Q4 2025 Walmart Inc Earnings Call
Speaker Change: Greetings. Welcome to Walmart's fourth quarter fiscal year 2025 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation.
Speaker Change: If anyone should require operator assistance during the conference, please press star zero from your telephone keypad.
Please note, this conference is being recorded.
Speaker Change: At this time, I'll now turn the conference over to Steph Wissink, Senior Vice President, Investor Relations. Steph, you may begin.
Speaker Change: Thank you. Welcome, everyone. We appreciate you joining us and your interest in Walmart.
Speaker Change: Joining me today from our home office in Bentonville are Walmart CEO Doug McMillan and CFO John David Rainey.
Speaker Change: Doug and John David will first share their views on the quarter and then we'll open up the line for your questions.
Speaker Change: During the question and answer portion, we will be joined by our segment CEOs, John Ferner from Walmart U.S., Kath McClay from Walmart International, and Chris Nicholas from Sam's Club.
Speaker Change: For additional detail on our results, including highlights by segment, please see our earnings release and accompanying presentation on our website.
Speaker Change: We will make every effort to answer as many of your questions as we can in the hour we have scheduled for this call. As a courtesy to others, please limit yourself to one question.
Speaker Change: Today's call is being recorded and management may make forward-looking statements.
Speaker Change: These statements are subject to risks and uncertainties that could cause actual results to differ materially from these statements.
Speaker Change: These risks and uncertainties include, but are not limited to, the factors identified in our filings with the SEC.
Speaker Change: Please review our press release and accompanying slide presentation for a cautionary statement regarding forward-looking statements, as well as our entire Safe Harbor and Non-Gap Reconciliations on our website at stock.walmart.com.
Doug, that concludes my intro. We're ready to begin.
Doug McMillan: Good morning and thanks for joining us. We finished the year with another quarter of strong results. Our associates are doing a great job serving our customers and members. For the quarter, we had sales growth of 5.2% and adjusted operating income was up 9.4% in constant currency.
Doug McMillan: We continue to gain market share across countries and income levels.
Doug McMillan: As with the first three quarters of the year, transaction counts and unit volumes were up across markets.
Doug McMillan: As we look at our results for the quarter and the year, we're pleased to see, first, a healthy top line. We're strengthening our ability to serve people how they want to be served in the moment. That's what's driving our growth. Our prices are low and we're becoming more convenient.
Doug McMillan: Customers are shopping with us more often and buying more items, including in general merchandise categories, which were up low single digits in Walmart U.S. and Sam's U.S. for the quarter.
Doug McMillan: Second, we're growing profit faster than sales and we have runway to scale our higher margin businesses like membership, marketplace, and advertising. We're mixing ourselves up while simultaneously investing in lower prices and associate wages.
Doug McMillan: Third, we're able to improve ROI even as we invest higher levels of capital to take advantage of the opportunities we see to strengthen the company.
Doug McMillan: All three segments of our business had a good year. I'm proud of our leaders and all of our associates. They earned it. They're learning, they're acting fast, and they're working hard.
Doug McMillan: For the quarter-end of the year, we're pleased with our performance during the holiday seasons around the world. We performed well in the U.S., Mexico, Canada, and in China, where Sam's Club just wrapped up a strong Lunar New Year.
Doug McMillan: We also performed well in India, and I'd like to share the news that PhonePe, our fintech business, is making preparations for an IPO in India. Our PhonePe team has long aspired to be a public company, and we're excited to be taking these early steps.
Doug McMillan: As a company, we drove a lot of volume during the holidays and ended with our inventory level in good shape, up 2.8%.
As always, we're working hard to help bring down prices.
Doug McMillan: In Walmart U.S. last year, we had over 22,000 rollbacks. We're wired to help people save money and live better.
Doug McMillan: The work we're doing to expand our assortment is another reason for our growth, as more customers are finding what they're looking for.
Doug McMillan: In addition to low prices and a growing assortment to choose from, we're focused on delivery speed and accuracy. If I could change anything about how we're perceived today, it'd be that more people know about our breadth of assortment online and our increasing delivery speed.
Doug McMillan: For Walmart U.S., we recently announced same-day pharmacy delivery, and the early response has been strong. Customers love being able to get a basket of items delivered to their door that includes fresh, frozen, general merchandise, and now pharmacy. And because we're so close to them, they can get it fast.
Doug McMillan: Sam's Club recently launched a new shipping offer, including free same or next day delivery from the club. Members asked for it, and a team delivered. Listening to our members and solving for what they want is a big reason why Sam's was recently ranked number one in customer satisfaction for retailers in the latest American Customer Satisfaction Index.
Doug McMillan: Around the world, we're making great progress on delivering goods faster to customers and members. We're taking learnings from markets like China and quickly standing up fast delivery solutions in other markets.
Doug McMillan: We continue to be excited about our investments in supply chain automation, and we'll share even more on that topic during our investor conference in April.
Doug McMillan: These past few quarters we've talked about how we're using AI. The progress we've made over the years with technology has put us in a position to leverage today's fast-moving capabilities closer to real-time.
Speaker Change: I'm very proud of Suresh, our tech team, and all our leaders for how they're leaning in to adapt quickly. Today, I'd like to share two more examples. The first is related to a new AI agent for our merchants called Wall-E.
Speaker Change: Wally's learning to help us get to the root cause of issues related to things like out-of-stocks or overstocks with more accuracy and speed.
Speaker Change: Second, for developers on our tech team, we now have new coding assistance and completion tools that are helping streamline deployments and deliver code faster with fewer bugs.
Speaker Change: Last year, these tools helped us save about 4 million developer hours.
Speaker Change: This year we plan to make these tools available to all developers in North America and India.
Speaker Change: As we become more productive and reduce the amount of time we work on routine tasks, that gives us time to develop tools that help us grow the business and move faster.
Speaker Change: I love how we're changing how we think and work, without changing who we are. I can see us getting faster.
Speaker Change: Earlier this year, we began opening some of our new home office buildings in Bentonville. We'll be transitioning to the new home office throughout the year. It's an exciting time. It's also a time to remember the special things about this company that we want to strengthen and perpetuate.
Speaker Change: Moving to a new location doesn't change who we are. Cultural characteristics like servant leadership, humility, and a sense of urgency remain critical.
Speaker Change: Operating with an everyday low-cost culture and mindset is as important as ever.
Speaker Change: We have a meaningful purpose of saving people money and helping them to live better, and we have a set of timeless values that shape our culture regardless of the address of our home office.
