Good morning and welcome to Walmart's 2021 Investment Community Meeting. Thank you all for joining us on the webcast. We appreciate your interest in Walmart. I know the executive team looks forward to sharing their strategies with you and answering your questions. Now, let me get a few of our usual statements out of the way. The information presented at today's meeting should be viewed in conjunction with our press release and earnings materials that can be found on our website. The presentations will also be posted on our website as they are completed. Today's presentations include forward-looking statements that are subject to future events and uncertainties which could cause actual results to differ materially from these statements. Please reference our entire Safe Harbor statement and non-GAAP reconciliations which are included with our earnings materials on our website. Hopefully, you've had a chance to review our earnings materials and guidance issued this morning. You can see today's agenda on your screen, and in a moment Doug McMillon, Walmart's President and CEO will share some initial thoughts with you about our culture, our people and our opportunities. And then he'll be back to discuss Walmart's strategic objectives after you hear from our CFO, Brett Biggs. Brett will discuss Q4 results and fiscal year 2022 guidance and then we'll conduct our first of two Q&A sessions today. We'll have a brief 10 minute break following the Q&A session and then you will hear from several other leaders who will discuss our priorities and strategies across the business. Following these presentations, we will have another brief break and then we will conduct our second Q&A session. And at the end of that session, our formal meeting will conclude. With that, let's get things started.

Hello, everyone and thank you for joining us for our 2021 investment community meeting. We are grateful for your interest in our company and for the confidence so many of you have in our future. We believe that confidence is well-founded and we are excited to give you an update on the opportunities we see ahead. I've been a part of Walmart for more than 30 years now and I can't remember a time when there was so much exciting change happening inside our company. The world around us is changing in big and important ways and I'm so encouraged by how our associates are leading and embracing change. We have a blend of experience and new thinking that are coming together to allow us to execute with more creativity and speed. We aren't the business we were just a few years ago, and we aren't the business you'll see in the years ahead; we are moving. David Glass was a CEO that followed Sam Walton. He led us into the food business and got us started outside the United States. In the 1990s, I remember him telling us repeatedly that the company was just getting started. Every time I would hear him say it, I would think, really? We were already large by then, and so much had already happened. But today I can tell our associates the same thing; there is so much opportunity still in front of us. We have the talent, the culture, and the assets to thrive in the next generation of retail to invent it. We’ve been building for this moment, and the moment is here. It's up to us. We can make it true that in 2021 this company was just getting started. I know many of you have been investing in and following Walmart for a long time and you know a lot about our company. This is a different business today and we are just getting started; we are moving. Looking back at 2020, I’m so proud of how our big team has responded to the challenges. They just keep stepping up. It feels like our customers and society have come to appreciate our associates more than usual, and that’s well deserved. So many have been selfless and courageous. We’ve tried to show our frontline associates in our stores, clubs, and supply chain our respect and gratitude with our words and our actions. They, along with our customers, our shareholders, our suppliers and partners, the communities we serve and the planet we seek to strengthen, shape our decisions. We take a multi-stakeholder view because we know that mindset and approach deliver the most valuable, sustainable business over time. As for today, Brett will join us in a moment to talk about our results for the fourth quarter as well as to provide an outlook on our expectations for the next few years. I'll come back after his remarks to talk through the acceleration of our strategy and how we will deliver sustainable long-term growth. Then you will hear from several of our leaders about the specifics of our plan. I’m confident you will leave this session with a clear understanding of a few key points. First, innovation and speed. It's time for us to dial up our aggressiveness even more and go faster. Walmart is in a position of strength and we have momentum. Our confidence in our plan motivates us to accelerate and we will walk you through why we feel that way. Second, we are building a new customer-centric business model. Our customers welcome us serving them in new ways, and our assets and capabilities are being monetized in ways we haven't tapped into before. We have assets to leverage like our stores and supply chain, strengths like our store traffic and a brand trusted for value. We have foundational cornerstones like EDLP and EDLC. We can stay true to who we are and build on our strengths while building a mutually reinforcing flywheel. We are starting to drive the top and bottom line in more expansive ways. Our bottom line is becoming more diversified, which will enable us more operating income growth over time. We are repositioning to be in different businesses and exiting some geographies so resources are shifted to our priorities. We are building a better model, and it's uniquely Walmart. Third, we will continue designing this business to create shared value for all our stakeholders. We are out to demonstrate that our company can do even more good for people as we grow; communities are strengthened, customers, associates, shareholders and suppliers benefit. Everyone wins. I will be back to share more specifics on the strategy in a few minutes. Now I would like to welcome Brett to add his view on the quarter and the future. Brett?

