams American Choiceproducts?4.Where did Sam and Helen meet?5.Wal-Mart first hit $1 billion in profits in what year?6.What year was Sam Walton born?7.What year did Sam write his autobiography?8.Sam was presented with the Presidential Medal of Freedom in

72、 what year?9.What year did Sam dothe Hula on Wall Street?10. How much did Wal-Mart Store #1 do in its first year of operation?11. Name Sams favorite dog.12. What did Wal-Mart stock actually sell for the very first day it was traded?13. What year did the first Wal-Mart open?14. What year did Wal-Mart

73、 become a publicly owned company?15. Wal-Mart satellite network began broadcasting in what year?16. SAMS Club was started in what year?17. Helen Walton holds a B.S. in what field?18. What percentage of sales goes to run the entire general offices, from the chairman of the board to the secretaries?19

74、. Who came up with theidea of profit sharing?20. Sam thought about running for what political office?Did you know?Companywide, Wal-Mart recycles over 700,000 tons of cardboard, paper and plastic each year.Wal-Mart sold about 80 million Valentine cards this February across the United States.Wal-Mart

75、is the largest private sector employer in the United States.Wal-Marts Private Fleet drives more than 1 million miles a day.Making this happen requires the purchase of more than $50 millionof fuel a year.Answers 1. Rogers, Arkansas. 2. Crowley, Louisiana. 3. Competitive Edge Scholarship Program. 4. I

76、n a bowling alley. 5. 1990. 6. 1918. 7. 1992. 8. 1992. 9. 1984. 10. $1 million. 11. Old Roy. 12. $16.50. 13. 1962.14. 1970. 15. 1983. 16. 1983. 17. Finance. 18. 2%. 19. Helen Walton. 20. President of the United States.Now,no matter where youshop or what you buy, you cantake advantage of Wal-Martsleg

77、endary savings and value.With the Wal-Mart MasterCardfrom Chase you pay no annualfee and a low 14.48% APRfixed rate for purchases. Plus, save even more with our low 9.9% fixed APR on transferred balances. Best of all, the Wal-Martname is recognized around the world. So, you can useyour new MasterCar

78、d at morethan 13 million locations. Dont wait to get great Wal-Mart savings every day,apply in the store or call: Wal-Mart SavingsEVERYWHEREY ou Shop1 - 8 0 0 - 8 5 8 - 3 1 0 0TRIVIATECHNOLOGYt any given moment, a typicalWal-Mart Discount Store hasmore than 70,000 standarditems in stock. Every one o

79、fthem has to be identified, ordered,inventoried and replenished. A typical Supercenter is eventougher to stock, since it alsocarries more than 20,000 additional grocery items, a lot of them perishable. So theyhave to be reordered frequently,sometimes daily.So how do we do it? We wave a magic wand!Th

80、at “magic wand” is actually a handheld computer, linked by a radio-frequency network toin-store terminals. Its a high-techconduit to an internal informationsystem that gives every associatea window on the world of Wal-Mart merchandise. There are “magic wands,”sometimes dozens of them, in the hands o

81、f associates atevery Wal-Mart store. They helpus keep up-to-the-minute trackof the inventory on hand, deliveries and backup mer-chandise in stock at Wal-Martdistribution centers.The computerized wands are amazing enough, “seeingthrough walls” to find what ourcustomers want, when they wantit. But tha

82、ts just the proverbial tipof Wal-Marts high-tech iceberg.“What its really about isputting information in peopleshands,” said Randy Mott, Senior Vice President and Chief Information Officer. “Were carefulnot to get tooenamored with all the bells and whistles of technology. Its there to support people

83、.”With an annual technologyand communication budget of$500 million and an informationsystems staff of 1,200, Wal-Mart12A“Space age”technology helpskeep Wal-Mart in front on price and serviceThe magic wand gives our associates a window on a world of Wal-Mart merchandise.MAGIC WANDMAGIC WANDleads the

84、industry in informationtechnology and were notslowing down. We know ourfuture earnings growth has to come not just from increasedmarket share, but from increasedproductivity. That means Wal-Mart is dedicated to givingevery associate the technologicaltools to work smarter every day.But this is Wal-Ma

85、rt, werenot just developing technologyfor technologys sake. Our investments in systems are measured in terms of their effectiveness for ourstores and customers.“With this technology,were getting better,quicker and more accurate information to manageand control every aspect of ourbusiness,” Mott said

86、. “Wal-Marthas always been intensely conscious of holding downexpenses, because thats another way we can have lowerprices, better merchandise andservice for our customers andbetter returns for our investors. “We may be talking aboutstate-of-the-art computer systems, but the way we managethem is pure

87、 Wal-Mart.”In the world of informationtechnology, Wal-Mart has longbeen known as a leader. Earlierthis year, we were recognizedby Computerworld andSmithsonian Magazine as oneof the top five innovators in information technology within business. The award recognized the Retail Link system, whichprovid

88、es sales data by item, by store, by day to our vendor-partners. That helps suppliers save time andexpense in planning their production and distribution,which translates to lower merchandise costs.For another example of leveraging technology, Mott mentioned the item locator system. This system enable

89、sassociates to scan an item andelectronically check on its availability in other area stores.“Thats a function that letsassociates leverage our sharedinformation to provide evenbetter customer service,”Mott said. “Its taking advantage of technology to add a little extra service without adding a lot

90、of cost.”Wal-Marts constant drive toimprove can be summed up inone word: Efficiency! And thatswhere our technology comesin, because the best way toimprove both service and merchandising is to get it to our customers faster and more efficiently.“Speed of delivery is a keycompetitive advantage, Mottsa

91、id. Fortunately, he added,here at Wal-Mart, one thingpeople are comfortable with is change.”From “magicwands” to the millions of lines ofour own computercode and the worldslargest commercialdatabase, Wal-Mart is out in front andpicking up speed.As Don Soderquist, our ChiefOperating Officer, is fond

92、ofsaying, we dont sell to our customers. We buy for our customers,Mott said. “Our technology helps us buy theright merchandise at the righttime, and have it in the rightplace at the right price.”13“Our technology helps us buythe right merchandise at theright time, and have it in theright place at th

93、e right price.”CIO Randy Mott: a bigger bang for the technology buck.gnes Seto will be thefirst person to tell you. “I consider myselfvery fortunate to bepart of the Wal-Mart Internationalfamily,” Seto said. “I am havingmuch more fun than before.”She leaves no doubt aboutthat, at least when it comes

94、 toher job. After a long career withthe Woolco chain in Canada,Seto is now a buyer with Wal-Mart Canada in Toronto.Wal-Mart acquired 122Canadian Woolco stores in 1994, and immediatelyembarked on a multimillion-dollar plan that saw the storesrevamped and remerchandisedin less than a year. Wal-MartCan

95、ada has already becomethat nations No. 1 discountchain, and is on the verge of becoming Canadas largestretailer of any sort.And Canada is just one of the seven countries worldwidein Wal-Marts internationalexpansion. With more than50,000 associates and over 300locations outside the UnitedStates, Wal-

96、Mart is already serving some 5 million customers every week. The International Division wasprofitable in fiscal 1997, drivenby a strong fourth quarter. Andthe divisions profitability isexpected to improve this year.14AAGLOBAL BRANDAGLOBAL BRANDINTERNATIONALEven in Shenzen, China, “Wal-Mart” translat

97、es to value.WAL-MART:HOMETOWNVALUE IN ANYLANGUAGE“The Wal-Mart name is betterknown outside the UnitedStates than any of us imagine,”said Bob L. Martin, President of the International Division.“We are a global brand name.To customers everywhere itmeans low cost, best value,greatest selection of quali

98、tymerchandise and highest standards of customer service. “It takes time to make moneyin these markets, but the factthat International has grown to $5 billion in sales in less thanfive years gives us an idea ofhow great the potential is.”The Wal-Mart culture hasproven that it is transportable to othe

99、r cultures worldwide.The international market is virtually unlimited, and the farther the Wal-Mart “globalbrand” reaches around theworld, the greater the opportunityfor long-term growth.To see just how distinctive and advantageous the Wal-Mart culture is, you onlyhave to meet someone like Seto, who

100、knows the other side of the street from first-handexperience. Asked how things are differentnow at Wal-Mart Canada, Setoslist included:“We have the most advancedcomputer technology as tools todo our job, whereas before a lotof reports were not available forus to analyze our business.“We set specific

101、 goals for sales,inventory and gross margins.“We treat our customers as No. 1.“We are all equal in this companywe just have differentjobs to do.”Part of the credit for theworldwide expansion of Wal-Mart culture should go tothe 170-some associates whoare affectionately known as“expatriates” associate

102、s whogo to work in internationallocations for two or three years,sharing their knowledge withnew international associates.“It doesnt become dull, not for one moment,” laughedErlinda Garza, who is nearingthe end of her stint in Monterey,Mexico. Garza is a co-managerof a Supercenter that was built fro

103、m the ground up with the help of a small team of expatriates.Garza and her husbandChris, who works at anotherstore in Monterey, are bothnatives of Corpus Christi, Texas.They had worked at severalWal-Marts in Texas andArkansas before they wereasked if theyd like to help in theinternational expansion.