Speaker Change: Characteristics and beliefs like these drive our results and make us unique.
Speaker Change: I hope you'll come see our home office when you visit during our Associate and Shareholders Week in June, and that you'll feel the momentum.
Speaker Change: We know who we are, and we like where we're going. We feel like we're just getting started.
Here's John David.
Speaker Change: Thanks, Doug. I'm excited to discuss our fourth quarter and full year performance, provide some context on how we're executing against our strategic priorities, and offer our outlook for the first quarter and full fiscal year 2026.
Speaker Change: Let's start with the headline, Walmart delivered another strong quarter, exceeding our sales, profit, and earnings expectations. This performance reflects the strength of our business model and the dedicated work of our associates around the globe.
Speaker Change: Our focus remains on delivering value to customers and members while driving sustainable growth for shareholders. Customers continue to respond to our value proposition as we provide lower prices, a broader assortment, and greater levels of convenience.
Speaker Change: With improved customer experience, we're earning their trust and seeing share gains as a result.
Speaker Change: Looking at the full year, consolidated revenue grew 5.6% in constant currency, adding approximately $36 billion versus last year.
Speaker Change: Adjusted operating income increased nearly 10% in constant currency, and adjusted EPS was up 13%.
Speaker Change: Currency was a headwind to reported sells of approximately $3.2 billion, or 50 basis points to growth, and pressured EPS by about two cents.
Speaker Change: Our business model is delivering as it's designed to do. This is the second consecutive year that we've grown sales more than 5% and operating income meaningfully faster.
Speaker Change: Relative to our plan, outperformance has been broad-based across segments. E-commerce economics continue to improve, most notably in Walmart U.S. Our newer digital businesses have contributed to faster growth and more diversification of our product mix.
Speaker Change: Over the last year, global advertising grew 27% to about $4.4 billion.
Speaker Change: Walmart U.S. marketplace revenue grew 37% with nearly 45% of orders fulfilled by WFS.
Speaker Change: And lastly, global membership income grew 21% to about $3.8 billion.
Speaker Change: Over our planning horizon, the growth of this portfolio is expected to be one of the largest drivers of operating income growing faster than sales. These new profit streams allow us to fund investments in our core business while also expanding our operating margins.
Speaker Change: Return on investment improved approximately 50 basis points to 15.5%, a level last achieved in 2016.
CapEx totaled $23.8 billion.
Speaker Change: Our investments in stores and clubs through remodels and new construction have improved customer and member experience and have enabled us to broaden our last mile catchment area for digital orgs. Investments in supply chain automation and productivity are expected to lower our cost to serve, which supports our EDLP commitment.
Speaker Change: Cash flow remains strong, and as we announced this morning, we're pleased to raise the dividend by 13% this year, the largest increase in over a decade, reinforcing our commitment to strong cash returns to shareholders.
Speaker Change: Our business has transformed over the past five years, and we're benefiting from the investments we've made in our core Omni retail business.
Speaker Change: Global e-commerce penetration is now 18% of sales, about 1,100 basis points higher than it was in FY20.
Speaker Change: In the U.S. specifically, we've built marketplace capabilities to broaden our assortment while also growing the average number of e-commerce orders fulfilled from stores by over 500 million orders without new store growth during that time period.
Speaker Change: We're utilizing our stores in new ways to serve more customers and maximize returns. But we obviously don't have a stores-only approach for fulfillment.
Speaker Change: We're growing our Fulfillment Center capacity, including through investments in FC automation in parallel.
Speaker Change: While the shift in channel mix creates some cost pressure as we fulfill more orders through e-commerce, we've seen improved profitability during this period with efficiencies gained as we densify our delivery routes and with the contributions from newer businesses that are enabled by e-commerce growth.
Speaker Change: We've achieved this despite the margin pressure for merchandise category mix of sales shifting toward grocery and health and wellness and away from general merchandise as consumer wallets have been stretched over the past couple of years.
Speaker Change: The way we've designed and grown our evolving business model, with more diversified and durable sources of profit like advertising and membership, has enabled us to grow operating income faster than sales, despite these headwinds.
Speaker Change: Turning to our quarterly performance. For the fourth quarter, consolidated revenue increased more than 5% in constant currency driven by strong results across segments, aided by 16% e-commerce growth.
Speaker Change: Currency headwinds reduced reported sales by over $2 billion, or 120 basis points of growth.
Speaker Change: Walmart U.S. comp sales increased 4.6 percent, including e-commerce sales growth of 20 percent, with ongoing share gains across categories.
Speaker Change: Comp growth was led by increased customer transactions in both stores and e-commerce.
Speaker Change: Grocery remains a standout category with mid-single-digit growth, and we saw mid-teens growth in health and wellness due largely to GLP-1 cells, which contributed about a point to the segment comp, consistent with prior quarters.
Speaker Change: We're encouraged by the improvement in general merchandise, where we had low single-digit comp sales growth for the second consecutive quarter, including strengthened hardlines, toys, home, and fashion.
Speaker Change: U.S. customers remain resilient, exhibiting behaviors that have been largely consistent over the past year.
Speaker Change: As always, people are looking for value, and they want to save time.
Speaker Change: Becoming more convenient is helping to drive our growth. During the quarter, we expanded our store-fulfilled delivery catchment areas to now reach 93% of U.S. households with same-day delivery.
Speaker Change: The popularity of expedited delivery has resulted in more than 30% of orders coming from customers and members that elected to pay a convenience fee to receive their scheduled delivery in less than one hour or less than three hours.
Speaker Change: We're also encouraged by the initial response to our launch of same-day pharmacy delivery. We're the first to integrate pharmacy, general merchandise, and grocery in a single online order and have gained new pharmacy customers with this service.
Speaker Change: Our focus on bringing down pricing through rollbacks continues despite pockets of food inflation in areas like eggs, bacon, and ground beef.
Speaker Change: Like-for-like pricing in general merchandise and consumables was deflationary, while food remained inflationary in the low single digits.
Speaker Change: We're seeing higher engagement across income cohorts, with upper-income households continuing to account for the majority of share gains.
Speaker Change: Our international business and constant currency delivered sales growth of 5.7 percent, reflecting strength in China, Womex, and Canada, while operating income grew faster.
Speaker Change: We saw positive traffic and unit growth across markets, with sales strength in general merchandise during festive events.
Speaker Change: As expected, the timing of Flipkart's Big Billion Days event negatively affected year-over-year sales comparisons. Outside of India, e-commerce sales grew more than 20% across all markets.