Good morning and thanks, Doug. I’ve been with Walmart for more than two decades and this is one of the most challenging and unique times we've all faced. However, it's also a time that presents great opportunities, and I'm looking forward to highlighting some of those for you this morning. I'm so proud of how our associates have responded in serving customers while accelerating our strategy. The recent progress in transforming Walmart into a truly omni-channel business prepared us for this period and it helped shape our future. This is an important moment for Walmart and we are ready. There are several things I want you to take away from this morning. First, we have great momentum. We just completed a year with record sales of $560 billion in constant currency including record fourth quarter sales of more than $150 billion and record operating cash flow of $36 billion. Profit growth was also strong, thanks to a number of things; strong sales, in particular improving general merchandise sales, improving eCommerce margins, and improved margin mix overall. Certainly we had tailwinds during the year, but we are performing extraordinarily well. This strong performance has allowed us to invest in the future of the business, invest in our associates, and give good returns to shareholders. From a position of great strength, we are now going to accelerate investments in supply chain, technology, automation, and our associates, allowing us to stay ahead of shifts in customer behavior. We strongly believe these investments will accelerate the company's top line and profit growth in the mid to long-term. Active portfolio management is also strengthening the model and focusing resources. And we remain laser-focused on operating efficiency and delivering sustainable expense leverage. So let's turn to highlights of the fourth quarter and the year. During the year, we saw elevated sales levels related to customers stocking up, eating at home, entertaining and educating at home, and investing in home decor or their yards. And of course those things were supported by stimulus spending. In parallel, we had incremental COVID costs, some of which will continue. We had a strong holiday season followed by an acceleration in January. Total constant currency revenue was strong, increasing more than $10 billion for the quarter and $40 billion for the year. Walmart U.S. comp sales excluding fuel grew 8.6% in both Q4 and for the year, including 79% annual growth in eCommerce. Walmart U.S. grew net sales by $29 billion for the year. Now for context, that is similar to the annual revenue of Dollar General and Starbucks. Sam's Club wrapped up a terrific year with full year comp sales growth of 15.8%, excluding fuel and tobacco and membership income increased more than 9%. On its own, Sam's Club would rank near the top 50 in the Fortune 500. Outside the US, sales increased 6.3% in constant currency for the quarter, including 60% eCommerce growth with strength in India, Mexico and Canada. Seven of nine markets posted positive comp sales, and for the year international net sales grew more than $6 billion in constant currency. Adjusted operating income on a constant currency basis declined about 3% in the quarter and was pressured by more than a $1 billion of incremental COVID expenses including associate bonuses, as well as a charge of around $220 million related to a decision to repay U.K property tax relief granted earlier in the year. The fourth quarter also included some increased tech expenses and increased wage pressure related to recently announced structure changes in Walmart U.S., as well as additional head count to ensure our holiday season was a success, which it was. Excluding the U.K charge, total company adjusted operating income would have increased. Despite various headwinds, Walmart U.S. adjusted operating income increased 6.5% on solid gross margin improvement and continued reduction in eCommerce losses, as well as some benefit related to timing of allocations. For the year, adjusted operating income increased over 9% in constant currency with each segment growing significantly despite more than $4 billion of incremental COVID costs. Q4 adjusted EPS was $1.39, but would have been about $0.37 higher if not for COVID costs and the U.K property tax repayment. GAAP EPS was a $0.74 loss, significantly impacted by the loss on businesses in the U.K and Japan as both are classified as assets held for sale that's partially offset by an unrealized gain in our investment in JD.com, the value of which has increased by $9 billion since our initial investment. Operating cash flow for the year was exceptionally strong at $36 billion, and the company returned $8.7 billion to shareholders through dividends and share repurchase. So in summary, it was a great year financially and on an underlying basis, it was a strong finish. Let's now talk about how we plan to continue the strong momentum. Because of our financial strength, competitive position and ability to execute, we're in a unique position to continue innovating and serving customers in multiple ways. Over the past several years we've made great progress building an ecosystem of synergistic assets, and we've made strategic choices like reducing exposure to lower growth international markets while focusing on higher growth opportunities in the U.S., Mexico, and India. Now is the time to play even more aggressive offense. We are winning, and we intend to keep pushing the ball aggressively down the field. Over the next few years we are going to step up capital investment primarily in the U.S to improve the customer experience, support growth, and drive efficiencies. I will give you some highlights and you will hear more as the morning progresses. As I mentioned earlier, our revenue grew $40 billion last year, putting us at least a year ahead of where we thought we might be. So we need to lean in more aggressively in key markets with increased capital and fulfillment capacity, supply chain, automation, and technology. This new infrastructure will allow us to expand eCommerce assortment, enabling us to reduce both shipping time and cost. We will step up automation in DCs to deliver aisle and department-ready pallets, stores. We will continue to refresh our existing stores by enhancing pickup and delivery capacity, merchandising programs and efficiency initiatives. In India, we see significant growth opportunities for Flipkart and PhonePe. It's exciting to see the emerging middle class rapidly adopting eCommerce and using their mobile phones to use money transfer, insurance, and other services. Meanwhile, we will step up technology investments to continue upgrading legacy enterprise systems and customer-facing technology. We are on a multiyear journey of modernizing our tech stack and capabilities to increase the efficient use of the cloud and simplify customer and associate experiences. As we accelerate investment, CapEx is expected to be around $14 billion this year with most of the increase versus last year in the U.S. Over the next few years, we expect CapEx to be around 2.5% to 3% of sales. While this is higher than the past few years, it is far below the CapEx peak of 4% to 5% of sales during the period of heavy supercenter growth. This spend will allow us to fully optimize our strategy, and in turn accelerate the company's top line and profit growth rates in the mid to long term. After a year or so of transition, these investments should put us in position for 4% plus sales growth and operating income growth rates higher than sales. 