104、 Theiranswer? “You bet we would!”“We have always been veryproud of the company,” Garzasaid. “My husband was so excited when he heard aboutthis, he came home and said,Guess what? Were going toMonterey! Were going to passon the Wal-Mart culture!“Our associates in Mexicoknow retail; its the culture we

105、brought that makes the difference,” Garza said. “It wasso easy for us to work together,like big kids having fun.”Community involvement,responding to local needs, merchandise preferences, andbuying locally are all hallmarksof the international Wal-Marts,just as they are in the United States.Perhaps i

106、t is Wal-Martsemphasis on serving its hometown wherever that may be that makes Wal-Martculture travel so well. GarzasMexican associates, for example, quickly became devotees of the Wal-Mart way.“Ill miss the people,” Garzasaid as she prepared to returnto the United States. “Theyre so motivated, they

107、re so willingto say, Im going to do it. Aslong as we have people likethat, well be in good shape.”15Agnes Seto, Wal-Mart CanadaThe Wal-Mart Supercenter looks right at home anywhere in the world.16S U P E R C E N T E R SSUPERCENTERS LEAD THE WAY TO THE FUTURE OF RETAILINGTOMORROWS SUCCESS STORES:TOMO

108、RROWS SUCCESS STORES:hen Tracey Murphywas introduced onthe main stage atWal-Marts 1997 year-beginningstore managers meeting, theterm “Wal-Mart family” took ona whole new meaning.Her husband, Dale Murphy,manages a store in Kansas City,Missouri. Her father, BobBrown, is a district managerwith the Supe

109、rcenter division.Her brother, Mike Brown, man-ages a SAMS Club location. Shehas a mother-in-law whos adepartment manager and abrother-in-law whos a storemanager too. “Truly a Wal-Martfamily,” as CEO David Glasstold the 3,500 Wal-Mart associatesat the meeting.“I grew up with Wal-Mart,”Tracey Murphy s

110、aid later, over a cup of coffee at the17One-stop shopping: Convenienceis key for Supercenter managerTracey Murphy.Truly a Wal-Mart family: Frontrow, left to right: Mike Murphy,Barbara Murphy, Tracey Murphyand Dale Murphy; back row: Bob Brown and Mike Brown.WSupercenter she manages in Harrisonville,

111、Missouri. “Mydad has been with Wal-Mart for20 years, and I always had aninterest in retail. So here I am,after 14 years with Wal-Mart.”There are many families like Murphys represented in Wal-Mart, and its onlyappropriate that she works in the Supercenter division,where Wal-Mart “family values” combi

112、ne with theindustrys hottest shopping format to lead our companyinto the future of retailing.With its blend of a discountstore with groceries and such additional services as restaurants, Vision Centers,Lube Express, hair styling, drycleaning, shoe repair and bank-ing, the Supercenter is designedfor

113、shopping convenience a sizable competitive advantage in an age when consumerscomplain that they dont haveenough time to shop.The Supercenter “workseverywhere, and we think it is quite likely going to prove to be the most flexible retailconcept ever and, by definition,to have the longest life yetachi

114、eved,” according to a recentanalysts report by CS FirstBoston Corp.Focusing on the Supercenterdivision as a growth vehicle, theCS First Boston analyst gaveWal-Mart stock a “strong buy” rating.The Companys fastest-growing division, Supercenterscombine one-stop conveniencewith Wal-Marts focus on top-q

115、uality merchandise, servicesand food at everyday low prices.“Its one-stop shopping formost people,” Murphy said.“Before you needed to go to a grocery store and any numberof specialty retailers to get whatyou needed. Now you can justgo to the Supercenter.“We always preach that wesell for less, so wer

116、e savingpeople both time and money,”she said. “Its real convenientfor most customers.” And while the Supercenteroffers the shopping of tomorrow,Ann Burchett is in a stockroomat the back of the Harrisonville store, getting a peek at the day after tomorrow.Thats where Burchett, a seven-year Wal-Mart a

117、ssociate,handles fulfillment for ordersreceived through Wal-MartOnline, our World Wide Website, on which an experimentalonline shopping service wasrolled out last November.Wal-Mart changes because18CONTINUED STORYAnn Burchett: Personalshopper in cyberspace.the world changes. Our customersare constan

118、tly looking for newways to meet their needs. Thats why, after studying catalog shopping and TV shopping and a plethora ofInformation Age innovations,Wal-Mart has gone on line, testing one of todays most excit-ing ways to shop without shops.Internet or no, Burchett said,the basics of Wal-Mart Onlinea

119、re pure Wal-Mart.“Really, Im like their personalshopper,” she said. “They maybe surfing the Web on theircomputer, but when they hit oursite, we want the service to bejust as good as they get walkinginto a Wal-Mart.”So far, Murphy noted, U.S.military personnel stationedoverseas have been among themos

120、t enthusiastic customers of Wal-Mart Online. The electronicsdepartment is a particularly bighit with these cyber-customers.“Even after shipping cost,theyre getting a great price andselection”, Murphy said.(You can check out the on-lineshopping experience of Wal-Marton the Web by going tohttp:/www.wa

121、l- andclicking on “Go Shopping.”)From the growth of theSupercenter concept to suchfuturistic ideas as Internet shop-ping, Wal-Mart is still on theleading edge of retailing drivenby associates like Murphy andher own Wal-Mart family.David Glass, President andCEO, sums up the Supercenterconcept simply:

122、 “I believeSupercenters will be to the nextdecade what discount storeswere to the last, and that meansWal-Mart will continue to be a better company with eachpassing year.”19AlabamaAlaskaArizonaArkansasCaliforniaColoradoConnecticutDelawareFloridaGeorgiaHawaiiIdahoIllinoisIndianaIowaKansasKentuckyLoui

123、sianaMaineMarylandMassachusettsMichiganMinnesotaMississippiMissouriMontanaNebraskaNevadaNew HampshireNew JerseyNew MexicoNew YorkNorth CarolinaNorth DakotaOhioOklahomaOregonPennsylvaniaRhode IslandSouth CarolinaSouth DakotaTennesseeTexasUtahVermontVirginiaWashingtonWest VirginiaWisconsinWyomingGRAND

124、 TOTAL54333549532924544535857978828776254983642442303290400005300900140300U.S. TOTALSupercentersSAMS ClubsFISCAL 1997 END OF YEAR STORE COUNTS*Inc

125、ludes 3 Superamas, 25 Bodegas, 4 Aurreras, 67 Vips and 7 SuburbiasArgentinaBrazilMexicoPuerto RicoChinaIndonesiaAlbertaBritish ColumbiaManitobaNew BrunswickNewfoundlandNova ScotiaNW TerritoriesOntarioQuebecSaskatchewan1,960 344 436U.S.U.S.U.S.INTL.GRAND TOTAL 2,209 370 475INTL. TOTAL249 26 39CANADA

126、TOTAL136 0 000 700332846*24800000000000000000000INTL.INTL.Discount StoresS A M S C L U Bhe first thing she noticedwhen she came to work for Wal-Mart nine years ago,Dayna King says, was that“this company has always beeninterested in what I could offer,both from a work standpoint

127、and an idea standpoint.“I thrived in that kind of environment,” King added.Indeed. As a Regional VicePresident for SAMS ClubSM, King is responsible for 76 clubs in the northeast United States an area extending fromLexington, KY, to Bangor, ME.Her work and her ideas helpguide Wal-Marts membershipware

128、house division as it continues an intensive programof creating more value than everfor SAMS Club members.“While wholesale prices onquality merchandise drive ourbusiness,” King said, “the membership gets even morevaluable with our wide varietyof additional services and member benefits.”That kind of v

129、alue is equallyrelevant to both kinds of SAMS Club members BusinessMembers and Advantage BUILDS VALUE FOR MEMBERSSAMS CLUBSAMS CLUB Merchandise, price and more! Dayna King helps SAMS Club give members the best value in the business.20T(individual) Members.“We strive to create value for our members,

130、first and foremost by providing smallbusinesses with top-quality merchandise at exceptionalprices,” said Joe Hardin,President of SAMS Club.And that membership valuetranslates into shareholdervalue, as SAMS Club showedimprovement in sales and operating profit in the latest fiscal year. Membership inc

131、omewas also up, driven by growthin new Advantage membershipsand renewals.Among the ways SAMS Clubcreates membership value:SAMS Club offers qualitythrough branded merchan-dise at exceptional prices. The clubs also emphasizebringing in the best regionalbrands the brands manyof our members grew up usin

132、g. SAMS Club has movedaggressively to lower pricepoints on the vast majority of its merchandise withoutgiving up quality, throughbetter prices from our vendors or, in some cases,alternative vendors. This enables the clubs to encourage impulse buying with prominent displays of those items. By lowerin

133、g the number of individual items a clubstocks, SAMS Club has been able to merchandisethe items more effectively.This reduces operationalcosts and enables the clubsto move huge quantities of merchandise. For qualified members,Business and Advantagealike, the SAMS Club creditprogram offers a 1 percent

134、rebate on everything they buy. And the list of membershipbenefits just goes on andon. significant discounts on cruises through theTravel Department; discounts on rental cars,hotels, car and boat purchases; discounted long-distance telephone service; and more.The process of building membership value

135、alsoincludes an aggressive remodel-ing program for many clubs,and an effort to expand theclubs selection in the fresh categories bakery, fresh meat and produce. “These arecommodity categories thatbuild excitement, and encourage people to shop at a warehouse club more frequently,” Hardin said.In a si

136、mple but effective moveto build business, the new lowerprice points are combined witha new layout, which encouragesimpulse purchases. Building membership value is “a work in progress, not something we just do once and forget about it,” Hardinsaid. “Were trying to exceedmembers expectations byworking