Speaker Change: Speed of delivery continues to be important to customers. In the past 12 months, International delivered over 2.3 billion items same day or next day, which is an increase of over 30%, with about 45% of those items delivered in under three hours.
Speaker Change: And our business in China continued to grow double digits with strength in Sam's Club and eCommerce.
Speaker Change: Sam's Club U.S. comp sales, xFuel, increased 6.8% with strong growth in transaction and unit volumes, including increased penetration of members mark.
Speaker Change: E-commerce grew 24%, including triple-digit growth in club-fulfilled delivery, as new perks like express delivery and the elimination of curbside pickup fees for the club membership level continued to resonate with members.
Speaker Change: With tech-enabled convenience prevalent both inside the club through scan-and-go and just-go exit towers, as well as via e-commerce, we're deploying digital solutions to differentiate ourselves in the Warehouse Club channel.
Speaker Change: From a margin standpoint, Consolidated Gross Margin expanded 53 basis points. In our press release and earnings presentation, you'll see new disclosure regarding gross margins by segment.
Speaker Change: In Walmart U.S., improved gross margins reflected strong inventory management as well as lower levels of markdowns and improvement in business mix that has allowed us to manage pricing aligned to competitive price gaps and offset sustained merchandise category mix pressure.
Speaker Change: Gross margins and international benefited from the timing shift of Flipkart's Big Billion Days event.
Speaker Change: As our business model evolves, it's encouraging to see our profitability improve from a diverse set of offerings.
Speaker Change: Globally, e-commerce economics continued to improve in Q4, aided by an approximately 20% reduction in U.S. net delivery costs per order.
Speaker Change: We also continued to diversify our profit composition through business mix as we scaled advertising, membership, marketplace and fulfillment, and data analytics and insights.
Speaker Change: Our global advertising business increased 29% led by 24% growth from Walmart Connect in the U.S. We're making good progress on expanding the number of U.S. marketplace sellers that also utilize Walmart Connect advertising with seller advertising counts up about 50% versus last year.
Speaker Change: We're also excited about the addition of Vizio and its SmartCast operating system to our portfolio of advertising capabilities.
Speaker Change: Vizio will help us serve customers in new ways to enhance their shopping journeys, while also creating new opportunities for advertisers to connect with customers and boost product discovery, empowering brands to realize greater impact from their advertising spend with Walmart.
Speaker Change: Membership income was up 16% across the enterprise. In the U.S., Sam's Club continued to grow membership count and increase its penetration of Plus members, resulting in more than 12% membership income growth, while Walmart Plus membership income grew double digits.
Speaker Change: Within international, membership income from Sam's Club China grew more than 35% as member counts continue to increase, helped by the opening of four new clubs in Q4.
Speaker Change: For Marketplace and Walmart Fulfillment Services, in the U.S., Marketplace grew 34 percent, continuing the strong trends we've seen all year.
Speaker Change: With the broader assortment of the general merchandise brands and items customers want, marketplace sales and home management, automotive and seasonal, all grew more than 20%.
Speaker Change: And with our low-cost fulfillment offering for sellers, WFS penetration reached record highs of nearly 50%, which is up nearly 600 basis points versus last year.
Speaker Change: Outside the U.S., we're seeing similar encouraging trends in both Mexico and Canada, the number of WFS sellers increased over 20% and sales of items delivered through WFS grew over 85%.
Speaker Change: Within data analytics and insights, Walmart Data Ventures continues to grow rapidly with net sales up double digits. Our client base nearly doubled over the past year, and we're excited about continuing to broaden our reach to new markets with the launch of the platform in Canada.
Speaker Change: SG&A expenses deleveraged 46 basis points in the quarter. Walmart U.S. deleverage was primarily driven by the timing of tech investments, increased variable pay as we exceeded planned performance, and higher marketing and utilities costs.
Speaker Change: Transaction related expenses for the Vizio acquisition also impacted the quarter and were not considered in our guidance.
Speaker Change: In addition, International was impacted by the timing shift of Flipkart's BBD event.
Speaker Change: and Sam's Club US was affected by the previously announced wage investments. While wage investments will pressure profit at Sam's for a couple of quarters, we're pleased with the member response tied to increased renewals as well as the improvement in associate turnover.
Speaker Change: We're continuing to optimize our business to deliver greater efficiency, and we're committed to balancing ongoing investments with improved returns for customers, associates, and shareholders.
Speaker Change: Summarizing the quarter, in constant currency, sales grew over 5% and adjusted operating income grew more than 9%, both exceeding the upper bound of our guided ranges.
Speaker Change: Adjusted EPS of $0.66 compared favorably to our expectations and reflected strong underlying business performance and lower tax expense.
Speaker Change: Reported EPS included headwinds of approximately one cent from currency and nearly one cent from cost related to the acquisition of Visio.
Now let me turn to guidance.
Speaker Change: We've been operating in a highly dynamic backdrop for several years, and we expect this year to be no different.
Speaker Change: Our outlook assumes a relatively stable macroeconomic environment, but acknowledges that there are still uncertainties related to consumer behavior in global economic and geopolitical conditions.
Speaker Change: As a result, we've taken a similar approach to our initial guidance view for the year as we have in the past couple of years, balancing known risk with what we can control.
Speaker Change: We remain confident that Walmart is well-positioned to navigate as it has over the last several years while continuing to deliver value for customers and shareholders alike.
Speaker Change: For fiscal year 2026, we expect consolidated net sales growth of approximately 3 to 4 percent, including the negative impact from lapping leap year and the favorable contribution from Vizio sales.
Speaker Change: Operating income is projected to grow faster than sales at 3.5% to 5.5%, including 150 basis points of negative impacts for the Visio acquisition related to integration investments and transition costs, as well as from lapping leap year.
Speaker Change: Adjusted EPS is expected to be in the range of $2.50 to $2.60. This includes a headwind from currency of approximately 5 cents per share and a higher effective tax rate compared to last year.
Speaker Change: Recall that we guide sales and operating income growth on a constant currency basis.
Speaker Change: Volatility and currency rates had a meaningful impact on last year's results.
Speaker Change: If current exchange rates were to prevail for the full year, we would expect a headwind of approximately 100 basis points to sales growth and approximately 150 basis points to operating income growth, with more significant headwinds in the first half given the degree of change in exchange rates versus last year.