4% top line growth would basically be the equivalent of adding a Fortune 100 company every year. Our unique financial strength allows us to continue to deliver strong returns to shareholders while growing the business. And as you saw this morning, we increased our dividend for the 48th consecutive year and we authorized a new $20 billion share repurchase program, which we plan to execute over the next three years or so. There are so many initiatives underway that give us confidence that these are the right investments at the right time. We are already seeing proof points, and you'll hear more about these later on. We expect continued strong growth in the U.S businesses and expect even higher international growth rates as we focus on key markets and making money in new ways. We will continue improving margin mix through an enhanced general merchandise offering, new brands and marketplace growth with a greater push towards expanding fulfillment and other services for sellers. We will drive existing and new customer growth through initiatives like Walmart+. We will grow sales and profit increasingly with growing higher margin businesses in advertising, financial services, marketplace, health care services and the like. Our operating discipline will continue to sharpen. After a pause in FY '22 primarily because of additional wage investments, I expect expense leverage to continue at or above 20 basis points a year. Let me turn now specifically to our expectations for this current year. We feel very good about the underlying business and ability to compete from a position of strength. However, we are still facing similar COVID-related challenges, absolutely have over the past several quarters which caused us to suspend guidance, and continues to make short-term guidance very challenging. Despite that we want to give you the best view we can at this time given what we know and what we see right now. We know we will have both headwinds and tailwinds this year, the balance and degree of which isn't clear. As the year progresses, we hope to get more clarity around COVID impacts, vaccine efficacy and availability, the scale and duration of economic stimulus and the mid-term economic climate globally. Even if conditions stay generally similar to now, for any length of time this year and with limited additional stimulus, we would expect continued solid underlying performance from Walmart U.S. with low single-digit comps and continued solid eCommerce sales growth. Low single-digit comps would result in around a 10% comp growth on a 2-year stack basis. So, very healthy growth. We would expect the level of comp growth to be more heavily weighted toward the middle of the year as a result of the timing of COVID-related demand and stimulus in FY '21. Now of course that could look different depending on future stimulus and/or significant changes in customer spending patterns as the COVID crisis hopefully moderates at some point. The comparisons against last year are unique. There were stretches that were really strong and others less so, driven by how people responded to the virus, how they stocked up, how they responded to being at home more, and of course stimulus actions. In International, excluding divestitures, we expect to see higher level of sales growth versus the U.S with strength in India, Mexico, and China. And at Sam's we expect low single-digit comps, excluding fuel and tobacco. Total company sales are expected to decline, due primarily to the divestiture or anticipated divestitures of businesses in the U.K., Japan, and Argentina. Excluding that, we would expect total company sales to grow in the low single digits. From a profitability standpoint, given the assumptions mentioned earlier, excluding the impact of divestitures, we would expect operating income and EPS to be flat to up slightly versus a very strong profit year in FY '21. In regards to the U.K transaction, when we announced it, we said we expected EPS dilution of approximately $0.25 in the first full year assuming we held proceeds in cash. We expect to hold more cash than normal during this time due to strong cash flow, but plan to reallocate that cash in a thoughtful way in the coming quarters into new projects as well as share repurchase. We still expect to make up for the EPS hit in the mid-term, but there will be timing impacts that negatively affect FY 2022 EPS by about $0.20. However, this should provide a tailwind to EPS growth in future years as we reallocate more of that cash. Due in large part to the International transactions, we expect operating income dollars and EPS to decline slightly in FY '22 on a consolidated basis, but we expect Walmart U.S. operating income to increase in spite of some continued COVID costs, accelerated technology costs and increased wages. Alternative revenue streams like advertising and Walmart Fulfillment Services are gaining traction and are expected to become a larger portion of profit growth in the future including FY '22 along with a fairly steady gross margin rate. Due to the International transactions and FY '21 COVID-related expense and profit timing, we expect the FY '22 quarterly profit growth cadence versus last year to be quite variable. We expect Q1 operating income to be relatively flat to last year and EPS to be flat to slightly up, reflecting the presence of Asda in our financials for about half the quarter and some tax rate fluctuations. Due to the timing of FY '21 cost and divestitures, Q2 and Q3 operating income and EPS may be down mid to even high single digits, with Q4 operating income and EPS potentially up mid to high single digits. Again, and I probably can't stress this enough, we are in a very unusual time, causing projections even in the short-term to be very challenging and open to significant fluctuation. Many times I get asked by analysts, investors and others, are we missing anything about Walmart. And I've thought a lot about this question lately. And even for someone like me that's been here for over 20 years, I have to step back and see the evolution through a different lens. Walmart's different than it was last year, three years ago, and certainly five years ago; it's faster, it's more creative and it's less risk averse. It's actively creating its future by building on a set of unique strengths and capabilities. Let me describe the Walmart I want you to see. We have more customer store traffic than anyone in the world. We have one of, if not the largest pickup businesses in the world. And we are scaling delivery. We are one of the largest eCommerce companies in the world, approaching $100 billion in revenue in the next couple of years, and we believe $200 billion a few years after that. We have one of the largest marketplace businesses in the world, and now we are scaling a marketplace fulfillment services business to grow even faster. We are the majority owner of one of the most successful retailers in the world, Walmex, with over $50 billion market cap with great growth opportunities. In India, we are majority owner of one of the largest eCommerce and payment businesses in one of the largest and fastest growing economies in the world. We have a $75 billion club business globally, one of the fastest growing segments in the retail industry. And it's a winner in three key markets; in the U.S., Mexico, and China. We have a rapidly growing advertising platform, which should be a multibillion dollar business in the very near future. We are a global leader in supply chain innovation with exciting initiatives on the table. We are a global leader in sustainability with a clear aspirational goal to become regenerative. We have both growth and scale. We reduced our exposures in Brazil, Argentina, the U.K., Japan, and we will still have a top line that's over $0.5 trillion. That's the Walmart I want to make sure you see. This is the time for us to accelerate and we are ready. And as always, I thank you for your interest in Walmart. And I will turn it over to Doug.

