Back to Home Page

To our shareholders, associates and customers:

When I look back over this past year, one thing stands out very clearly. The hard work and exceptional efforts of our two million associates, managers and leaders around the world paid off by year-end. In fact, the year really took off during the second half. What brought it all together was Wal-Mart living the mission of saving people money so they can live better. Whether it was in the United States, the United Kingdom, Mexico or Brazil, we positioned ourselves as the unbeatable price leader. Our customers appreciated it and our shareholders understood it.

Lee Scott
Lee Scott
President and Chief Executive Officer

In a more challenging economic and competitive environment, we drove the right strategy for our customers and for our business. And with the economic environment unlikely to change this year, the same opportunity is continuing to present itself.

Fiscal year 2008 ended as another record year for your Company. Total net sales increased 8.6 percent to $375 billion. We added about $30 billion in sales, which is equal to adding the annual sales of a Fortune 75 business. Even more impressive, Wal-Mart exceeded $100 billion in sales during the fourth quarter - a first for any global retailer. And, we accomplished this during a quarter when most of retail was going in the other direction.

Our earnings were strong. Earnings per share from continuing operations for the fiscal year were $3.16 per share, up from $2.92 per share last year. We also delivered a record return to our shareholders through more than $11 billion in share repurchases and dividends.

In addition to our pricing strategy, we were able to deliver a record year by making progress in a number of other areas. The management team began implementing a new capital efficiency model and is now being more precise in deciding which projects we pursue and how those projects drive value for our shareholders.

Gaining Momentum

Sales increased 8.6 percent to $375 billion. We added about $30 billion in sales, which is equal to adding the annual sales of a Fortune 75 business. Even more impressive, Wal-Mart exceeded $100 billion in sales during the fourth quarter - a first for any global retailer.

Wal-Mart Stores U.S. finished the year with a strong second half, particularly in grocery, health and wellness and entertainment. Apparel and home are expected to continue to improve steadily this year. Eduardo Castro-Wright and his team put a real emphasis on improving operations and merchandising management. Eduardo's management team was strengthened through internal promotions and external recruitment. Improvements in U.S. marketing also were a very positive force. In the United States, the team executed in a way that followed some of Sam Walton's best advice: “The secret of successful retailing is to give your customers what they want.”

Sam's Club made a strong contribution to the Company's results and, under Doug McMillon's leadership, had a record year in its own right. Wal-Mart's mission of saving people money so they can live better applies equally to Sam's Club. Small businesses have always relied on Sam's Club to thrive and did so even more in the past year to get through some tough times.

In Wal-Mart International, Mike Duke and his team continued to drive exceptional sales growth around the world, totaling $90.6 billion at year's end. The strongest underlying sales performance in the fourth quarter came from Canada, China, Brazil and Argentina. ASDA in the United Kingdom also continued to deliver positive results. Internationally, the management teams in each country have significant expertise in their markets. Each individual country president has strength behind them, and this will help us continue to grow the Wal-Mart markets outside the United States.

Making a Difference

While achieving all of this in our business, Wal-Mart also made progress on societal issues that are important to our associates, our customers and the communities we serve. We have a greater responsibility in the world. Costs for energy and healthcare continue to rise. Concern about our planet's future is discussed in every
corner of the globe.

Wal-Mart became a much more environmentally responsible Company through our "Sustainability 360" approach. Just one example is that during the past 15 months, our U.S. stores and clubs sold 145 million energy-efficient bulbs - enough to eliminate the need for nearly three new coal-fired power plants in the United States. Only Wal-Mart can have this kind of an impact. We will follow through on the commitments I made earlier this year on energy efficiency and sourcing.

In healthcare, I am especially proud of the effort to improve our associate benefits in the United States. We have increased significantly the number of associates with some form of health insurance, from 90.4 percent last year to 92.7 percent this year. We also know healthcare is a huge challenge facing our customers, and Wal-Mart has a role to play through offering more efficient services to employers, helping customers save money through our $4 prescription program, opening health clinics in our stores and engaging in the broader public policy debate.

It is important for a company like Wal-Mart to step up to make a difference in our communities. Even if governments can't or won't address key issues, it is critical for corporations to take the lead. Our associates and our customers expect nothing less. And they should have high expectations when they go to the polls in the United States this election year.

As the world's largest private employer, Wal-Mart has the responsibility to lead in important areas such as diversity. Our teams must reflect the communities we serve. Our associates deserve to succeed as far as their hard work and skills can take them. In the past year, we have continued to provide real opportunity in the workplace around the world. For example, China continues to make progress in hiring and promoting women. We strive to achieve a more diverse workforce in all demographic groups in the United States. Regardless of race, gender or where you live, each associate has the opportunity to grow and succeed at Wal-Mart.

Better Positioned

I am optimistic about our future because I know that customers everywhere will continue to depend on Wal-Mart to save them money so they can live better.

Because we are a global company, Wal-Mart is better positioned today than ever before to deliver on our mission. I am optimistic about our future because I know that customers everywhere will continue to depend on Wal-Mart to save them money so they can live better, whether they are among the aging population or the growing middle class. Our price leadership position helps those willing to improve their lives through hard work move up the economic ladder.

Above all, however, I am optimistic about Wal-Mart's future because of our associates. What they have been able to achieve during this period of transformation for our Company is remarkable. Never once have they wavered. And because of that devotion to our Company, our shareholders, and the customers and communities we serve, I know that we have only just begun.

Lee Scott
Lee Scott
President and Chief Executive Officer
Wal-Mart Stores, Inc.

© 2008 Wal-Mart Stores, Inc.     702 S.W. 8th Street     Bentonville, Arkansas 72716 USA     |     479-273-4000