Speaker Change: We expect CapEx to range between 3% and 3.5% of sales as we invest in technology to optimize our supply chain, remodel stores, and open new stores and clubs in both the U.S. and certain international markets.
for the first quarter.
Speaker Change: It's important to note that our year-over-year comparisons can have an outsized impact on quarterly growth rates.
Speaker Change: We expect consolidated net sales growth of 3% to 4% in constant currency. This includes the negative effect of approximately 100 basis points to sales growth from lapping leap year and accounts for the shift in Easter timing from Q1 into Q2 in our international portfolio, namely Walmex.
Speaker Change: Operating income is projected to grow 0.5% to 2% in constant currency, including the approximately 70 basis point headwind from the Visio acquisition, as well as the 250 basis point headwind to growth from lapping leap date.
Speaker Change: Our operating income guidance also takes into account the Easter timing shift and lapping last year's consumer stimulus timing in Q1 for walnuts.
Speaker Change: All of these items affect the year over year growth rates, but let me emphasize our core business is still performing very strong.
Speaker Change: On a two year stacked basis, the midpoint of our guidance would suggest operating income growth of 15%.
Speaker Change: Reflecting strength and consistency in the underlying business, we expect enterprise net sales and operating income growth to be relatively consistent across quarters. After adjusting for calendar impacts. Additionally.
Speaker Change: Additionally, we expect first half sales and operating income to grow in the range of our full year guidance.
Speaker Change: Notably if current exchange rates were to stay where they are for the entire first quarter. We would expect a headwind of approximately 150 basis points to sales growth and approximately 250 basis points to operating income growth.
Speaker Change: First quarter EPS range is expected to be 57 to 58.
Speaker Change: This includes a headwind from currency of approximately <unk> <unk> per share and a higher effective tax rate versus last year.
Speaker Change: As we've said in the past the relationship of operating income growing faster themselves may not occur every quarter that we expect the framework to hold on an annual basis at the enterprise level.
Speaker Change: Before I turn it over to questions I want to take a moment to thank our associates around the world for their hard work this past quarter and throughout fiscal year 2025.
Speaker Change: Their dedication and commitment to serving our customers and members everyday is what makes Walmart such a special company.
Speaker Change: As we look ahead to fiscal year 2026.
Speaker Change: I speak for the whole team here.
Speaker Change: We're incredibly excited about our business, it's not to say that there aren't challenges ahead, but our strategy is the right. One. This team is executing on it we're serving our customers and members better than ever before and our associates and shareholders are benefiting and yet in some ways. It feels like we're just getting started.
Speaker Change: We appreciate your interest in our company and are now ready to take your questions.
Speaker Change: Thank you, we'll now be conducting a question and answer session.
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Speaker Change: We may address questions as many participants as possible. We ask you. Please limit yourself to one question.
Speaker Change: Thank you and our first question is from the line of Michael Lasser with UBS.
Michael Lasser: Good morning. Thank you so much for taking my question.
Michael Lasser: The last several quarters as Walmart was in the early stages of generating returns from the longer term investments that it's been making it appeared that the company was more insulated to the macro as it was gaining significant market share now is Walmart entering a phase where there's just simply more economic.
Michael Lasser: Sensitivity to the model or perhaps even less of a counter cyclical benefit.
Michael Lasser: How is this factored in key sales and EPS guidance for 2026, and if this macro economic sensitivity results in a sales shortfall.
Michael Lasser: Of course of action.
Michael Lasser: Helpful to frame this with some.
Michael Lasser: Insight into how the exit rate for 2025 fiscal 2025.
Michael Lasser: <unk>. Thank you very much.
Michael Lasser: Hey, Michael This is Doug I'll respond quickly and then hand it over to John David basically we feel the same way we have been feeling customers members are going to be looking for value. There can be looking for convenience. The changes that we're making and the company continue to have us appealing to them in those respects and an even better way. So our confidence level is high I'm really pleased to see such a strong quarter being up.
Michael Lasser: Five and up nine on the Bottomline feels really good great to see that the momentum is still there stores and clubs still driving volume E. Commerce changes are happening. So I think it's really consistent in terms of our view of how we look at the external environment.
John David: Sure Michael This is John David.
Michael Lasser: With respect to the sensitivity of our model to the.
Michael Lasser: The macro environment I hope investors think differently about Walmart because our customers and members are telling us that they do we're not just known for value. We're also increasingly known for convenience. Our business is performing well you asked about how we exited the year January was actually our strongest comp in the U S business.
Michael Lasser: But this this increased relevance translates into improved financial performance for us as well.
Michael Lasser: As we grow these digital businesses like e-commerce, the incremental margins in our e-commerce business globally for us in the quarter or 11% twice the rate over twice the rate of what our overall margin is but let me address what is maybe the question behind the question as it relates to the outlook for next year our business out.
Michael Lasser: Performed on virtually every operational and financial metrics in the quarter, we feel like we are.
Michael Lasser: Performing exceptionally well the guidance that we provided we feel is very consistent with what we've done in prior years keep in mind each of the last two years, we've guided operating income of 4% to 6% growth annually. This year. If you normalize for the effect of leap day, and the Vizio transaction our guidance suggests an outlook of five.
Michael Lasser: 2% to 7% that reflects how we all feel about this business, we're really excited about.
Michael Lasser: What the year.
Michael Lasser: Holds for us and what we can do there we're one month into the year. So I think it's prudent to have.
Michael Lasser: An outlook that is somewhat measured we don't want to get ahead of ourselves there is.
Michael Lasser: Certainly some unpredictability in any environment that we have but we feel really good about our ability to navigate that we feel really good about our relevance with customers and we feel really good about how our business model is changing to inflect our profits upwards.
Michael Lasser: When you take that noise out of the guidance you can see that we're stepping things up a bit I think that reflects our confidence and to be in the position. We're in right now with this momentum on the topline and the Bottomline and inventory levels being so healthy where felucca in a great spot to start the year. The two 8% increase in inventory is what we would want our in stock levels look good we did put a little bit forward.
Michael Lasser: Around the edges, but we're selling to desktop quickly so really in a good place to begin February.
Speaker Change: Our next question is from the line of Kate Mcshane with Goldman Sachs. Please proceed with your question.
Speaker Change: Hi, good morning, Thanks for taking our question. Thank you had mentioned in the prepared comments that breast margins are still being impacted by mix. How should we think about the mix impact on gross margin.
Speaker Change: This upcoming fiscal year, especially as general merchandise growth continues gen tool.
Speaker Change: And just a second question Chi that alternative revenues.