137、 to be more consistent.” And so SAMS Club strides into the future. As always at Wal-Mart, change is not only expected, but encouraged,through the ideas and enthusiasmof associates like King.“Im a product of the invest-ment the company makes in itspeople,” King said. “The companyallows you to have to

138、tal owner-ship of your ideas by letting youput them in action and watchthem succeed.“That approach, that opennessto associates ideas, has beenaround since the company wasstarted,” she said. “And what I find very promising is that,even today, you can still see it happening.“The company is alwayspushi

139、ng us to wherever ourcapabilities will take us. Wal-Mart will open the door to opportunity any time somebody knocks on it.”Whether its a small business or a large family, SAMS Club membership means value.21exclusively atUse this SAMS Club one-day guest membership and see how great these values reall

140、y are.Item selection may vary by club location.Get behind the wheels of a SAMS ClubSMcart and suddenlyyouve got the purchasing power of more than $20 billionbehind you. That means significant everyday savings onquality brand names from groceries to computers and electronics, casual clothes, sporting

141、 goods, seasonal items,travel and more. Shop from the most unique product selection under one roof.All it takes is a SAMS Club membership. Now thats real value!Visit our web site at http:/Membership ValueMembership ValueShop at any SAMS Club today!Shop at any SAMS Club today!Membership# 176969285Exp

142、iration Date: 12/31/97Name:Address:City State ZIP Code:Phone #:SM5% upcharge applies on all purchases when shopping with this One-Day Guest Membership. Cash, Discover or Novus Card only (no checks). You may apply for membership, subject to qualifications, while visiting any SAMS Club .One-Day Guest

143、MembershipSMAnnualLOOKLOOKLOOKwhos on the DOW!whos on the DOW! Strategy pays off Asset management Shareholder value Tech leadership Asset management Tech leadership Inventory controlMAKING THEMAKING THEMAKING THE PEOPLE POWER SUPERCENTERS GLOBAL GROWTHPLUSPLPLUSUS2Continuous learning drives the refi

144、nementsin merchandising that keep Wal-Mart growing.16Tableofcontents1998AnnualLETTER FROM THE PRESIDENT4Growth by designWith a strategy for improving returns on ourinvestment base, Wal-Mart focuses on customerand shareholder value.6Letters to Wal-MartOur customers dont just shop at Wal-Mart, they al

145、solet us know how they liked it! Here is a sampling fromour mailbox in 1997.7Giving back to our communitiesThe Childrens Miracle Network is just one of thecauses that Wal-Mart associates support.8People power!“Our People Make the Difference” shareholdervalue and customer service built on respect for

146、 the individual.10The Wal-Mart nobody knowsOnly a major real estate and transportation companycould move $118 billion in product and house825,000 people. And that company is Wal-Mart!12People + Product + Price = (Shareholder) VALUE!1997 was another record-setting year for Wal-Mart,as we lead the ind

147、ustry in sales and earnings.14Managing for resultsImprovements in merchandising, asset manage-ment, inventory control and technology keep Wal-Mart earnings growing steadily.16Engine for earningsWal-Mart, Supercenters and SAMS Club driveU.S. growth and refinements in merchandisingare revving the engi

148、ne.17Driving forceMeet the 14 men and women who offer their diverse business talents and experience to Wal-Martas members of our Board of Directors.18A world of opportunityThe Wal-Mart Way wins customers worldwide and we learn more with each country we serve.20Financials39 Corporate informationUP FR

149、ONTCOVER REPORT: MAKING THE GRADEThe attributes that made Wal-Mart a success in the United States are also lead-ing to success in the global arena.4D I R E C T O R SJeronimo ArangoPaul R. CarterJohn A. Cooper, Jr.Stephen FriedmanStanley C. GaultDavid D. GlassFrederick S. HumphriesE. Stanley KroenkeE

150、lizabeth A. SandersJack C. ShewmakerDonald G. SoderquistDr. Paula SternJohn T. WaltonS. Robson WaltonC H A I R M A NS. Robson WaltonO F T H E B O A R DC E O,P R E S I D E N TDavid D. GlassV I C E C H A I R M A N,C O ODonald G. SoderquistE X E C U T I V E V P,Paul R. CarterP R E S I D E N T-WA L-M A

151、RT R E A LT YE X E C U T I V E V P-Bob ConnollyM E R C H A N D I S I N GE X E C U T I V E V P,C O O-Thomas M. CoughlinO P E R AT I O N SWA L-M A RT S T O R E SD I V I S I O NE X E C U T I V E V P-David DibleS P E C I A LT Y D I V I S I O NE X E C U T I V E V P,Mark HansenP R E S I D E N T- S A MS C

152、L U B D I V I S I O NE X E C U T I V E V P,Bob L. MartinP R E S I D E N T- I N T E R N AT I O N A L D I V I S I O NE X E C U T I V E V P,C F OJohn B. MenzerE X E C U T I V E V P,H. Lee ScottP R E S I D E N T- WA L-M A RT S T O R E SD I V I S I O NE X E C U T I V E V P-Nick WhiteS U P E R C E N T E R

153、S E N I O R V P,S E C R E TA RY-Robert K. RhoadsG E N E R A L C O U N S E LS E N I O R V P,F I N A N C E-J.J. FitzsimmonsT R E A S U R E R1998Meet the Board of Directors that guides Wal-Mart.Pictured here, Dr. Paula Stern and John Walton.17Wal-Mart value translates into any culture. Just ask John Ev

154、anson of Store 3064 in Oakville,Ontario, Canada. 18Whos Number One? The customer!Read what they think about Wal-Mart.63s I reflect on the year justended, I cannot help butfeel proud of what ourWal-Mart associates have accom-plished. Fiscal 1998 was anotherrecord year. Every one of our oper-ating div

155、isions increased theirsales, earnings and return onassets.Sales increased by $13 billion,or 12%, in fiscal 1998. Moreimportantly, earnings per sharegrew by more than 17%, whichcombined with our dividend yield,exceeded our 15% total sharehold-er return target. This last resultcame at some personal co

156、stthough. I promised our team that Iwould work as a People Greeter inone of our stores if we exceeded15% earnings growth. This is apromise I am happy to keep. Our focus on asset managementcontinued to produce results, asour return on assets improved0.6% to 8.5%. We achieved thisimprovement while con

157、tinuing toinvest in the growth of the businessthrough an aggressive capitalexpenditure program and interna-tional acquisitions. Further, ourreturn on equity improved toalmost 20%.Seldom can you count on every-thing coming together as well as itdid this year. We believe we couldalways do better, but

158、we improvedmore this year than I can everremember in the past. Our resultsexceeded our own aggressiveinternal goals and the stock marketrewarded us for our accomplish-ments. As much as I would like totell you that the stock price willincrease this year by another 73%,I cant. If I did, I am sure some

159、 ofyou would remind me that therewere years in recent history whenthe share price didnt increase atall. However, over time our stockwill reflect the results of ourefforts. This years increase was awell-deserved reward for our asso-ciates and shareholders.Not many years ago, it was widelybelieved in

160、the investment commu-nity that Wal-Mart was a maturingcompany in a maturing industry.No matter how well we did,according to many on Wall Street,our prospects for growth were lim-ited because we had simply gottentoo big. The “law of large numbers”would hold us back. I am happy tosay that was not the

161、case.The Wal-Mart division had anexcellent year. Sales increased by10%, while inventory actuallydeclined. This inventory reductionwas accomplished without reduc-ing assortment or affecting in-stocklevels. Gross margin improvedthrough better merchandising,without raising prices. Operatingexpenses dec

162、lined as a percentageof sales, without sacrificing service.Supercenters, our vehicle fordomestic growth, continued itsrapid unit growth while improvingprofitability. Since we began thatbusiness in 1987, Wal-MartSupercenters have grown to be thelargest hypermarket chain in theworld and one of the lar

163、gest gro-cery retailers in the United States.The Supercenter was not really anew idea but a logical extension ofthe discount store. ThroughoutWal-Marts history, we have addedGROWTHL E T T E R F R O M T H E P R E S I D E N TWith a strategy for improving returns on ourinvestment base,Wal-Mart focuses

164、on customer and shareholder value.by designGROWTHGROWTHA A ADavid D. Glass, President and Chief Executive Officer4merchandise categories to providea broader assortment and a one-stop shopping experience. TheSupercenter is the next step inthose efforts, offering the customera full range of general me

165、rchandiseand food in one location. The resultis a new retail format that competeseffectively worldwide with dis-count stores and grocery storesalike. Acceptance of these storeshas exceeded our expecta-tions, and we plan to addan additional 120 to125 units domestical-ly in the comingyear.The SAMS Clu

166、bdivision had a goodyear, with improve-ments in both sales andearnings. Mark Hansenjoined the talented team at SAMSClub as president, and togetherthey will reposition the concept forthe 21st century, offering memberseven greater value and service.Our enhanced membership bene-fits and efforts to defi

167、ne the“Millennium Club” will establishSAMS Club as the best ware-house club in the business. Ibelieve Mark and his team will takethe concept to a new level in thecoming year and re-ignite growthin the SAMS Club business.If Wal-Mart had been content tobe just an Arkansas retailer in theearly days, we

168、 probably would notbe where we are today. State bor-ders were not barriers, and peopleand ideas moved freely from onearea to another. The retailer whoincorporated the best practices,gathered from various regions ofthe country, and who offered thebest prices, assortment and service,earned the custome

169、r. We believethe successful retailers of the futurewill be those that bring the best ofeach nation to todays consumer.We call it “global learning.” We arecommitted to being a successfulglobal retailer and we believe theattributes that made us successfulin the United States will also leadto success i