Thank you for joining our Q&A session this morning. As a reminder, if you have a question, please click Raise Hand. You can find this under the Reactions or Participants button. When the host calls upon you, click the Unmute button that will appear on your screen and then you may ask your question. We will take a moment. Our first question will come from Peter Benedict at R.W. Baird. And after that, we will go to Paul Trussell. Peter?

Okay. Dan, thanks. Can you hear me? Yes, we got you. Thank you. I have a two-part question. First, regarding the increased capital spending, could you elaborate on that a bit more? What specific components are involved, and which areas of the business are receiving varying amounts? Secondly, looking ahead after this year, you mentioned that 2.5% to 3% of sales will be allocated to certain areas. Are there particular regions that will receive more funding than others? Additionally, on the topic of U.S. wage investment, when do you anticipate that all your U.S. associate staff will be earning at least $15 an hour? Is there a timeframe we should consider for that? Thank you.

Thanks, Peter. I'll start. Regarding capital, as I mentioned earlier, we aim to focus on the strategic areas we've discussed for several years, and this morning highlights that commitment. In particular, we are concentrating on supply chain and eCommerce. If you look back several years, we were investing 50% or more of our capital into new stores. Now, the focus is shifting toward ensuring we have the capacity needed to meet customer demands and deliver products more quickly. These are the priorities we will be emphasizing. In terms of innovation, there are numerous developments in the supply chain space, and we are at the forefront of finding better ways to deliver pallets to stores and simplify picking in backrooms. These are the areas where we will continue to focus over the next few years, not just in the U.S., but globally.