Speaker Change: And any of those businesses now we scale and if not would you expect insurance scale.
Speaker Change: Please go ahead. Thank you and I think we get a lot of run room to run on the on the newer businesses. I mean, you can see our shares are are really low it would be great to have general merchandise and be strong you guys might want to comment a little bit on what Youre seeing right now sure sure. Good morning, Kate It's John.
Speaker Change: Thanks for the question.
Speaker Change: I would just start by saying that I'm really proud of our associates and our team for for the quarter that they just had up four six that compares to four a year ago and really excited about the way. They are taking care of customers momentum that they have in terms of mix. We we did have in the material that we are encouraged by their recent couple of quarters in general merchandise.
Speaker Change: Seeing better better sales better units, we're seeing unit flow through all across the box, which is great. We measure ourselves in units to ensure that we're delivering for our customers Doug.
Speaker Change: Doug mentioned inventory performance being up just about 3%, we're really pleased with that performance.
Speaker Change: As mentioned our in stock is better selling through and seasonal sell through has been really strong. The last couple of quarters, which has helped our gross margin I'm, obviously that results in savings of markdowns.
Speaker Change: On the pricing.
Speaker Change: I would just say again, thanks to the team we have.
Speaker Change: Over 58 under rollbacks in stores today over 1000 of those are new and just the last couple of weeks. So we remain focused on value and I think we're in a really good position to be able to deliver flex.
Speaker Change: Flexibly for customers any way they want to deliver and the team has done a great job understanding all the moving pieces and how they build that into the cost structure and I'm really proud of the way the teams position going into this year.
Speaker Change: Yeah, I think hey, it's Chris Nicholas here Okay.
Speaker Change: What I would say is we are seeing a lot of momentum John David talked about January being the strongest month of the quarter and we saw the same thing too we're investing across the member value proposition and it's really paying dividends and making it easier through digital engagement, making easier through the member experience, we are creating to buy <unk>.
The thing you want whether it's groceries, whether it's consumables, whether it's general merchandise or apparel, we see all resonating and it's interesting.
Speaker Change: Seeing a third quarter of GM comp growth, even though it's still a little deflated. So units are running ahead of comps and we're seeing strength in Tvs and technology in the apparel. So we're seeing we're seeing good strength on incredible items at incredible value. So it's not getting old.
And I would just say across international as I look at kind of GM sales had really strong jam south in key full particularly in events. So if I look across Mexico, and Canada. We saw really strong response from our customers, we had our largest sales day ever in wall Max.
Speaker Change: During El fin irresistible and a lot of the sales that we saw particular coming through GM and apparel, so happy with how that's all mixing out.
John David: Kate This is John David We obviously have a lot to say about this since we're all talking but.
John David: To directly answer your question over the last year, the mix changed for general merchandise and our business was down about 100 basis points. We're assuming this year its about half of that.
John David: But we're quite excited about what we're doing in general merchandise one of the things that we didn't mention was the benefit that our marketplace is providing there we have categories in our marketplace business like automotive.
John David: Toys patio that are all growing north of 20%. So these are good examples of things that are specific to Walmart and maybe not just a general macro effect of customers, maybe not having their wallet stretched as much but things that we're doing to provide better assortment to where our customers are buying more general merchandise.
Speaker Change: Our next question is from the line of Simeon Gutman with Morgan Stanley. Please proceed with your question.
Simeon Gutman: Hey, Good morning, My question is on reinvesting and growing the business faster.
Speaker Change: It was mentioned that the e-commerce incremental margins or 11, it looks like the enterprise in Q4 was $7 and if we think there is upward pressure on this overtime. So the idea of <unk>.
Speaker Change: Reinvesting at a healthy rate and growing earnings faster you can clearly do both which Doug called out a couple of years ago. The question is why not invest faster because of incremental margins are rising and top of funnel things like marketing and plus anything related to ecommerce should be even more profitable and higher returns and I think John David said, we're leaning in a little bit.
Speaker Change: If you could speak to that and then talk about this debate of investing at a faster rate.
Simeon Gutman: Simeon Thanks for the question I feel that we're striking the right balance right now between investment and margin expansion. There are some tables steak items in our business and that's investing in price investment in our associates, we're always going to do that.
Speaker Change: The more recent years, we've invested a lot in our technology platform as well as supply chain automation, but those investments are actually driving the improvements that you see in our results. This quarter you don't deliver the bottom line at twice the rate of growth as the top line without some of these investments that we've made so as we look forward and into the coming years, we certainly.
Speaker Change: See the type of opportunity and incremental margins that we've had this quarter and maybe even something beyond that but we can do that while investing for the business. We don't want to get overly focused on one.
Speaker Change: One quarter's performance at the expense of investing for the long term, we're trying to build a great company here continue to build a great company and drive these kind of returns for a long period of time and that requires investment.
Speaker Change: The next question is from the line of Kelly Bania with BMO capital markets. Please proceed with your question.
Kelly Bania: Good morning, Thanks for taking our questions.
Kelly Bania: Doug and John David you framed the 5% to 7% constant currency EBIT growth kind of excluding the noise from the vizio and leap year.
And it is consistent or maybe even slightly better than the past few years originally but it does seem a little conservative relative to what you achieved this year and into the momentum you have in the business. So I was wondering if you could just touch on two factors a couple of factors one.
Tariffs and just what you're assuming.
Kelly Bania: And how the consumer responds to that how are you planning on passing that through and it added.
Kelly Bania: Any sort of headwind to earnings this year.
Kelly Bania: And then also the demand for expedited orders that Youre seeing that continues I think to be helping the e-commerce profitability our U S.
Kelly Bania: Assuming that that continues at the same pace.
Kelly Bania: Or any changes there I'll, let Scott, let me talk a little bit about tariffs and expedited orders John David and then turn it over to you.
Kelly Bania: As we've been saying tariffs are something we managed for many years and we'll just continue to manage that we've got a great team. We know how to do that we can't predict what will happen in the future, but we can manage it really well and we're wired to try and save people money. So that'll be our ultimate ultimate goal and then as it relates to delivery speed, it's important and we're seeing behavior with our customers and members.
Kelly Bania: Around the world that causes us to be excited about what's possible and having these assets. So close to people is such a big advantage and the stores are doing a great job of improving order quality and delivering with speed and I think that that will just get better and better as things go through.
Kelly Bania: Through the year.
Kelly Bania: We will have is kind of simeon was pointing to flexibility.