170、nternationally.Our first international goal wasto be the dominant retailer in eachcountry in North America. Weaccomplished that goal this year.Canada had an outstanding year.This years double-digit sales gainsallowed us to almost triple salessince we acquired 122 Woolcostores four yearsago. Profitse

171、xceeded even our own estimates,and market share continues togrow. With the tender offerfor Cifra shares andmerger of the jointventures in Mexico,we now have a con-trolling interest inMexicos largestretailer. Cifra nowoperates stores with avariety of concepts inevery region of Mexico,ranging from the

172、 nations largestchain of sit-down restaurants to asoftlines department store. Our second goal was to pene-trate South America, and our start-up operations in Argentina andBrazil are progressing as planned.Our emerging market focus in Asiabegan in China, where we havegood customer acceptance butinsuf

173、ficient critical mass, as yet, tosustain profitability. Finally, onDec. 30, 1997, we completed theacquisition of 21 hypermarkets inGermany, marking our first entryinto Europe, one of the largest con-sumer markets in the world.The year was marked by othernotable accomplishments. Returnon assets and e

174、quity continued toimprove as we eliminated $1.4 bil-lion from inventories. While thefinancial community assumed theimpact of our asset managementwould be on the interest expenseline in the financial statements, theeffect was even more far-reaching.Sales increased as we offered cus-tomers fresher inv

175、entory, marginsimproved as markdowns andshrink declined, and expensesdecreased as merchandise handlingwas reduced in the stores. All thisallowed us to end the year withalmost $1.5 billion in cash.We will aggressively expandwith budgeted capital expendituresof approximately $4 billion in thecoming ye

176、ar and, at the same time,we will look for further opportuni-ties to increase our internationalpresence. Additionally, our cashflow and earnings growth willallow us to continue our share buy-back with the expectation that wewill repurchase $2 billion more instock over the next 12 to 18months. Despite

177、 the law of largenumbers, we believe that our stat-ed target of total annual sharehold-er return of 15% remains quiteachievable.My congratulations and grati-tude to our associates for their sacrifices, dedication and enthusi-asm that translated into one of thebest years this company ever expe-rience

178、d. Thanks also to our shareholders and customers foryour support. I truly believe thatwith the momentum we have, fiscal1999 will be even better.Allied Signal, Inc., Aluminum Co. of America, American Express Co., AT&T, Boeing, Caterpillar,Chevron, Coca-Cola, E.I. DuPont, etc., Eastman Kodak, Exxon, G

179、eneral Electric, General Motors, Goodyear Tire & Rubber, Hewlett-Packard, IBM, International Paper Co.,J.P. Morgan, Phillip Morris Cos., Johnson & Johnson, McDonalds, Merck, 3M, Procter & Gamble, Sears Roebuck,Travelers Property/Casualty, Union Carbide, United Technologies, Wal-Mart, Walt Disney Co.

180、% growth in stock price 1997DJIAWAL-MART*Dow Jones Industrial Average23%73%DJIADJIA* * 30 30 vs. the combinedDJIA* 305U P F R O N TLettersto Wal-MartFit for a haloWe want you to know what a great lady Claudene Nichols is!(Store 90, Grove, OK). Our sonwas in a serious car accident andbroke his neck,

181、requiring him towear a “halo.” He really neededsome shirts that he could easily puton and take off. Claudene offeredto sew them for us. She did a won-derful job and wouldnt take apenny for all the work!You couldnt have a betteremployee. We would like to see hernominated for employee of themonth.Than

182、k you,MRS. JIM ROUTHGROVE, OKChocolate chips to the rescue!I was shopping at Wal-Mart (Store2049, Altoona, PA.) on Tuesday,Sept. 16. After arriving home, I discovered I had left my purse in a cart outside Wal-Mart.My daughter and I immediatelywent back to Wal-Mart, but thecart was not there. We went

183、 to the courtesy desk, where mypurse was returned by ReginaMurphy and Terri Stehley,who found it after lookingthrough many carts. All mypapers and credit cards wereinside, but all the cash wasmissing.The following Sunday, I received a call to come toWal-Mart. To my surprise,Regina and Terri gave me

184、anenvelope filled with cash inthe amount I lost! They had bakedchocolate chip cookies and held abake sale for employees so theycould return my money!Terri (domestic department) andRegina (housewares department)deserve the highest award Wal-Martcan give. I also want to recognizeManager Sam Gortney an

185、d all theemployees of the Altoona Wal-Mart. I am deeply grateful to all atthat store. Thank you,HELEN L. MAUROHOLLIDAYSBURG, PASantas with SmileysTwo weeks ago, I called Wal-Mart(Store 1162, Washington, IN) witha special request. I was givenAssistant Manager Karen Burr. Wewere trying to arrange a Ch

186、ristmassurprise for my husbands parentsin Washington.Jeffreys parents needed a newtelevision, and we knew Wal-Marthad a RCA 26” set on sale. Since welive in Missouri, we didnt knowhow to get it to them. I asked Karenif they made deliveries. Not usually,she replied, but asked what weneeded. I explain

187、ed, and withouthesitation she said she had a fewassociates who could help. I thenrequested another favor: WouldKaren mind putting a big bow onthe box and signing our names to acard? She said no problem and shewould let us know when the deliv-ery was made.We were so excited wonderingwhat was happenin

188、g 500 milesaway! We called Karen back in twohours and learned the associateshad just left the store. She hadwrapped the box in plain brownpaper, put a bow on it with thecard,and had even sent along a camerato capture the event for us.About 20 minutes later, our parents called. They said two guyswith

189、 Santa hats had just delivereda TV to their home! They were so excited and surprised. Theywerent expecting Christmas tocomeearly, and especially delivered byWal-Mart.Your employees went waybeyond the call of duty. It wouldhave been very easy for Karen tosayshe couldnt help us. I dont knowthe names o

190、f the young men whoplayed Santa, but they are to becommended for their extra efforts.With people always grumblingabout poor customer service, I thinkits time to recognize Wal-Martemployees who put the “Merry” inour Christmas!Sincerely,JEFF, JENNY ANDLILY ROSE HUNTERBLUE SPRINGS, MOOur customers dont

191、 just shop at Wal-Mart, they also let us knowhow they liked it! Here is a sampling from our mailbox.6rom the beginning, SamWalton believed that eachWal-Mart store should reflectthe values of its customers andcommunity. Thats why local asso-ciates are at the heart of Wal-Martcommunity outreach progra

192、ms. Guided by associates, Wal-Marthas helped countless individualsand organizations, from tiny BabyGrace, a Childrens Miracle Networkchild, to the Cullman, AL schools,where Distribution Center 6006raised $15,000 to help replace abuilding destroyed by fire. This emphasis on giving backhas benefited W

193、al-Mart, as well.Its no coincidence that the topstores in sales generally are themost involved in the community.Associates involvement is key toWal-Marts role as the official massmerchandise sponsor for ChildrensMiracle Network, a group of 170childrens hospitals. Local stores havesponsored a variety

194、 of activitiesover the past decade to raise $104million for CMN $20 million in1997 alone. In Myrtle Beach, S.C.(Store 643), associates have donetheir part, holding bake sales, fund-raising meals and shopping sprees.Their generosity was repaid whenGrace Young was born at just 23weeks, weighing 15 oun

195、ces.Baby Grace, as shes known inthe Wal-Mart family, was the small-est baby ever to survive in McLeodChildrens Hospital in Florence,S.C. State-of-the-art care helpedher reach five pounds after fourmonths in the Neonatal IntensiveCare Unit. Only then was she ableto come home with her mother,Libby You

196、ng, a 12-year Wal-Martassociate at Store 643. Companywide, associates andcustomers initiated giving of morethan $63.1 million last year throughfive major community outreachprograms. The bulk was $34 millionin Community Matching Grants, in which the Wal-Mart Foundationmatches funds raised by local st

197、ores.Wal-Mart associates proved that“Voluntarism Pays,” as the founda-tion contributed $400,000 to local charities. $100 was given for each 15 hours of volunteer work perquarter contributed by associates.The giving included $47,220 in Associate Matching Grants asWal-Mart matched associatesdonations

198、of $25 to $250 to collegesof their choice. As part of Americas HometownLeader Program, local stores select-ed outstanding teachers - 1,800across the country - and the foun-dation donated $500 to each honorees school.Wal-Mart invests heavily in thelatest technology, and our faith inthe future extends

199、 to tomorrowsleaders, with sponsorship of fivecollege scholarship programs fordeserving young people.At the local level, each Wal-Martstore provides a $1,000 SamWalton Community Scholarship toone student for his or her freshmanyear of college. This program, fundedby the foundation, has awardednearly

200、 $20 million in scholarshipssince 1981.Wal-Mart associates generate $102 million in gifts in 1997.ivingBACKF F FGBaby Grace, all ready to go home with hermother, Libby, and grandmother.7$50 million in scholarship contributionsCommunity ScholarshipFoundation ScholarshipCompetitive Edge ScholarshipAss

201、ociates Scholarship$20$23$1.5$5PEOPLE POWERPEOPLE POWERPEOPLE POWERU P F R O N T“Our People Make the Difference” - shareholder value and customer service built on respect for the individual.8ong before “empowerment”became a corporate buzz-word, Wal-Mart associateswere empowered, not justallowed, but