Yes. Good morning, Peter. I will just add that I'm really excited that we're now to the point where we can invest in some of this automation. I know you've been following us closely. We've been working on this for a while. And now we've got these various forms, distribution center technology, fulfillment center technology, store level market fulfillment center technology that we can start to really scale. And that will take a few years to roll that out, but we like the customer experience benefits, we like the productivity improvements that we're going to see. And this year just really fast-forwarded things in terms of customer behavior. We think the vast majority of that behavior is going to last. And it's terrific that the automation we've been working on is now ready. Maybe if anything I wish it'd been ready a year ago, but at least we're there now and we can get going on it. So, I'm really excited about that. As it relates to associate wages, the approach that we have been trying to take for years now is to make sure that we are creating this ladder of opportunity, providing an opportunity for people when they start with the company to build a career, like so many of us have. And so, the investments that we're making right now are aimed at this new structure that we put in place. It's even more of a team approach to getting the work done across the store that needs to get done. Obviously, picking in the store has become really important. Managing inventory is obviously really important. And this new structure is going to help us do those things more effectively. And those people that we are raising wages for tend to have been with us for a longer period of time than someone that might be earning the entry wage. And so, we're trying to move that average up, create that ladder, and continue to have associates that come through our system and become store managers. We've got about 75% of our store management that starts as hourlies. The alternative would be to invest all of that to try and get to $15 faster, but if we do that, then we wouldn't be able to create this succession that we're committed to creating. We will raise our starting wage rate over time, and I think our history proves that. I mean, we've gone since 2015 from $9 to $10 to $11, we are up over 50% in our starting wage rate. And we will be sensitive to geographies, on their parts of the country where the starting wage should be lower than others and we're obviously really well aware of what's happening nationally with this discussion around $15. And I think that that’s an important target, but I also think that that should be paced in a way that's good for the U.S economy. And you can kind of see us as a model working through how that works. But, I'm really excited to raise the wages today for so many people.

Great. Thank you, Peter. We will go to Paul Trussell with Deutsche Bank next, and then Karen Short after that.

Good morning. Thank you for the color and especially for the willingness to provide guidance in a volatile and dynamic backdrop, and guidance is really where my questions lie. Brett, to the extent you can dig deeper, can you just help us a little bit more on some of the many moving parts in looking at your fiscal '22, just how best we should think about the impact of the U.K., Argentina, Japan, wage investment, COVID costs, just as best as you know today? And then, Doug, as you kind of still expect the top line in the U.S to remain positive despite the tough compares, just discuss what’s driving that confidence and what the digital contribution to that growth looks like?

Yes, Paul, it's nice to see you. You almost answered your question with how you framed it. As we've been discussing, we want to provide guidance for this year because we want to give you the clearest idea we have at the moment, considering everything we know. However, we understand less than usual about the vaccine's impact, economic conditions, and other ongoing matters. We've made an effort to slightly adjust our guidance to provide you with a clearer overview. Getting into the specific details would be quite challenging. Looking at the top line guidance, we have provided the most accurate estimates without accounting for divestitures, aiming for a direct comparison. We anticipate low single-digit growth for the company and Walmart U.S. is likely to achieve that. There are stimulus plans and other factors to consider. Even with that, Walmart U.S. would experience significant growth. The same applies to EPS and operating income; we're presenting our figures as if Asda in Japan were still part of the business, even though they are not, which will affect both top and bottom lines. I know you understand the challenges we all face with COVID, and we aimed to give you the best guidance possible under the circumstances.

As it relates to U.S growth, Paul, obviously there's a lot of variance week-to-week, month-to-month, quarter-to-quarter, and I'm sure every retailer, and we certainly did, kept a really good diary about what was happening every day as we went through that year. And just looking back on all the things that happened even in February and March a year ago is a long list of activities, things that occurred in the environment and decisions that we made. Many of those decisions restricted sales in our stores. We changed hours. We metered how many people could be in the store. And obviously, we were hit hard from an in-stock point of view. Normally, it's a great thing to have inventory turns and we were managing our supply chain well, but we didn't have these huge stockpiles sitting to the side for the surges that we saw on things like consumables. So, I would never seen anything like what happened in our stores as we went through the year. And it was a real challenge for our associates, our store managers, our assistant managers, our associates deserve so much credit for being able to adapt. Some of them were on leave. We had people join the company. We hired over 0.5 million people during the course of last year to help fill in for those on leave and to react to the additional demand that we had for pick and delivery. So, imagine being a store manager dealing with a lot of associates without much experience. So, we've got all these things underneath the surface; in-stock, store hours, associates that were less experienced. All of those factors cause us to think. If things continue to improve, the vaccine roll-out continues, people start to come back out, people will come back to Walmart that may have been shopping locally because they were trying to manage the COVID situation carefully. We've talked about our market shares as we've gone through the year. We think we've got an opportunity in food and consumables to grow market share this next year. So, those are the kinds of things that cause us to feel like it's appropriate to forecast that increase in sales and then go earn it. There will be a lot of volatility quarter-by-quarter and we will just do the best job we can, Paul, of explaining what we're seeing as we go through it.

Thank you, Paul. Next, we will go to Karen Short with Barclays, and then to Simeon Gutman after that.