Kelly Bania: We manage the year, we don't just start the year with a plan and execute the plan things change you may look at what's happening with generative AAM generated AI right now and the opportunity to to build code in different ways, we've got opportunities to save money get faster and we're making fluid decisions about how much we invest in technology what.
Kelly Bania: Do we put into wages and where what needs to be done on prices. This week and to have the business model be morphing. The way. It is just gives us the room to be able to do what we want to do strategically and manage the business for the mid and longer term not just the short term, while we deliver results each quarter growing profit faster than sales.
Kelly Bania: Kelly a couple of things, we don't have any explicit assumption in our guidance around tariffs, we feel like we'll be able to navigate that well.
Kelly Bania: Will it turn out differently than maybe what we expect today, perhaps and we feel good about our ability to do that though with.
Kelly Bania: With respect to the guidance.
Kelly Bania: Look I think similar to last year in the last couple of years very consistently and we have to acknowledge that we are in an uncertain time.
Kelly Bania: We don't want to get out over our skis here, there's a lot of the year to play out again, we feel good about our ability to navigate the environment, whether it's tariffs or other macro uncertainty on delivery with ecommerce like overall.
Kelly Bania: You are continuing to see this diversification of our business.
Kelly Bania: That is improving our profitability the newer businesses and buy newer businesses I'll just suggest like advertising membership wf fast some of those categories. They contributed to over half of the operating income growth. This quarter. So you're seeing this change in our business as we.
Kelly Bania: Leverage more of these digital channels a lot of the faster growing parts of our business are the higher margin ones Densification of our network as one.
Kelly Bania: So youre seeing is more customers avail themselves of the services that we provide same day delivery things like that and even paying for that if they want it within one hour of three hours. That's continued to improve our ecommerce profitability just in the U S alone just in the U S alone we saw an 80% improvement in the level of ecommerce losses in the lab.
Kelly Bania: Sure. So we feel really good about how the business is changing here.
Kelly Bania: Romney channel position really is an advantage, we're still seeing curbside growth, we're seeing in store and club growth and we've got this growth in delivery and being able to do all of those things all the time he is a big advantage.
Speaker Change: Our next question comes from the line of Chuck Grom with Gordon Haskett. Please proceed with your question.
Chuck Grom: Good morning, Congrats on a great quarter, and a great year and I was hoping you could discuss what youre seeing in Walmart plus membership and whether that's accelerated or held steady in recent quarters and then how much of the growth in Walmart plusses being driven by Walmart plus assessed and then separately.
Chuck Grom: Can you talk about the underlying assumptions you have in the next year for like for like inflation, both in grocery and within general merchandise. Thank you.
Speaker Change: Hey, Jack Good morning, John Furner, good to talk to you.
Speaker Change: They continue to be excited about Walmart plus suddenly pay consistent growth over the last couple of years, Alaska few quarters.
Speaker Change: The number of deliveries and the number of orders Theyre, placing continue to rise, which is which is great to see and.
Speaker Change: I just wanted to pick up at one point, we were talking about in the last question with fast delivery and then our same day.
Speaker Change: Our deliveries are under three hours in under one hour, we grew 180% year on year, which is really exciting. So we see that offer continue to grow in a large part of that offer is Walmart plus members plus members are seeing the value and we see the repeat rates coming through.
Speaker Change: Our same day delivery over over 5 billion units last year over 100% growth for the year and then the third thing that we mentioned this morning, which is really exciting to see how strongly it started as our pharmacy delivery program and we are seeing a lot of members and customers participate in this program and we think this will have a lot of momentum as the year.
Speaker Change: There goes and it's exciting to see the number of customers who are building baskets, while they have their prescription delivered and that's true for both acute prescriptions, where it may be have a sick child in Uni groceries with it or it's your regular prescriptions. So that's exciting to see and then the second part of your question.
Speaker Change: In terms of inflation, we planned at a very it's a normalized year and I know this is 1% to 2% and there will always be some anomalies like what we're seeing right now with eggs as a result of avian flu last fall those those two things tend to work themselves out over time. So we don't have a large inflation number planned into this year.
Speaker Change: Yes, maybe I know Chuck you didn't ask about it but seeing as we're talking about membership membership in Sam's club is at all time highs as our renewal rates and the reason for that is because of our incredible associates and because we're investing across the member value proposition. So.
Speaker Change: Our first year renewal rates. This year are up hundreds of basis points and so when we talk to you all about the associate investments and the wage investments was saying that paying dividend with turnover down 17, 100 basis points year on year. So yeah. Good things still to come for Sam's club too and then if you think about membership from.
Speaker Change: International flavor, if I look at Sam's club wary of straight membership membership income grew there by over 35% this year so strong resin.
Speaker Change: Resonating say they pay with the Sam's club, China business, but we also think about membership from a know your customer perspective and over the last year, we launched a program called beneficiary us in Mexico, and we have ahead of a 45 million customers sign up for that which enables us to know them to a night.
Speaker Change: I'll ask tell us that personalized services and offerings to them.
Speaker Change: Our next question comes from the line of Mike Baker with D. A Davidson. Please proceed with your question.
Mike Baker: Great. Thanks, I just wanted to ask about the <unk>.
Mike Baker: Overall consumer environment, what Youre seeing I think call. It was right. After the election, you had said that there was a little bit more consumer confidence after the election.
Doug in December you had said something about storm clouds lifting or something along those lines are you still seeing that is there anything changed in the last couple of months. It seems like the environment, maybe it's gotten a little bit more volatile volatile and related to that I know this is asked a lot, but I'll ask it again, the rollback number of 5800 seems to be a little bit less than it was in the law.
Mike Baker: Few quarters remind us how we think about that.
Mike Baker: I don't think its that youre investing less in price.
Mike Baker: To hear.
Doug McMillan: That explanation again, thanks, Mike. This is Doug let me clarify that further storm clouds thing what I said was we had seen clouds on the horizon and they never came and I kind of feel that same way right. Now, we're just seeing a lot of consistency.
Doug McMillan: Doug I agree with the consumer environment very consistent we mentioned the word resilient.
Speaker Change: Mixes as shifted slightly throughout the year, but really encouraged by the trends we saw in the last couple of quarters. So no.
Speaker Change: We are optimistic given all the things that we've done to improve our strategy working and omni is an exciting way to work on behalf of customers and what that means is we'll be ready to fulfill customers' wants and needs any way they want to whether it's in the store at the curb at their home, we're seeing growth rates across those and so we're ready for any environment. This is a team that's experienced.
Speaker Change: <unk>.
