Quarterly Earnings 101

In the Know

12 terms you might see in a financial report and what they mean.

two female sam's club associates smiling at the camera

Every three months Walmart releases its “quarterly earnings.” These reports include our sales, revenue, operating income and plenty of other financial details. It’s important information (and an opportunity to celebrate our hard work and success!), but they can also be hard to understand if you’re not used to the financial terms.

So let’s make our earnings easier to read by defining the most common terms!

  1. Revenue: Sometimes called sales, revenue is total amount of money a company makes from selling its products.
  2. Revenue Streams: All the different ways a company makes money. At Walmart, that includes product sales, private label sales, membership fees (like for Sam’s Club), financial services, in-store advertising and online sales.
  3. Expenses: Money a company spends to operate and sell its products. For example, Walmart’s expenses include paying for our stores to be built and to operate, paying associate wages and the cost of the trucks in our fleet.
  4. Profit: When you subtract expenses from revenue, any money left over is the profit. (If we had more expenses than revenue, that would be a “loss.”)
  5. Net Income: Net income is what you get after subtracting all expenses from revenue, including taxes and interest.
  6. Net Sales: This is the total sales after subtracting returns, allowances (a price reduction for a defective item) and discounts. Compared to net income, net sales doesn’t account for all expenses, like the cost of goods sold or other operating costs.
  7. Earnings Per Share (EPS): How much profit the company made for each share of its stock, usually reported per quarter or per year.
  8. Operating Income: This is the term for the profit a company makes from its business without taxes and interest factored in.
  9. Consolidated Operating Income: The profit Walmart makes from all of its stores and various revenue streams combined.
  10. Cost of Sales: How much Walmart spends on materials to make the products we sell. For example, in the bakery, the cost of sales would be the combined cost of flour, milk, eggs, and other ingredients.
  11. Comp Sales: Comp (short for comparable) sales show the difference in sales between two time periods. At Walmart, we look at sales from stores and clubs open for the previous 12 months, including remodels, relocations and expansions.
  12. Fiscal Year: The 12-month period each company uses for financial reporting. Walmart’s fiscal year starts on February 1 and ends on January 31 each year.

Now that you know the basics, don’t ever miss an earnings report. Sign up for the Walmart World email to get the next financial update direct to your inbox.

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