202、 encouraged to makedecisions, take risks and, yes, evenmake mistakes in the cause of cus-tomer service.Who makes the customerNumber One? “Our People Makethe Difference!”At Wal-Mart, our people makethe difference for each other, too.“Our divisions mission for ourassociates is to Get them, Keepthem an

203、d Grow them,” saidColeman Peterson, Senior VicePresident of the People Division.“Everything we do comes out ofour basic Wal-Mart principle ofRespect for the individual.“And when we put all thattogether, it translates into great ser-vice to the customer.”In addition to an industry-lead-ing array of h

204、ealth and other benefits, Wal-Mart offers associ-ates a variety of incentive pro-grams. Most of these incentives arebased directly on the performanceof an associates store or division -improvement in profits, reductionin shrink, etc. Virtually all Wal-Mart associates are eligible forsome type of per

205、formance-basedincentive plan.From an associates point ofview, the equation is obvious:Better service to the customermeans better profits, which meanshigher incentives and increasedshareholder value. And yes, Wal-Mart associates care deeply aboutshareholder value, because somany are shareholders them

206、selves.Our associates are kept informedabout the stock price, so everyoneunderstands the connectionbetween Wal-Marts performanceand their own financial success. Last year, the total company andevery division but one met orexceeded its maximum profitimprovement goals. As a result, arecord level of pa

207、yout was award-ed to associates. We believe there isa direct correlation between recordincentive award levels and thecompanys record-setting perfor-mance last year.Even traditional associate bene-fits also show the Wal-Mart touch.They provide the best available ser-vice at the lowest possible price.

208、“We have health plans to fit any-ones budget,” said Tom Emerick,Vice President of Benefits. “Improud to say that we have a healthplan, with no lifetime caps. Very fewbenefit plans will cover a majorhealth problem as well as ours.“And yet, thanks to diligent nego-tiations with providers and the great

209、work our associates do in control-ling costs, our total cost of benefits isbelow industry averages.”Perhaps the biggest benefitnews in fiscal 1998 came when werolled out our 401(k) savings plan,which has been so well receivedthat we expect it to become thelargest such plan, in number ofparticipants,

210、 in the United States.The 401(k) plan, which providesa tax-deferred opportunity to savefor retirement, came about afterassociates suggested it in Wal-Marts“Grass Roots” communications pro-gram. This year, Wal-Mart dividedthe companys annual contributionequally between the Profit Sharingand 401(k) pl

211、ans.Nowhere is the link betweenassociates interests and the suc-cess of the shareholders more visi-ble than in the Profit Sharing pro-gram, which has 70 percent of itsassets invested in Wal-Mart stock.“Thanks to the 73 percent increasein the stock price, the ProfitSharing plans assets increased 57pe

212、rcent in the last year,” said ChiefFinancial Officer John Menzer.Thats what can happen whenWal-Mart people, the best in theretail industry, focus on creatingvalue for customers, shareholdersand the company as a whole.L L LColeman Peterson (foreground), Senior Vice President, People Division, with th

213、e people he serves.9A roof over our headsalk in any Wal-Martstore and youre imme-diately drawn to thefriendly associates, the attractivedis-plays and cheery Mr. Smiley ( )signs. Wal-Mart strives to makeshopping enjoyable and convenient,even as it offers the lowest prices onitems for every member of

214、the family.Part of Wal-Marts formula forsuccess is the convenient locationof its more than 2,800 U.S. operat-ing units, with easy access to majorhighways and ample parking. Inaddition, each store has roomyaisles and abundant space for dis-plays of items as varied as cook-ware, tents and sneakers.A l

215、ittle-known division of ourcompany, Wal-Mart Realty Co.,selects and manages the sites forWal-Mart discount stores, Super-centers and SAMS Club unitsacross the United States. Decisionson new stores take into account sev-eral factors: potential market satura-tion, competition, expansion or relo-cation

216、 alternatives, total capitalexpenditure, cash-on-cash incre-mental rate of return and a market-ing plan for the existing real estate ifthe project involves relocation.With about 310 million squarefeet of property, Wal-Mart Realtyis the largest owner and manager ofretail space in the country; far lar

217、g-er than the nations next-largestshopping center manager.And Wal-Marts real estate hold-ings will only continue to grow. Thecompany added, relocated orexpanded 147 stores in the fiscalyear ended January 1998 andplans 180 to 200 more in the yearending January 1999. In the future,Wal-Mart expects to

218、add, relocateor expand about 200 stores a year.Supercenters will lead Wal-Martsdomestic growth in the future,whichmeans an even larger role for Wal-Mart Realty. As the division rollsoutnew Supercenter prototypes (rang-ing from 110,000 to 220,000 squarefeet), it also must find uses for exist-ing relo

219、cated stores after they areclosed. In the past four years, Wal-MartRealty has implemented an aggres-sive marketing plan for once-occu-pied stores. Its goal: sell or leasethe unused space. In the latest fiscal year, Wal-MartRealty leased or sold more than 10million square feet of once-occu-pied space

220、. Some non-retail usesinclude call centers, light manufac-turing, storage, physicians offices,family entertainment and commu-10U P F R O N TOnly a major real estate and transportation company could move $118 billion in product andhouse 825,000 people. And that company is Wal-Mart!WWWNobody KnowsThe1

221、1nity centers, all of which help cre-ate jobs in the local community.“Wal-Mart will accelerate itsaggressive strategy to identify usesfor once-occupied properties as itplans a significant number ofstore relocations in the future,”said Jim Vawter, Director of Finan-cialManagement for Wal-MartRealty.R

222、egardless of whether it isbuilding or relocating, the realtycompanys most important goal,like that of all other Wal-Mart divi-sions and each Wal-Mart associate,is to provide a solid return oninvestment. The project must gen-erate acceptable returns for ourcompany, or it wont get off theground.Carryi

223、ng the loadAnywhere you travel along thehighways and byways of America,its no surprise to see a tractor-trail-er rig painted with the familiar blueWal-Mart logo. With 3,300 trucks,Wal-Marts company-owned truckfleet is among the nations largest with dispatch locations fromOregonto New Hampshire to Fl

224、orida to “allover,” said Larry Duff, VicePresident of Transportation.“Were a pretty good-sized trans-portation company in our ownright,” Duff said. “But were obvi-ously in the retail business, a pointwe continue to make clear.”The Wal-Mart fleet logged 455million miles last year as 3,800drivers made

225、 more than 900,000deliveries.Just as impressive as these statistics is the divisions safetyrecord. Last year, Wal-Mart driversaveraged 1.2 million miles withoutan accident, an enviable achieve-ment for any transportation com-pany. That means Wal-Mart dri-vers safety record is far superiorwhen compar

226、ed with the nationalaverage.Wal-Mart drivers are the epitomeof our companys belief in givingback to our communities. Our drivers often help strangers along-side the road by changing tires,driving stranded motorists to servicestations or offering the use of cellulartelephones to call for help. In the

227、Wal-Mart tradition of voluntarismand community service, our drivershelp out because they want to, notbecause they have to.We recognize drivers gooddeeds with the “Good Sam” award.The award, a ballcap with a haloaround it, has a double meaning: It honors our founder, Mr. Sam,and our “Good Samaritans”

228、 of theroadways as well. Wal-Mart hires only experienceddrivers, with at least 300,000 accident-free miles and no majortraffic violations. In truckingindustry terms, Wal-Mart offers apremium driving job, which allowsdrivers to be home frequently anddoes not require them to load andunload trucks. The

229、 truck fleet is the visible linkbetween stores and a critical distri-bution network. Combined, theseare the associates who ensure thatevery item in our stores arrives ingood shape and on time, whichprovides Wal-Mart with a compet-itive advantage in delivering mer-chandise to our customers.Pictured a

230、t left, 18-wheelers stand ready at the Wal-Mart Distribution Center in Ottawa, KS. Above, Wal-MartRealtys marketing led to the reuse of a closed SAMS Club building (inset) as this Florida Mercedes dealership. Wal-Mart to the moon and backWal-Mart trucks traveled 455 million miles (in the U.S.) in 19

231、97.At a distance of 238,857 miles from the earth to the moon,Wal-Mart drivers could have gone from the earth to the moon -and back! - 952 and a half times.magine a company with rev-enues of nearly $120 billion.This hypothetical company isthe largest in its industry -not just in the United States, bu

232、t inthe world.How likely is it that this companycould continue to be a growthstock?Not very, the conventional wisdomwould respond - but then, Wal-Marthas never paid muchattention to con-ventional wisdom.After passing the milestone of$100 billion in revenues in fiscal1997, Wal-Mart followed up bymaki

233、ng 1998 the biggest year in itshistory, setting another sales recordwith revenues of $118 billion.Not only did Wal-Mart extendits standing as the largest retailer inthe world, but our fiscal 1998increase in sales ($13.1 billion), byitself, would make Wal-Mart theninth-largest retailer in the nation.

