Chat with us, powered by LiveChat The companies that you need to review for this assignment are: 1) Kroger 2) Walmart You can find the - Study Help
  

The companies that you need to review for this assignment are:
1) Kroger
2) Walmart
You can find the 10K reports that you need for the companies attached below – 10K Reports. The company sites for the proxies and 10Q reports are listed below:
1. Kroger: http://ir.kroger.com/sec-filings
2. Walmart:  https://stock.walmart.com/investors/financial-information/sec-filings/
Below are the requirements for the assignment. You need to answer the following questions for each company separately:
1) Review the 10-K reports of the companies that you have been assigned. In the first few pages, there is usually a table of contents.  What kind of information is included in the 10-K reports of your companies? 
2) Based on item 1of your 10-K reports provide a brief overview of the business of your companies. 
3) For each company, go to the financial statements section of the 10-K reports (item 8). What type of statements do we have in this case (i.e. internally prepared, compilation, review or audit)? If it is an audit, what type of opinion do we have? The audit opinion can be found either in the beginning or at the end of the financial section.
4) Look at the actual financial statements of each company.  What is the first statement?  What is its purpose?  How many years of data are presented there? What period does it cover?
5) What is the second statement?  What is its purpose?  How many years of data are presented there? What are the dates?

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549
 

FORM 10-K
 
(Mark One)
 

☒☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 

For the fiscal year ended February 3, 2018.
 

OR
 

☐☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 

For the transition period from                    to                   
 

Commission file number 1-303
 

THE KROGER CO.
(Exact name of registrant as specified in its charter)

 

Ohio      31-0345740
(State or Other Jurisdiction of Incorporation or Organization)   (I.R.S. Employer Identification No.)

     

1014 Vine Street, Cincinnati, OH   45202
(Address of Principal Executive Offices)   (Zip Code)

 

Registrant’s telephone number, including area code (513) 762-4000
 

Securities registered pursuant to Section 12(b) of the Act:
 

     

Title of each class      Name of each exchange on which registered
     

Common Stock $1 par value   New York Stock Exchange
 

Securities registered pursuant to Section 12(g) of the Act:
 

NONE

(Title of class)
 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
     Yes  ☒  No  ☐
 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
     Yes  ☐  No  ☒
 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
     Yes  ☒  No  ☐
 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and
posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit
and post such files).
     Yes  ☒  No  ☐
 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§299.405 of this chapter) is not contained herein, and will not be contained, to
the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-
K. ☒
 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth
company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 

       Large accelerated filer     ☒   Accelerated filer     ☐
Non-accelerated filer     ☐ (Do not check if a smaller reporting company)   Smaller reporting company     ☐
    Emerging growth company     ☐
 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
 

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).
     Yes  ☐  No  ☒
 

The aggregate market value of the Common Stock of The Kroger Co. held by non-affiliates as of August 12, 2017:  $21.1 billion.  There were 865,976,354 shares of Common
Stock ($1 par value) outstanding as of March 29, 2018.
 

Documents Incorporated by Reference:
 

Portions of Kroger’s definitive proxy statement for its 2018 annual meeting of shareholders, which shall be filed with the Securities and Exchange Commission within 120 days
after the end of the fiscal year to which this Report relates, are incorporated by reference into Part III of this Report.

 
 

 

 

PART I
 

FORWARD LOOKING STATEMENTS.
 

This Annual Report on Form 10-K contains forward-looking statements about our future performance.  These statements are
based on our assumptions and beliefs in light of the information currently available to us.  These statements are subject to a
number of known and unknown risks, uncertainties and other important factors, including the risks and other factors discussed in
“Risk Factors” and “Outlook” below, that could cause actual results and outcomes to differ materially from any future results or
outcomes expressed or implied by such forward looking statements.  Such statements are indicated by words such as
“comfortable,” “committed,” “will,” “expect,” “goal,” “should,” “intend,” “target,” “believe,” “anticipate,” “plan,” and similar
words or phrases.  Moreover, statements in the sections entitled Risk Factors, Management’s Discussion and Analysis of
Financial Condition and Results of Operations (“MD&A”) and Outlook, and elsewhere in this report regarding our expectations,
projections, beliefs, intentions or strategies are forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended.
 
ITEM 1. BUSINESS.
 

The Kroger Co. (the “Company” or “Kroger”) was founded in 1883 and incorporated in 1902.  As of February 3, 2018, we
are one of the largest retailers in the world based on annual sales.  We also manufacture and process some of the food for sale in
our supermarkets.  We maintain a web site (www.thekrogerco.com) that includes additional information about the Company.  We
make available through our web site, free of charge, our annual reports on Form 10-K, our quarterly reports on Form 10-Q, our
current reports on Form 8-K and our interactive data files, including amendments.  These forms are available as soon as
reasonably practicable after we have filed them with, or furnished them electronically to, the SEC.
 