Hi, thanks. Can you hear me? Hi, Karen. Hey, thanks for all the helpful information. I wanted to clarify something about the EPS. We used $5.28 as the base for flat to slightly up guidance, right? The bigger question I have is regarding the U.S. operating profit. When I do some rough calculations on the wage increase for employees, I estimate it could have about a 14% impact on operating profit in the U.S. However, you’ve guided for slightly increased operating profit there. Could you explain that a bit more? It seems like overcoming a 14% hit would be quite challenging while still expecting growth in the U.S.

Sure. I will walk you through that. So, on the EPS, you're correct, the $0.20 that we talked about is related to Asda. There will still be a little bit of impact from Japan because that is accretive as well, assuming we get that transaction closed in the next few weeks. But the way you did your math would be accurate. On the U.S., there's a lot changing in the P&L and one of the things over the last several years is we've had gross margin that has decreased fairly significantly as we've invested in price and done other things. Now, as we have price gaps in a pretty good position certainly versus where they were years ago; the way that we're able to move product, we're getting efficiencies there, the new income streams that you see us having; the general merchandise business, which is improved, that's helps mix; eCommerce contribution margin, that continues to prove, all of that helps gross margin. So in the past where you're starting with gross margin going down fairly significantly at times, that's really not the case probably as we look forward. So on the expense side, do you have increased wages, but you also had significant COVID costs this year and other things that hit the expense line. But when you balance all of that out and again, Karen, we are giving you the best view that we can, we do think that Walmart U.S. can continue to grow operating income, but there's just a lot of things inside of that.

It's helpful to have the eCommerce improvements that we saw. Brett mentioned the contribution profit improvement. That's driven through apparel and home mix and other things, including the fact that we finally put our merchant teams together. And John and Marc worked really well with the merchants, Scott McCall and others, to help people come on board and take on that additional responsibility in a way that's been helpful. And then, the volume growth leverages fixed costs in a different way. So as you've heard over and over again, a lot of things just got fast-forwarded and changed and changed the shape of what we're looking at.

And the additional revenue streams that we've been talking about, we will talk about even more this morning, advertising, financial services, marketplace, those things that really weren't large businesses at all, they're growing and they're scaling and they're becoming a bigger part of the Walmart U.S. P&L. So that's a positive. Thank you.

Thank you, Karen. Next, we will go to Simeon Gutman with Morgan Stanley and then we will go to Bob Drbul with Guggenheim.

Hey, good morning. Thanks for taking my question. I'll first have maybe a two parter for Doug and then a one part for you, Brett. Doug, you mentioned balancing and managing all the interests of stakeholders, and you guys have done a good job of that over the last few years. So, this is the, why not invest more upfront in this year, how much of a debate is that? And then, can you tell us how much of this investment plan is new or is it pulling forward what would have been a 5 or 10-year plan? And then, to you, Brett, thinking about fiscal '23 and beyond, I realize you gave a construct, is the leverage point of the business or again, of the retail business increasing such that you can't get higher incremental margins over time? And for some of those things you just mentioned, plus advertising, it seems like the incremental margins should get better, especially as you invest in supply chain and get more efficient. But you said, roughly, in line EBIT growth to sales, I'm sure it's far out and so you're being careful, but why shouldn't we expect higher incrementals over time?

You may start. Do you want to …? Doug McMillon: I will go first. When you think about why not more, the two pieces that go through my mind are the automation investments and then the wage investment. On the automation side, I think we're going as quickly and as aggressively as we can and should go. These things will take some time. If we find that it's working really well and we can go faster, I'm going to be in the camp of wanting to go faster, because this looks like it's going to be really great for our supply chain, great for customers, great for the company from a financial point of view. On the wage side, we've been on a path, we've got a strategy, we've got a plan, and we are executing that plan. And you'll just see us continue to make investments at the right time we think in the right levels while also investing in automation to help with productivity. We are trying to play a harmony here and balance these things together. And one things I'm excited about, by the way, is that as we've been changing, we've been able to add a lot of jobs, which I think is great. It's great for the economy. It's great for people to have employment. And automation historically tends to change work and create new opportunities. And I think that's what we're seeing. I mean, a number of people that we've hired to pick orders in stores and a number of people that we will need to run the automation investments that we are making, there's going to be opportunity for folks. And we are trying to craft this whole approach with not only hourly wages, but what we do with benefits and incentives, what we do with health care, what we do with 401(k) match and all of those things to retain people in a way that you get the highest level of productivity, because people are brought in on what the company is doing. So we think we are doing this strategically at the right pace, as it relates to the wage investments. So I think the one place where we could go faster if it all works is automation, and it is a pull forward. We were planning on doing these things. I think two things happened. One is the pandemic changed behavior faster than we would have had in our model. And then, secondly, it just so happens that two or three of these kind of came together in a way that they're ready to be scaled at the same time, and that's great. Yes, Simeon, your understanding of the profit algorithm is accurate. I mentioned earlier that this company looks quite different than it did five years ago, and it will also look different five years from now. I believe that operating income should increase at a faster rate than sales. As an executive team, we consider this when evaluating our investments. If you examine our capacity to generate revenue and profit through various channels, especially with a growing general merchandise business and changing eCommerce contribution margins, it supports the idea that operating income can outpace sales growth in the mid to long term, which is our expectation as a company.

