Walmart 2003 Annual Report Download - page 4

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A Letter
from the
President
2
To Our Shareholders, Associates
and Customers,
Without a doubt, fiscal 2003 was an
extremely challenging year. It was a
year marked by the threat of war and
terrorism, increased financial pressure
from rising fuel prices and corporate
layoffs, and even ethical misconduct
by a number of companies. However,
despite all this, Wal-Mart had an
excellent year.
In fact, thanks to our Associates,
Wal-Mart was able to report
record sales ($244.5 billion)
and record earnings
($8.0 billion) in one of
the most difficult business
environments in recent
years. More specifically,
these numbers represent
a 12.3 percent increase
in sales compared to
the previous year, and a
21.5 percent increase in
earnings per share. (On a
like-to-like basis, the increase
in earnings per share would have
been 16.8 percent after adjusting
for an accounting change for
goodwill.) We also met one of our
most important goals: for earnings
to grow at a rate equal to or better
than sales.
As I reflect on this performance,
I feel a deep sense of appreciation
for the Associates who made this
possible, and I likewise remain very
positive about the future of
our business.
Of course, any successful
year is underscored by special
contributions from key departments
and business areas. It is important
that we highlight a few of these
performances. Let’s start with
Wal-Mart International. This group
achieved sales of almost $41 billion
and an operating profit of more than
$2 billion. For perspective, if Wal-Mart
International were a stand-alone
company, it would rank number 33 on
last year’s FORTUNE 500 list based on
sales. Our international business also
has grown to be our second-largest
division in terms of sales and earnings,
trailing only the Wal-Mart Stores
division. Our international growth
opportunities are significant, and it
will be exciting in the years ahead to
watch Wal-Mart continue to develop
as a truly global Company.
One of our major growth initiatives
continues to be our food business.
Last year in the U.S., we added 192
Supercenters, and we have publicly
announced our intentions to add up
to 210 more in the current year. We
currently have Supercenters in all but
seven states. We also completed the
last fiscal year with 49 Neighborhood
Markets in eight states. We will
continue to be successful in this area
because our food strategy is so closely
aligned with our general merchandise
strategy. In both food and general
merchandise, we satisfy the Customer
with a consistent focus on price,
assortment and quality.
We also are making exciting strides in
two other important areas: internal
product development and global
procurement. Our product-development
team, working with Wal-Mart buyers,
is driving significant improvement
in key product categories such as
apparel, domestics and electronics.
Lee Scott