234、“Pound for pound in fiscal 1998,we had the best year in the historyof the company,” said David Glass,President and Chief Executive12I I IC O V E R R E P O R T: M A K I N G T H E G R A D EWhen Wal-Mart first wentpublic, a foresighted investorcould have bought 100 sharesof the stock for $1,650.Today,

235、that investors 100shares would have grown to 102,400 shares, worth morethan $5.1 million, for an average gain of more than$180,000 per year.SHORTHANDFiscal 1998 was another record-setting year for Wal-Mart as we led the industry in sales and earnings.(shareholder)VALUE!(shareholder)VALUE!Officer of

236、Wal-Mart Stores, Inc.The investment community satup and took notice. Analyst afteranalyst has given Wal-Mart ratingsof “buy” (Credit Suisse FirstBoston Corp. and GenesisMerchant Group) or “strong buy”(Salomon Brothers).No doubt the largest single Wal-Mart investor in fiscal1998 was Wal-Martitself. I

237、n a move toimprove shareholdervalue, the Board ofDirectors autho-rized a $2 billionshare repurchaseprogram. In March1998, managementexpanded the share repur-chase program to the level of $2billion over the next 12 to 18months.“Our share repurchase programreally sends a message of confi-dence in the

238、company to WallStreet,” said Executive VicePresident andChief FinancialOfficer John Menzer, “and it was agreat investment for us, too. Westarted buying in the low 20s, andthe stock ended up rising 73 percentin the last calendar year. Wal-Marthad the second-highest return toshareholders among the 30

239、blue-chip stocks that make up the DowJones Industrial Average.”Wal-Mart shareholders also sawan immediate increase in theirreturns in fiscal 1998 when the div-idend was increased by 29 percent.Combine those actions withWal-Marts ongoing drive to dobusiness better, increasing profitswhile managing ou

240、r capital, andmanagement believes the companyis on track to achieve its goal of 15percent total annual shareholderreturns. Analysts agree.“Wal-Marts improved execu-tion is more than simply a focus onimproving the return on invest-ment,” Analyst Michael Exstein ofCredit Suisse First Boston wrote inla

241、te 1997. “Instead, a number of ini-tiatives, including merchandisingand operational changes and moredisciplined financial management,have combined to produceimproved results.”By concentrating on the basicsof its business, Wal-Mart continuesto build shareholder value.Wal-Marts growth, in the futureas

242、 well as the past, is basedonatightfocus on the Wal-Mart equation:“People + Product + Price =VALUE!”H. Lee Scott Jr.,President and CEO ofthe Wal-Mart StoresDivision, identifiedfour key legacies ofWal-Mart FounderSam Walton that contin-ue to guide the companysquest for ever-greater value:1) Every Day

243、 Low Prices (EDLP)2) Customer Service 3) Leadership4) Change“We have never been afraid ofchange,” Scott said, noting thatMr. Sam was always willing to takerisks for the sake of change.“At Wal-Mart, we are alwayschallenging ourselves to continueto improve, because we cant allowourselves to become com

244、placent,”Scott said. “We have not yetarrived at the level we are alwaysstriving to achieve.”Wal-Marts dedication to value -for our customers, our associatesand our shareholders - has pro-duced what Don Soderquist, ViceChairman and Chief OperatingOfficer, calls “the most incrediblestory ever told in

245、American business.”When Wal-Mart first went pub-lic, in October 1970, a foresightedinvestor could have bought 100shares of the stock for $1,650.Today, that investors 100 shareswould have grown to 102,400shares, worth more than $5.1 mil-lion at Wal-Marts recent closingprice of 50, for an average gain

246、 ofmore than $180,000 per year. Inaddition, that holding would havepaid $27,000 in dividends in 1997.“This is a long-term game,” Glasssaid. “We dont have any short-term plans at Wal-Mart.Everything we do is designed tobuild shareholder value over thelong haul. Our opportunities areunparalleled in th

247、e history of retail-ing because of where we are now,and the capability and determina-tion we have to keep getting better.”13Sales (in billions)9293949596970200$44$83$94$105$56$67Fiscal year$11898$160140here was a time whenWal-Mart associates, liketheir counterparts at otherretailers, spen

248、t much of their timesimply trying to keep track ofinventory. They manually counteditems and filled out endless orderforms in the hope that, eventually,the paper trail would lead the rightproducts back to their shelves.But today, thanks to Wal-Martsindustry-leading information tech-nology, computers

249、handle most ofthose chores, far faster and moreefficiently than a paper-based sys-tem. Wal-Mart leads the retailindustry with itsversion of a “just intime” supply sys-tem in which computers trackevery product andautomaticallyalert warehouseswhen its time to restock theshelves.Now, associates who spe

250、nt theirdays filling out forms can spendthat time serving customers.This kind of improved efficiencyat the individual level can be seenevery day among 825,000 Wal-Martassociates worldwide. In the stores,where the rubber meets the retailroad, Wal-Mart customers benefitdirectly from the companys tight

251、focus on continuing to improve itsoperating strategy.“Focus is the key,” said ThomasM. Coughlin, Wal-Marts ExecutiveVice President of Operations. “As acompany, we have to stay veryintense about the things that aremost important in our business -our customers, our associates andour shareholders, who

252、often areone and the same person.”In the stores, where strategyrolls up its sleeves and goes towork, some of our most visiblestrategic initiatives include theimproved management of assetsand inventory, stronger-than-evermerchandising initiatives and con-tinuous development of informa-14C O V E R R E

253、 P O R T: M A K I N G T H E G R A D EDespite a 12 percent increasein sales in 1998, the companysaw only a 4 percent increasein inventories, saving about $1.4 billion. This makes morecapital available for productive uses.SHORTHANDImprovements in asset management, inventory control andtechnology will

254、keep Wal-Mart earnings growing steadily.Managing for ResultsT T TTop photo: Bobby Martin, President of the International Division, and Mark Hansen, President of SAMS Club. Lower photo: H. Lee Scott Jr., President of the Wal-Mart Stores Division, and Thomas M. Coughlin, Executive Vice President of Op

255、erations.15tion technology. These initiativesshow their value not only in thefinancial results of fiscal 1998, butare designed to continue to deliverimproved results, now and in thefuture.In turn, greater efficiency in thestores will have a direct impact onWal-Marts value to shareholders.An example

256、of how Wal-Martsoperational improvements buildreturns to investors: Despite a 12percent increase in sales in 1998, thecompany saw only a 4 percentincrease in inventories, savingabout $1.4 billion. This makesmore capital available for otherproductive uses.According to Bob Connolly,Executive Vice Pres

257、ident ofMerchandising, there are four keysto this dramatic improvement ininventory management:1) Systematic reduction of un- productive inventory2) Reduction of orders by 15 percent, enabling stores to manage their own inventory3) Reduced pack sizes acrossmany categories4) Timely markdownsRather tha

258、n blindly slashinginventory, Wal-Mart has used thedata gathered by technology tomake more inventory available inthe key items that customers wantmost, while reducing inventoriesoverall. This is where todays informationtechnology meets merchandising.Continuous learning has been aconstant thread in Wa

259、l-Marts his-tory, and with modern technologyfor understanding what customersdo in the store, we have been ableto focus more precisely on servingtheir needs.Wal-Marts record-breaking per-formance in fiscal 1998 was, asCoughlin puts it, a matter of focus.By focusing simultaneously on rais-ing profits

260、and restraining expenses,our results show what can happenwhen we combine inventory man-agement, leading-edge technologyand increased financial discipline.AlabamaAlaskaArizonaArkansasCaliforniaColoradoConnecticutDelawareFloridaGeorgiaHawaiiIdahoIllinoisIndianaIowaKansasKentuckyLouisianaMaineMarylandM

261、assachusettsMichiganMinnesotaMississippiMissouriMontanaNebraskaNevadaNew HampshireNew JerseyNew MexicoNew YorkNorth CarolinaNorth DakotaOhioOklahomaOregonPennsylvaniaRhode IslandSouth CarolinaSouth DakotaTennesseeTexasUtahVermontVirginiaWashingtonWest VirginiaWisconsinWyomingGRAND TOTAL5033450100311

262、424340455627999644244230282305000358042200210610U.S. TOTALSupercentersSupercentersSAMS ClubSAMS ClubFISCAL 1998 END OF YEAR STORE COUNT

263、S*Includes 36 Superamas, 62 Bodegas, 33 Aurreras, 178 Vips and 30 SuburbiasArgentinaBrazilMexicoPuerto RicoChinaGermanyAlbertaBritish ColumbiaManitobaNew BrunswickNewfoundlandNova ScotiaNW TerritoriesOntarioQuebecSaskatchewan1,921 441 443GRAND TOTAL 2,421 502 483INTL. TOTAL500 61 40CANADA TOTAL144 0

264、 000 9003328547*28800000000000000000000Discount StoresDiscount StoresU.S.U.S.INTL.INTL.INTL.U.S.hen Wal-Mart turnedto Supercenters - largerthan traditional dis-count stores, with a full-service grocery department - as a key vehi-cle for future growth, some investorswondered how

265、 the addition of tradi-tional grocery store items wouldaffect the divisionsperformance.Some also won-dered whetherconsumers wouldbe willing to shopfor food and gener-al merchandise inthe same place.Those questionshave been an-swered to the benefit of Wal-Martshareholders.Wal-Mart Discount Storesalre

266、ady carry many of the itemsthat a typical supermarket sells,such as household cleansers, papergoods, soft drinks, snacks andhealth and beauty care items.When we add a grocery section toa regular store, creating aSupercenter, it is a natural exten-sion of the concept. As we expect-ed, shoppers respon

267、ded enthusias-tically to the one-stop convenience.Supercenters will represent morethan 20 million square feet of ournew retail space this year. We alsoexpect them to provide half of ourearnings growth over the nextthree to five years.Wal-Mart Discount Stores, thecore of our business, are also a keyc

268、omponent of our earnings engine.They delivered improved resultsthis year through execution andmerchandising initiatives. Ourinventory reduction efforts haveprovided sustainable margin bene-fits while allowing us to continue toroll back prices. This meansfresher merchandise, bettersales and improved