Absolutely. We want that to happen. We think that will happen. We've got a path to make that happen. And it's cool that it's happening in a different way that's sustainable and more digital in nature. I mean, we've become more of a digital company, and that's important in the way that customers live and work and behave these days and the way you can stitch things together. I remember growing up watching other retailers, Sears comes to mind, that diversified, and learning in business school, that there were mistakes made. And looking at what's happening today and what we are trying to do, the thing that's different is technology, the internet is different, digital is different, the way you can stitch these things together is different. And when I look at the flywheel that we showed you a few minutes ago, I get really excited about the arrows that connect the dots. If we can design these things in a way that we become more of a default for certain aspects of their life because of the way we've intuitively designed things, that’s where the magic can really happen. And that is possible today because of digital and technology when it wasn't years ago. It doesn't feel like we're getting too far away from core.

Yes, that's what's so exciting about it.

Thank you, Simeon. Next, we will go to Bob Drbul with Guggenheim, and then to Steph Wissink with Jefferies following that.

Good morning, guys. I just had a couple of questions. I think the first one, on the flywheel, Doug, you talked about the flywheel a little bit, can you just talk about how you think it will evolve with the new businesses that you're adding beyond what you showed today? Can we start with that one?

Well, Bob, if we were ready to talk about that, we would have gone ahead and told you that that's what we were planning. But it's obvious that is as you put the customer in the middle, you put families in the middle, and you think about the opportunity you have, if you're the one selling them the items they buy all the time and serving up the items that they might love to discover, it just creates all kinds of opportunity. I think financial services as a suite is one example. Health care leads you in a lot of different places. The idea that we could help people with health care in a way that makes health care in the country more preventative, certainly high quality, affordable, accessible is something that I think not only opens us up to all of the industries that make up health care, but also helps with the overall relationship in the way that people think about Walmart, and that could lead us into a lot of different directions. The other one that comes to mind that was on our list but we didn't talk a lot about it is data monetization. Data is obviously really valuable and we've got a history of giving our data away to suppliers and doing that so that we could get in-stock and that's obviously really important and some portions of our data will continue to be free because we need their help serving our mutual customers. But there are other aspects of our data that are really valuable and can be put to work in ways that we haven't before. And the concept of building products, digital products that we can use internally and also monetize outside is a really exciting prospect. And some of those things will be purely digital, some will be a combination of people plus digital. Think of last mile, for example, this advantage that we have with supercenters so close to people can be monetized in ways that we haven't before, because the speed it provides and the relationship that it provides. So, I think in future years just as we did today, we will show you this evolving business model and show you new things. And in some cases we may tell you, this one didn't work, we are taking it off, we're adding this one on, and I think that's how it should be frankly.

Yes, sorry. Yes, just were in the mute. Two questions for Brett, really. I think the first one is, can you talk about your price investment flexibility? There's been a lot of discussion from the CPG companies about taking price and their ability to take price. So how do you guys fit into that and how are you thinking about it? The second question I think also for Brett. With the cost of debt being where it is, can you talk a little bit about your willingness to perhaps maybe take on some debt for additional share buyback, or any thoughts around that would be helpful? Thanks. That will be it. Yes, on price I said our price gap's early as good as they've been, in some cases higher than they've been. We are going to continue to be the price leader in markets; it's really important to what we do. It's important to our customers and it's part of who we are as a company. But we're going to be thoughtful about it. We're going to be strategic about it. We want you to come in, and as a customer, as you get a basket from Walmart we want that to be the best deal you can get as a customer. That's who we are in EDLP.

Thank you, Bob. Next we will go to Steph Wissink at Jefferies and then Michael Lasser after that.

Good morning everyone. We also have two questions if we could. Doug, the first is for you. I was really struck by the language you were using around shifting from an option for your consumers to being their preferred choice, or their preferred destination, primary destination. So can you talk a little bit more about how you energize your teams to really think about Walmart as the primary destination, and maybe give us a little hint on Walmart+, where you are in some of the learnings around that? And then, Brett, a question for you, and maybe this goes back to an earlier question on the incremental margins. But if I'm hearing you correctly, your past fiscal '22 expanding margin leverage from an expense perspective, expanding margins on the gross side from a mix and some of the alternative streams of value perspective, how should we translate that into the flow through to operating margin? Something better than that 30 basis points, 40 basis points a year? Thank you.