Speaker Change: Been through a lot of changes in the economy. The last five to 10 years and they know how to manage things really well. So we'll react accordingly, but we again, we see a consistent resilient consumer.
Speaker Change: The next question is from the line of Paul Lajoie with Citigroup. Please proceed with your question.
Paul Lajoie: Hey, Thanks, guys, you mentioned seen lower markdowns in the fourth quarter I'm curious how that came in relative to your plan and also what you assume about the promotional landscape, perhaps 26, whether you build in significant price investment into your guidance and just remind us how does that all shake out this year versus.
What you thought coming into the year and then just a bigger picture question you mentioned some.
Paul Lajoie: Increased investment in Canada, a few weeks back just curious how you view the long term opportunity of that market. Thanks.
Paul Lajoie: This is John let me pick up the question on margins markdowns first its really important for us that we can control and manage our inventory based on what our customers are wanting to buy the teams in the supply chain and stores film of centers that are really nice job flowing inventory. We've made a number of improvements with technology both in store.
Paul Lajoie: And across the supply chain to have a really accurate understanding of what we have where it is how quickly we can deploy that inventory for our customers.
Paul Lajoie: And so the results did show an increase in gross margin that we're proud of but there are some pieces there that are important.
Paul Lajoie: Gross margin for merchandise. There are also some other things in there like AD revenues and some things that increased margin that are part of our newer businesses are our new digital services. So our core margins are core Mark down management, we're proud of the way that we've managed that I feel great about inventory going into this year that that number.
Paul Lajoie: 800 robots as a large number of rollbacks, historically and that will fluctuate quarter to quarter again, we've added about 1000 in the last few weeks and we're prepared for all sorts of environments, whether it's more promotional or less promotional we're going to focus on value for our customers and we're going to do everything we can do to control prices and keep prices low.
Paul Lajoie: And if I pick up on Canada, I would say where it plays with the topline growth, we're getting in Canada, but one of the real highlights that may has been the E. Comm performance, which has been up 30% and and that growth has accelerated every quarter over the last year and so we are seeing our offering in Canada really resonating with the customer with <unk>.
Paul Lajoie: <unk> value, we were able to offer a Canadian Thanksgiving lunch for $40 40, Canadian dollars for full people and say really leaning into making sure we have the price positioning right, but also the.
Paul Lajoie: The customer is really responding from a convenience perspective. So we're excited about the business we have in Canada.
Speaker Change: Our next question is from the line of Seth Sigman with Barclays. Please proceed with your question.
Seth Sigman: Hey, good morning, everyone I wanted to ask about Vizio could you talk about some of the details around the dilution that you've embedded here and then perhaps discuss plans to integrate that how do you expect to leverage their platform and in general as you think about Walmart can act pretty incredible momentum there even really disciplined in building that out I'm just curious.
Speaker Change: Do you think about the growth outlook. Thanks, so much.
Seth Sigman: Sure Seth we're really excited about having the vizio team joined Walmart in what that new platform will do for our customers. We do have some dilution related to the transaction cost with that in the first quarter about 70 basis points.
Seth Sigman: We expect this transaction to be began being accretive to Walmart next year and so.
Seth Sigman: This will create new channels for us to reach out to our customers and allow them to avail themselves of all the thing that Walmart and Sam's provides but John you want to add anything else sure sure I'm I'm really excited about the addition of vizio to the Walmart family.
Speaker Change: William and the team for a long time, and it's just great to have them part of the team the operating system and Vizio is an impressive operating system. It works with very little friction, it's easy to set up an install at several lease personally and have acquired more since we started talking about this acquisition I'm just really pleased with the way it works for.
Speaker Change: The Walmart connect business to have more ways to distribute advertising for sellers and suppliers, that's really exciting for them and we hope to be able to do that in a very efficient way. So we're starting the process of integration and over this next year will be working on bigger plans for the brand as the teams get more time to work together.
Speaker Change: The next question is from the line of.
Speaker Change: La with Bernstein. Please proceed with your question.
Speaker Change: Alright, Thank you very much for taking a question.
Speaker Change: I guess I wanted to follow up on the ecommerce side.
Speaker Change: Just help us understand what are the top three trousers.
Speaker Change: Including ecommerce profitability between the alternative revenue streams and also reducing core e-commerce costs.
Speaker Change: And you mentioned retail media lenders yet.
Speaker Change: Kenneth following more than 50% of EBIT growth are you able to share what proportion of EBIT dollars.
Speaker Change: From the hone level alternative revenue streams. Thank you. Let me give you a couple of data points here starting with the last part of your question. So if you just take.
Speaker Change: Advertising and membership just those two categories that was a little more than a quarter of the overall operating income for us in the quarter.
Speaker Change: So really encouraged about.
Speaker Change: These new parts of our business in terms of the drivers of ecommerce profitability in no particular order there are a few things that I would call out.
Speaker Change: One is the Densification of our network so think of this of.
Speaker Change: It is one of our drivers instead of delivering a package to one house on the Street is now heading for a five houses on that street. So we're able to spread those costs over more volume and as more customers come to us. This is really improving the unit economics here the second area would be.
Speaker Change: The fact that over 30% of our customers that are having something delivered from a store are paying something extra to have that delivered within one hour or three hours on Christmas Eve, 77% of the orders.
This express type delivery, so that that certainly helps with the unit economics, there and the third area are these newer parts of our business like membership like advertising that continue to have a lot of runway and improve our margins.
Speaker Change: Our next question is from the line of Edward Kelly with Wells Fargo. Please proceed with your question.
Edward Kelly: Hi, good morning, everyone.
Edward Kelly: I wanted to start just with a follow up on that question around E com.
Edward Kelly: Economic so incremental margin of around 11%, obviously at good margin.
Edward Kelly: What does that look like over time does that grow how do we think about.
Edward Kelly: E Commerce are all returning to profitability or I should say.
Edward Kelly: Attaining profitability and then.
Edward Kelly: As we look out over time.
Edward Kelly: In addition to that just kind of curious issues like immigration does that.
Edward Kelly: How are you thinking about that any any impact.
Edward Kelly: Let me add this year.
Edward Kelly: Ed This is Doug when you look at the second P&L as we've described it it ends up being more profitable than the first P&L first P&L being kind of the traditional retail store P&L. When you put together e-commerce components like membership and advertising data monetization all of the things that we get to do as we scale in E Commerce business. That's both first part.