269、prof-its for our shareholders.Along with serving asa primary driver ofgrowth, Supercentershavebeen an important sourceof the continuous learningthat is central to the Wal-Mart Way of doing business. By “data-mining“the massive supply of infor-mation on customer shoppinghabits that our informationtec

270、hnology provides, we havebeen able to refine our store lay-outs and design, so that new andremodeled stores more effectivelyserve customers.For another example, once Wal-Mart went seriously into thefood business, which is a $450 bil-lion market in the U.S., we quicklylearned the ins and outs of maki

271、ngregional perishable food distribu-tion as efficient as possible. As oneanalyst wrote in October 1997:Combined with the merchandisingsavvy of Wal-Marts team of food mer-chants, regional perishable food distribution and related centralized buy-ing are enabling Wal-Mart to get a legupon some of the c

272、ompetition in terms ofbothmerchandising power and value.SAMS Club, the largest domes-tic warehouse club operation, isanother major source of earningsfor Wal-Mart. With 443 units and attractivereturns, SAMS already is a signif-icant contributor to the overallcompany. On top of that, underSAMS new Pre

273、sident, MarkHansen, the division is introducingimportant enhancements in prod-ucts and services this year. Wal-Mart plans to remodel about70 SAMS Club units in fiscal 1999,expand a large number of freshdepartments and add about 10 newunits.16Supercenters have been an important source of thecontinuou

274、s learning that iscentral to the Wal-Mart Way.By data-mining the information on customershopping habits that our technology provides, we havebeen able to refine store layouts and design.SHORT HANDWal-Mart, Supercenters and SAMS Club drive Wal-Marts growth -and refinements in merchandising are revvin

275、g the engine.C O V E R R E P O R T: M A K I N G T H E G R A D EWWW17Creating shareholder value begins at the top - the 14 members of the Wal-Mart Board of Directors.With a wide variety of top-level international, retail,business and education experience, these leaders area driving force for Wal-Mart

276、s growth.Driving forceRight: Dr. Paula Stern, The Stern Group Inc. John Walton, Quantum PartnersAbove: Stanley Gault, formerly of Goodyear Tire Dr. Frederick Humphries, Florida A&M UniversityStan Kroenke, The Kroenke GroupAbove: Jeronimo Arango, Cifra S.A. de C.V.; John A. Cooper Jr., CooperCommunit

277、ies Inc.; and Stephen Friedman, Goldman Sachs & Co.Below: Elizabeth (Betsy) Sanders, The Sanders PartnershipJack Shewmaker, international consultantBelow: Rob Walton, Paul Carter, Don Soderquist and David Glass ith more than 600 unitsin seven countries andanother 50 to 60 newunits planned for fiscal

278、 1999, theInternational Division plays a keyrole in the Wal-Mart organization.Along with the financial returnsfrom the international expansion,we learn more each day about howthe Wal-Mart Way of doing busi-ness can best serve customers fromdiverse cultures and backgrounds.Five years into our interna

279、tionalexpansion, operating profits fromthe International division were $24million in fiscal 1997 and $262 mil-lion in fiscal 1998. The division hadtotal revenues of $7.5 billion in theyear just completed.Even though Wal-Mart is only a few years into its internationalexperience and many of the mar-ke

280、ts are still in the early investment stage of development, itis notable that International isalready generating a meaningfulprofit. 18C O V E R R E P O R T: M A K I N G T H E G R A D EThe Wal-Mart Way wins customersworldwide - and we learn more with eachcountry we serve.WWWThe Wal-Mart Way of doing

281、business knows no boundaries. John Evanson, manager of Store 3064 in Oakville, Ontario, Canada, shows off a Wal-Mart value.19More importantly, we are begin-ning to understand the true meaning and benefits of being aglobal company. The best of classfrom all over the world now set thebenchmarks for ou

282、r industry,whether domestic or international.“Speedy checkouts,” “gravitywalls” and new merchandise itemsare examples of ideas from interna-tional markets that we importedand applied to our domestic busi-ness. Just think of the multiplierfactor when we apply a new sales-generating or cost-saving ide

283、a to3,000 existing stores. This is whatwe call “Global Learning.”Our first two entries into theglobal marketplace were Mexicoand Canada. Both were major con-tributors to the international success that we enjoyed this pastyear and will be key components ofour future achievements.Canada provided impre

284、ssiveresults with double-digit salesincreases and a near doubling of itsoperating profits. Continued mar-ket share gains and improvedresults made Canada one of thestandout divisions of fiscal 1998.Other highlights of fiscal 1998for the International division: Wal-Mart has established itselfas the pr

285、emier retailer inMexico with its purchase of a 51 percent interest in Cifra,that nations largest retailer.Several analysts who followWal-Mart have remarked onthe enormous potential of theMexican market, with its pop-ulation of 92 million and GDPof almost $335 billion. In addition, the high inflation

286、that currently characterizesMexicos economy has been a valuable learning experiencefor Wal-Mart, as we learn howto manage our business insuch an environment. Weexpect to apply the experiencegained from combining ourstrategy with Cifras to otherinternational markets. Wal-Mart now has operationsin a s

287、eventh international market - Germany, which we entered by purchasingWertkauf, an operator of“hypermarkets,” one-stopshopping facilities similar toour Supercenters. With theWertkauf acquisition, Wal-Martgains 21 stores that did $1.2billion in business in fiscal1998, and perhaps moreimportantly, entr

288、e intoGermany, Europes largestretail market. The International expansionaccelerates the development of Wal-Mart as a global“brand” along the lines of Coca-Cola, Disney,McDonalds and others. “Weare a global brand name,” saidBobby Martin, President ofthe International Division. “To customers everywher

289、e itmeans low cost, best value,greatest selection of qualitymerchandise and highest stan-dards of customer service.“In the long term, the success ofWal-Marts entry into the globalarena means one thing to share-holders: The entire world is ourmarketplace. And wherever Wal-Mart does business, we learn

290、 howto do business better.In the long term, the successof Wal-Marts entry into theglobal arena means one thingto shareholders: The entireworld is our marketplace. Andwherever Wal-Mart does business, we learn how to dobusiness better.SHORTHANDINTERNAINTERNATIONAL SALES GROWTHTIONAL SALES GROWTHINTERN

291、ATIONAL SALES GROWTHFiscal year end January 31Sales dollars in billions97969598$3.7$ $3.73.7ArgentinaBrazilCanadaChinaGermanyMexicoPuerto Rico201 1 - Y E A R F I N A N C I A L S U M M A R Y(Dollar amounts in millions except per share data)6Net sales$ 117,958$ 104,859$ 93,627Net sales incr

292、ease12%12%13%Comparative store sales increase6%5%4%Other income-net1,3411,3191,146Cost of sales93,43883,51074,505Operating,selling and general and administrative expenses19,35816,94615,021Interest costs:Debt555629692Capital leases229216196Provision for income taxes2,1151,7941,606Minority interest an

293、d equity in unconsolidated subsidiaries(78)(27)(13)Net income3,5263,0562,740Per share of common stock:Net income Basic and Dilutive$1.561.331.19Dividends0.270.21.20Financial PositionCurrent assets$ 19,352$ 17,993$ 17,331Inventories at replacement cost16,84516,19316,300Less LIFO reserve348296311Inven

294、tories at LIFO cost16,49715,89715,989Net property,plant and equipment and capital leases23,60620,32418,894Total assets45,38439,60437,541Current liabilities14,46010,95711,454Long-term debt7,1917,7098,508Long-term obligations under capital leases2,4832,3072,092Shareholdersequity18,50317,14314,756Finan

295、cial RatiosCurrent ratio1.31.61.5Inventories/working capital3.42.32.7Return on assets*8.5%7.9%7.8%Return on shareholdersequity*19.8%19.2%19.9%Other Year-End DataNumber of domestic Wal-Mart stores1,9211,9601,995Number of domestic Supercenters441344239Number of domestic SAMS Club units443436433Interna

296、tional units601314276Number of associates825,000728,000675,000Number of shareholders245,884257,215244,483* Net income before minority interest and equity in unconsolidated subsidiaries/average assets* Net income/average shareholdersequity293019891988$ 82,494$ 67,344$ 55,484$ 43

297、,887$ 32,602$ 25,811$ 20,649$ 15,95922%21%26%35%26%25%29%34%7%6%11%10%10%11%12%11%9262,58653,44444,17534,78625,50020,07016,05712,28212,85810,3338,3216,6845,1524,0703,2682,5995203336253,5811,3581,24884414(4)4(1)2,6812,3331,9951,6091,29

298、11,0768386281.171.02.87.70.57.48.37.28.17.13.11.09.07.06.04.03$ 15,338$ 12,114$ 10,198$ 8,575$ 6,415$ 4,713$ 3,631$ 2,90514,41511,4839,7807,8576,2074,7513,6422,855359932329120314,06411,0149,2687,3845,8084,4283,3512,65215,87413,1769,7936,4344,7123,4302,6622,14532,81926,44120,56515,44311,38

299、98,1986,3605,1329,9737,4066,7545,0043,9902,8452,0661,7447,8716,1563,0731,7227401851841861,8381,8041,7721,5561,1591,0871,00986712,72610,7538,7596,9905,3663,9663,0082,2571.51.61.51.71.61.71.81.72.62.32.72.12.42.42.12.39.0%9.9%11.1%12.0%13.2%14.8%14.6%13.7%22.8%23.9%25.3%26.0%27.7%30.9%31.8%31.8%1,9851