Our revenues are predominately earned and cash is generated as consumer products are sold to customers in our stores, fuel
centers and via our online platforms. We earn income predominantly by selling products at price levels that produce revenues in
excess of the costs to make these products available to our customers.  Such costs include procurement and distribution costs,
facility occupancy and operational costs and overhead expenses.  Our fiscal year ends on the Saturday closest to January 31.  All
references to 2017, 2016 and 2015 are to the fiscal years ended February 3, 2018, January 28, 2017 and January 30, 2016,
respectively, unless specifically indicated otherwise.
 
EMPLOYEES
 

As of February 3, 2018, Kroger employed approximately 449,000 full- and part-time employees. A majority of our
employees are covered by collective bargaining agreements negotiated with local unions affiliated with one of several different
international unions. There are approximately 360 such agreements, usually with terms of three to five years.
 
STORES
 

As of February 3, 2018, Kroger operated, either directly or through its subsidiaries, 2,782 supermarkets under a variety of
local banner names, of which 2,268 had pharmacies and 1,489 had fuel centers.  We offer ClickList™ and Harris Teeter
ExpressLane— personalized, order online, pick up at the store services — at 1,056 of our supermarkets and continue to increase
our home delivery service available to customers.  Approximately 45% of our supermarkets were operated in Company-owned
facilities, including some Company-owned buildings on leased land.  Our current strategy emphasizes self-development and
ownership of store real estate.  Our stores operate under a variety of banners that have strong local ties and brand
recognition.  Supermarkets are generally operated under one of the following formats: combination food and drug stores (“combo
stores”); multi-department stores; marketplace stores; or price impact warehouses.
 

The combo store is the primary food store format.  They typically draw customers from a 2 — 2.5 mile radius.  We believe
this format is successful because the stores are large enough to offer the specialty departments that customers desire for one-stop
shopping, including natural food and organic sections, pharmacies, general merchandise, pet centers and high-quality perishables
such as fresh seafood and organic produce.

2

 

Multi-department stores are significantly larger in size than combo stores.  In addition to the departments offered at a typical
combo store, multi-department stores sell a wide selection of general merchandise items such as apparel, home fashion and
furnishings, outdoor living, electronics, automotive products, toys and fine jewelry.

 
Marketplace stores are smaller in size than multi-department stores.  They offer full-service grocery, pharmacy and health

and beauty care departments as well as an expanded perishable offering and general merchandise area that includes apparel, home
goods and toys.
 

Price impact warehouse stores offer a “no-frills, low cost” warehouse format and feature everyday low prices plus
promotions for a wide selection of grocery and health and beauty care items. Quality meat, dairy, baked goods and fresh produce
items provide a competitive advantage. The average size of a price impact warehouse store is similar to that of  a combo store.
 

In addition to the supermarkets, as of February 3, 2018, we operated, through subsidiaries, 782 convenience stores, 274 fine
jewelry stores and an online retailer.  All 71 of our fine jewelry stores located in malls are operated in leased locations.  In
addition, 66 convenience stores were operated by franchisees through franchise agreements. Approximately 55% of the
convenience stores operated by subsidiaries were operated in Company-owned facilities. The convenience stores offer a limited
assortment of staple food items and general merchandise and, in most cases, sell fuel.
 
SEGMENTS
 

We operate supermarkets, multi-department stores, jewelry stores, and convenience stores throughout the United States.  Our
retail operations, which represent over 97% of our consolidated sales, is our only reportable segment.  We aggregate our operating
divisions into one reportable segment due to the operating divisions having similar economic characteristics with similar long-
term financial performance.  In addition, our operating divisions offer customers similar products,  have similar distribution
methods, operate in similar regulatory environments, purchase the majority of the merchandise for retail sale from similar (and in
many cases identical) vendors on a coordinated basis from a centralized location, serve similar types of customers, and are
allocated capital from a centralized location.  Our operating divisions are organized primarily on a geographical basis so that the
operating division management team can be responsive to local needs of the operating division and can execute company strategic
plans and initiatives throughout the locations in their operating division. This geographical separation is the primary
differentiation between these retail operating divisions.  The geographical basis of organization reflects how the business is
managed and how our Chief Executive Officer, who acts as our chief operating decision maker, assesses performance
internally.  All of our operations are domestic.  Revenues, profits and losses and total assets are shown in our Consolidated
Financial Statements set forth in Item 8 below.
 
MERCHANDISING AND MANUFACTURING
 

Our
Brands
products play an important role in our merchandising strategy.  Our supermarkets, on average, stock over 15,000
private label items.  Our
Brands
products are primarily produced and sold in three “tiers.”  Private Selection® is the premium
quality brand designed to be a unique item in a category or to meet or beat the “gourmet” or “upscale” brands.  The “banner
brand” (Kroger®, Ralphs®, Fred Meyer®, King Soopers®, etc.), which represents the majority of our private label items, is
designed to satisfy customers with quality products.  Before we will carry a “banner brand” product we must be satisfied that the
product quality meets our customers’ expectations in taste and efficacy, and we guarantee it.  P$$T…®, Check This Out… and
Heritage Farm™ are the three value brands, designed to deliver good quality at a very affordable price.   In addition, we continue
to grow Our
Brands
offerings, including Simple Truth® and Simple Truth Organic®.  Both Simple Truth and Simple Truth
Organic are Free From 101+ artificial preservatives and ingredients that customers have told us they do not want in their food,
and the Simple Truth Organic products are USDA certified organic.
 