And third party by the way it just lifts the overall operating income percentage of the business and that's what's happening. So the key is to keep the foot on the gas as it relates to ecommerce growth serving people how they want to be served and as I mentioned a minute ago.
Edward Kelly: The great thing about omni is however, if someone wants to shop in the moment, we can help them. We want to go to a store club, where they are and we're close to you do you want to do curbside pickup you can you want to get delivered in variety of forms we can do that too I mean.
Speaker Change: As it relates to immigration and it hasnt been anything thats.
Speaker Change: Impacted us in any way that we could share anything interesting hits its a non event for us so far.
Speaker Change: Our next question is from the line of Robbie <unk> with Bank of America. Please proceed with your question.
Speaker Change: Oh, Hey, thanks for taking my question.
Speaker Change: I think this might be for John David Rainey, just operating expenses Delever at I think it was 50 plus basis points in the fourth quarter, excluding the Ob.
Speaker Change: Opioid settlement can you can you just help us tell us how we should think about.
Speaker Change: The SG&A ratio for Walmart.
Speaker Change: The puts and takes.
Speaker Change: Opportunities to be better than expected this year versus worse, but also the sort of way, we should think about that long term for Walmart.
Sure Robbie it's good to speak with you to start with I think we need to be grounded in how our business is changing I talked about in my prepared remarks that our business is 18% E. Commerce right now that's a 100 basis points higher than it was five years ago. The SG&A related to a digital transaction in E Commerce transaction.
Speaker Change: It's higher than it is for brick and mortar. So historically, we thought of our business. When it was more brick and mortar is 20% or maybe slightly below that was a good way to think about the cost profile of that business as our business moves more digital is going to create pressure there.
Speaker Change: A channel mix equation.
Speaker Change: But at the same time, we've got a hyper focus as we always have on everyday low cost.
Speaker Change: But we have an opportunity to make investments in the business as well if you look at the fourth quarter marketing is an area that stands out that we invested a little bit more heavily into it also drove some of the improvement that we saw in general merchandise.
Speaker Change: But fundamentally as you think about our cost structure going forward one of the big drivers is going to be the improvements that we see in supply chain automation, we're already seeing that.
Speaker Change: We're encouraged by some of the early productivity metrics, but still today less than half of the stores in the U S are served fully by automation and so theres a lot of benefits still to come here as we automate our supply chain as we continue to automate our stores.
Speaker Change: That will drive improvements in SG&A. We're excited to show you a few facilities in Dallas in April Youll remember that trip to Florida. Those of you that came I think we're going to have a similar positive experience when you see what we're doing there.
Speaker Change: Our next question is from the line of Cory <unk> with Jefferies. Please proceed with your question.
Cory: Hi, Good morning, and thank you for taking my question.
Speaker Change: Doug you had mentioned some exciting news regarding <unk>.
Speaker Change: I was wondering if you could share any details around the business around the growth of profitability today.
Speaker Change: And then just as another question John David in your prepared remarks, you mentioned that ROI is an interesting stat.
Speaker Change: It's the highest it's been since 2016.
Speaker Change: Is there a way to maybe put into context.
Speaker Change: How just how high you think.
Speaker Change: Roy can go and where some of these newer investments ranked as you think about the trajectory for your return on investment. Thank you so much.
Speaker Change: I'll pick up the one on just on <unk> pay I mean, if I'm pay business.
Speaker Change: Hum.
Speaker Change: By the end of 31st of January and hit 1.7, Chilean T. P V and they have something like 310 million transactions daily So very strong business.
Speaker Change: And we're excited to make the announcement that they are going to commence the preparation towards the IPO. That's a significant milestone for <unk> I think he is also going to celebrate its 10th anniversary. This year. So their business spans by financial services through the technology installations.
<unk> <unk>.
Speaker Change: Excited to be able to make that announcement.
Speaker Change: On ROI.
Speaker Change: I think we're fortunate to be a 63 year old company that has the type of opportunities to invest in itself and drive the returns that we see I mentioned supply chain automation is one example, but there are many but these are returns that are approaching 20% in some cases the standard that we're holding ourselves to is that we want to.
Speaker Change: See our ROI go up every single year.
Speaker Change: And we've seen that result over the last couple of years and so I would hope that we'd be able to get to historical highs over some period of time, but we want to continue to see these investments pay off with our ROI going up.
Speaker Change: Thank you.
Speaker Change: Questions from <unk>.
Speaker Change: <unk> with Oppenheimer. Please proceed with your question.
Speaker Change: Good morning, and thanks for taking my questions I'll be quick here just as we look forward. This year I think free cash flow was down versus last year, just wanted to get a sense. If we're getting closer to a positive free cash flow inflection and then we just see an increasingly dividends. So just any updated thoughts on capital allocation going forward.
Speaker Change: Sure I'll take that refresh good to speak with you.
Speaker Change: We do feel like we're getting really close to both an earnings and a free cash flow inflection as you look at the benefits of a lot of these changes in our business just becoming larger as the composition of our overall business.
Speaker Change: And hopefully our capital allocation reflects the conviction and excitement that we have in our business, we announced a 13% increase in our dividend. Our plan. This year assumes that we're going to buyback more stock than than we did last year and certainly if the early reaction to today's announcement is any indication we have an opportunity to re.
Speaker Change: Right now.
Speaker Change: But we're also going to invest in our business with Capex and so I think we can be very balanced there going forward.
Speaker Change: With both returning cash to shareholders and investing in ourselves.
Speaker Change: Thank you at this time, we've reached yet another question and answer session I'll turn the call over to management for closing remarks.
Doug McMillan: Yeah. This is Doug John David Just mentioned held we are and what went through my mind was we feel young like if you look at what's happening around the company, whether it's what we're doing with tank car moving to this new office location Theres, a lot of freshness and newness and the momentum is helping to fuel that we're really pleased to see that the consistent momentum in.
Doug McMillan: Fourth quarter showed up in our results. We're obviously known for saving people money, but we're increasingly saving them time and that matters and it's driving our growth.
Not only are our is the team executing in the short term with things like unit growth and market share improvements.
Doug McMillan: Pricing investments and inventory management, but they are building for the long term and seeing ROI grow at the same time and I'm really impressed by that and grateful for that it's awesome to be in the position. We are for international International has got a really bright future had a really strong year, yet again on top of strong years in the past all three segments had a good year.
Doug McMillan: So we feel like we're in a good spot to start the year and we'll just stay focused on on playing offense and making the most of our opportunity. Thank you all for dialing in.
Doug McMillan: This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.