300、,9501,8481,7141,5681,3991,2591,0963242642410622,000528,000434,000371,000328,000271,000223,000183,000259,286257,946180,584150,242122,41479,92980,27079,77722MANAGEMENTS DISCUSSION AND ANALYSISNet SalesThe Company sales growth of 12% in fiscal 1998, whencompared to fisc

301、al 1997, was attributable to our expansionprogram and comparative store sales increases of 6%.Expansion for fiscal 1998 included the opening of 37 Wal-Mart stores, 97 Supercenters (including the conversionof 75 Wal-Mart stores), eight SAMS Club units and theopening or acquisition of 289 internationa

302、l units.International sales accounted for approximately 6.4% of totalsales in fiscal 1998 compared with 4.8% in fiscal 1997. The growth in International is partially due to the acquisitionof controlling interest in Cifra, S.A de C.V. during the thirdquarter. See Note 6 of Notes to Consolidated Finan

303、cialStatements for additional information on our acquisitions.SAMS Club sales, as a percentage of total sales, decreasedfrom 18.9% in fiscal 1997 to 17.5% in fiscal 1998.The sales increase in fiscal 1997 when compared to fiscal1996 was attributable to our expansion program and comparativestore sales

304、 increases of 5%. Expansion for fiscal 1997 includedthe opening of 59 Wal-Mart stores, 105 Supercenters (includingthe conversion of 92 Wal-Mart stores), nine SAMS Club units and38 international units. The majority of the sales increase resultedfrom Wal-Mart stores and Supercenters while internationa

305、l salesgrew to approximately 4.8% of the total sales in fiscal 1997 from4.0% in fiscal 1996. SAMS Club sales, as a percentage of totalsales, decreased from 20.4% in fiscal 1996 to 18.9% in fiscal1997.Costs and ExpensesCost of sales, as a percentage of sales, decreased .4% in fiscal1998 when compared

306、 to fiscal 1997 and increased .1% in fis-cal 1997, when compared with fiscal 1996. The decrease infiscal 1998 resulted from improvements in the mix of mer-chandise sold and from better inventory management.Operating efficiencies and the strong emphasis placed oninventory management has reduced markd

307、owns and shrink-age. Approximately .1% of the decrease in cost of sales was aresult of the sales contribution of SAMS Club. As its salesbecame a smaller percentage of total Company sales, the costof sales is positively impacted since their gross margin contri-bution is lower than the stores. The inc

308、rease in fiscal 1997when compared to fiscal 1996 is due in part to one-time markdowns in the third quarter resulting from a strategicdecision to reduce the merchandise assortment in selectedcategories. Cost of sales also increased approximately .3%due to a larger percentage of consolidated sales fro

309、m departments within Wal-Mart stores which have lowermarkon percents, and to our continuing commitment of alwaysproviding low prices. These increases were offset by approximately .2% because SAMS Club comprised a lowerpercentage of consolidated sales in 1997 at a lower contribution to gross margin t

310、han Wal-Mart stores.Operating, selling, general and administrative expensesincreased .3%, as a percentage of sales, in fiscal 1998 whencompared with fiscal 1997, and were flat in fiscal 1997 whencompared to fiscal 1996. Approximately .2% of the increase infiscal 1998 was due to increases in payroll

311、and related benefitcosts. Additionally, a contributing factor in the increase forthe year is a charge of $50 million for closing the majority ofthe Buds Discount City stores during the second quarter offiscal 1998. This charge was reflected in operating incomedue to its immateriality to our results

312、of operations andbecause we continue to operate eight Buds Discount Citystores. In fiscal 1997, operating, selling, general and administrative expenses increased approximately .1% due toa lower expense to sales percentage at SAMS Club comparedto Wal-Mart Stores. This increase was offset through expe

313、nsecontrol in all of the operating formats. Historically, computer software has been programmed tomakeassumptions about the century when given a date that only usestwo digits to represent the year. Although these assumptionshavebeen perfectly acceptable the past few decades, they arepotentialcause f

314、or concern for software used in the year 2000 andbeyond. Specifically,this abbreviated date format makes it difficult for an application or computer user to distinguishbetween dates starting with 19xx and 20 xx. The Companyhas initiated a project to address the year 2000 complianceissue for technolo

315、gy hardware, software and equipment.The assessment phase of our project is substantially complete.The majority of the compliance is expected to be performedby Company associates. Approximately 67% of the requiredconversions have occurred. We anticipate completing allremaining conversions during fisc

316、al 1999. The total estimated cost of theconversion is $12 million, which is being expensed asincurred. The cost of the conversions and the completiondates are based on managements best estimates and may beupdated as additional information becomes available. In addition,communications are ongoing wit

317、h other companies with whichour systems interface or rely on to determine the extent to whichthose companies are addressing their year 2000 compliance.Interest CostsInterest costs decreased in fiscal 1998 compared to fiscal1997 due primarily to lower short-term borrowings.Enhanced operating cash flo

318、ws and lower capital spendingenabled the Company to meet cash requirements withoutshort-term borrowings throughout most of fiscal 1998.Interest costs decreased in fiscal 1997 compared to fiscal 1996due to lower average daily short-term borrowings andthrough retirement of maturing debt. See Note 2 of

319、 Notes toConsolidated Financial Statements for additional informationon interest and debt.Sales (in millions) by operating segment for the three fiscal years ended January 31, are as follows: Fiscal YearWal-Mart StoresSAMS ClubInternationalOther(McLane)Total CompanyTotal Company Increase1998$ 83,820

320、$ 20,668$ 7,517$ 5,953$ 117,95812%1997 74,840 19,785 5,002 5,232 104,85912%1996 66,271 19,068 3,712 4,576 93,62713%23Market RiskMarket risks relating to the Companys operations resultprimarily from changes in interest rates and changes in foreign exchange rates. We enter into interest rate swaps tom

321、inimize the risk and costs associated with our financialactivities. The swap agreements are contracts to exchangefixed or variable rates for floating interest rate payments periodically over the life of the instruments.The following table provides information about our derivative financial instrumen

322、ts and other financial instruments that are sensitive to changes in interest rates. Fordebt obligations, the table presents principal cash flows andrelated weighted-average interest rates by expected maturitydates. For interest rate swaps, the table presents notionalamounts and average interest rate

323、s by contractual maturitydates. For variable rate instruments, we have indicated theapplicable floating rate index. Interest Rate SensitivityPrincipal (Notional) Amount by Expected MaturityAverage Interest (Swap) RateFair value(Amounts in millions)120022003ThereafterTotal1/31/98Liabilitie

324、sLong-term debt Including current portionFixed rate debt$1,039$815$2,018$52$559$3,747$8,230$8,639Average interest rate7.1%7.2%7.2%7.1%6.9%7.2%7.2%Long-term obligation related to real estate investment trustFixed rate obligation3639434650382596560Average interest rate8.4%8.4%8.4%8.4%8.4%8.4%8.4%Inter

325、est Rate Derivative Financial Instruments Related to DebtInterest rate swapsPay variable/receive fixed500500Average pay rate 30-day commercial paper non-financial plus .134%Average receive rate5.7%5.7%Interest Rate Derivative Financial Instruments Related to Real Estate Investment Trust ObligationIn

326、terest rate swapsPay variable/receive fixed3537417Average pay rate 30-day commercial paper non-financialAverage receive rate7.0%7.0%7.0%7.0%7.0%7.0%7.0%Interest Rate Derivative Financial Instrument on Currency SwapGerman DeutschmarksPay variable/receive variable1,1011,101(1)Average pay ra

327、te 3-month Deutschmark LIBOR minus .0676%Average receive rate 30-day commercialpaper non-financial24International OperationsA portion of our operations consists of sales activities in foreign jurisdictions. We operate wholly owned operationsin Argentina, Canada, Germany and Puerto Rico, throughjoint

328、 ventures in China and through majority-owned subsidiaries in Brazil and Mexico. As a result, our financialresults could be affected by factors such as changes in foreigncurrency exchange rates or weak economic conditions in theforeign markets in which we do business. We minimize theexposure to the

329、risk of devaluation of foreign currencies byoperating in local currencies and through buying forwardcontracts, where feasible, on known transactions.All foreign operations are measured in their local currencies with the exception of Brazil and Mexico, whichoperate in highly-inflationary economies an

330、d report operationsusing U.S. Dollars. Beginning in fiscal 1999, Brazil will nolonger be considered a highly-inflationary economy and willbegin reporting its operations in its local currency. In fiscal1998, the foreign currency translation adjustment increasedby $73 million to $473 million primarily

331、 due to the exchangerate in Canada. In fiscal 1997, the foreign currency translation adjustment decreased by $12 million to $400 million primarily due to a favorable exchange rate in Canada. The cumulative foreign currency translation adjustment of $412million in fiscal 1996 was due primarily to ope

332、rations in Mexico.Foreign Currency Exchange Rate SensitivityPrincipal (Notional) Amount by Expected MaturityFair value(Amounts in millions)120022003ThereafterTotal1/31/98Forward Contracts to Sell Foreign Currencies for US $Canadian DollarsNotional amount2424Average contract rate1.41.4Germ

333、an DeutschmarksNotional amount22Average contract rate1.81.8Forward Contracts to Sell Foreign Currencies for Hong Kong $German Deutschmarks (DEM)Notional amount11Average contract rate0.20.2Average currency exchange rate (DEM to US$)1.81.8Currency Swap AgreementsPayment of German DeutschmarksNotional amount1,1011,10130Average contract rate1.81.8The Company routinely enters into forward currencyexcha