Yes. I will go first on primary destination. The Supercenter does a great job of doing that. And I always think of what it was like when I was a teenager and my mom was headed out the door and she would say, I'm going to Walmart, what do you need? I didn't really think about it then, but looking back on it now, the fact that she didn't say I'm going shopping, or I'm going to a grocery store what you need, she said I'm going to Walmart. And she bought everything that we could possibly buy at Walmart, and so many Americans and people around the world do that today and that's obviously really important. But we didn't get that done in eCommerce in early stages. We weren't the first place you go when it's time to buy products online. We are trying to change that obviously. You've got to earn that; you've got to have the assortment, you got to have the price, you got to provide service, you got to deliver when you're supposed to deliver. All of those things have to be done. And it takes some time to build those kinds of capabilities. But as we are building that, the opportunity we have is in the way that we put them together. And if the combination of the Supercenter stores, neighborhood markets, in some cases Sam's Club and the Internet can cause Walmart in the omni-channel future to continue to be a primary destination, that's obviously the number one thing that we want to get done and that's a priority for us. Once you have that, and that doesn't mean it's just food and consumables, people are buying a lot of hard lines or buying general merchandise. Our general merchandise share went up this past year, driven largely by what was happening in stores. eCommerce obviously grew at a higher rate, but the store volume was amazing. If we can get that done, it opens up all these other opportunities with the flywheel as we were discussing earlier. Walmart+ is a component of that plan. But the number one aspect of the three dimensions we've got today for Walmart+ is the delivery of items from our supercenters. eCommerce deliveries are important, but the supercenter perishable assortment is obviously really important. And we've got a limit on how much we can pick and deliver from stores. The automation that we're investing in will help change that. And the other capacity choices that we're making will help unlock that, which will enable Walmart+ to grow more. We don't want to get ahead of ourselves and go sell too many Walmart+ memberships and have a customer experience that is less than our expectation, or their expectation. So Net Promoter Score is a key metric for example that we keep our eye on. So Walmart+ will grow, and there may be some things that we add to it over time that are more digital in nature that enable even more membership growth. But when I think about Walmart+, the thing that I'm focused on most is the Net Promoter Score of a Walmart+ member, not the number of memberships that we're selling. The number of memberships will work out, but let's focus on quality as we start to scale it. Walmart+ then unlocks data that we can use to serve up items for customers more effectively, which helps us with margin mix. So, that's important and something that over time will matter to the company. We are not great at that today. It's a skill we are learning. I mean, I think in the future it will be even more important to the company.

We absolutely are. The most visible benefit was how we handled the volume surge when the pandemic started. Now our every day volume level started to rise and it rose to levels even higher than our prior holiday peaks and well above anything that we had seen when we started running holiday shopping events. Now, migrating to the cloud allowed us to keep the site available for our customers, while operating lot more efficiently because we could scale up and we could scale down in a very seamless manner. Now, second, supply chain scaled very well during the holiday. We lit up over 2,500 stores to start delivering online orders, in effect, turning our stores into fulfillment mode.

Thank you, Chuck. Next we will go to Chris Horvers with J.P. Morgan. And then the Paul Lejuez at Citi.

Thanks. Good morning. I think there are two things I would say. First, can you provide some color on the trends you're seeing in your grocery business, maybe as it relates to the vaccination rollout in 2021? And how it's potentially shaping your strategies for eCommerce as well? And then Doug, with margin pressures expected in the near term look forward, do you believe the diversified revenue streams you've discussed today such as financial services and advertising can offset some of those pressures and how important is it to convince investors in that logic? Thanks.

Yes. I'll kick off on grocery. And then, Brett, you might add a little piece to it. So, particularly as we're entering into the spring, and vaccine rollout is undoubtedly helping in a lot of markets, we should expect to see shifts in demand patterns across grocery products. The dynamic where families bought more items to stock up during COVID, not just on groceries, we see them likely returning to a slightly different set of behaviors as they do so. For example, more families are likely to come into stores now that safety allows that to happen. And we will gear up for that. But as I mentioned earlier in response to questions about margin expectations, the way we respond to that is through investment back into the business and focusing on keeping them both in stock. And then, as we mentioned before, managing that in stock position is a number one priority as it helps us in our grocery business.

The diversified income streams are part of that growth as well, and we've shared that with you before. If we do our jobs right in opening up those businesses and being more creative in how we're marketing those to customers and working with suppliers, that can help offset margin pressures for a number of reasons. For example, we bring our advertising faces from a lower base, so we can grow that segment of our profits faster than other segments. And there is upside in that from a gross margin standpoint as we discussed earlier.

Thank you, Chris. Next we will go to Paul Lejuez at Citi.