Approximately 33% of Our
Brands
units and 44% of the grocery category Our
Brands
units sold in our supermarkets are
produced in our food production plants; the remaining Our
Brands
items are produced to our strict specifications by outside
manufacturers.  We perform a “make or buy” analysis on Our
Brands
products and decisions are based upon a comparison of
market-based transfer prices versus open market purchases.  As of February 3, 2018, we operated 37 food production plants.
These plants consisted of 17 dairies, ten deli or bakery plants, five grocery product plants, two beverage plants, one meat plant
and two cheese plants.

3

 

SEASONALITY
 

The majority of our revenues are generally not seasonal in nature.  However, revenues tend to be higher during the major
holidays throughout the year.  Additionally, significant inclement weather systems, particularly winter storms, tend to affect our
sales trends.
 
EXECUTIVE OFFICERS OF THE REGISTRANT
 

The disclosure regarding executive officers is set forth in Item 10 of Part III of this Form 10-K under the heading “Executive
Officers of the Company,” and is incorporated herein by reference.
 
COMPETITIVE ENVIRONMENT
 

For the disclosure related to our competitive environment, see Item 1A under the heading “Competitive Environment.”
 
ITEM 1A. RISK FACTORS.
 

There are risks and uncertainties that can affect our business.  The significant risk factors are discussed below.  The following
information should be read together with “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” and the “Outlook” section in Item 7 of this Form 10-K, which include forward-looking statements and factors that
could cause us not to realize our goals or meet our expectations.
 
COMPETITIVE ENVIRONMENT
 

The operating environment for the food retailing industry continues to be characterized by intense price competition,
aggressive expansion, increasing fragmentation of retail and online formats, entry of non-traditional competitors and market
consolidation.  In addition, evolving customer preferences and the advancement of online, delivery, ship to home, and mobile
channels in our industry enhance the competitive environment.

 
We believe our Restock
Kroger
plan provides a balanced approach that will enable us to meet the wide-ranging needs and

expectations of our customers.  However, we may be unsuccessful in implementing Restock
Kroger
, which could adversely affect
our relationships with our customers, our market share and business growth, and our operations and results.  The nature and
extent to which our competitors respond to the evolving and competitive industry by developing and implementing their
competitive strategies could adversely affect our profitability.
 
PRODUCT SAFETY
 

Customers count on Kroger to provide them with safe food and drugs and other merchandise.  Concerns regarding the safety
of the products that we sell could cause shoppers to avoid purchasing certain products from us, or to seek alternative sources of
supply even if the basis for the concern is outside of our control.  Any lost confidence on the part of our customers would be
difficult and costly to reestablish.  Any issue regarding the safety of items we sell, regardless of the cause, could have a
substantial and adverse effect on our reputation, financial condition, results of operations, or cash flows.
 
LABOR RELATIONS
 

A majority of our employees are covered by collective bargaining agreements with unions, and our relationship with those
unions, including a prolonged work stoppage affecting a substantial number of locations, could have a material adverse effect on
our results.
 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549
___________________________________________

FORM 10-K
___________________________________________

☒ Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended January 31, 2021, or

☐ Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

Commission file number 001-06991.
___________________________________________

WALMART INC.
(Exact name of registrant as specified in its charter)

___________________________________________

DE 71-0415188
(State or other jurisdiction of
incorporation or organization)

(IRS Employer Identification No.)

702 S.W. 8th Street
72716Bentonville, AR

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (479) 273-4000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, par value $0.10 per share WMT NYSE

1.900% Notes Due 2022 WMT22 NYSE
2.550% Notes Due 2026 WMT26 NYSE

Securities registered pursuant to Section 12(g) of the Act: None
___________________________________________

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ý No ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.
Yes ¨ No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least
the past 90 days.
Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging
growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2
of the Exchange Act.

Large Accelerated Filer ☒ Accelerated Filer ☐☐
Non-Accelerated Filer ☐☐ Smaller Reporting Company ☐☐

Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over
financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit
report. ☒☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒☒

As of July 31, 2020, the aggregate market value of the voting common stock of the registrant held by non-affiliates of the registrant, based on the closing sale price
of those shares on the New York Stock Exchange reported on July 31, 2020, was $182,886,052,366. For the purposes of this disclosure only, the registrant has
assumed that its directors, executive officers (as defined in Rule 3b-7 under the Exchange Act) and the beneficial owners of 5% or more of the registrant’s
outstanding common stock are the affiliates of the registrant.

The registrant had 2,817,071,695 shares of common stock outstanding as of March 17, 2021.

DOCUMENTS INCORPORATED BY REFERENCE

Document Parts Into Which Incorporated
Portions of the registrant’s Proxy Statement for the Annual Meeting of Shareholders
to be held June 2, 2021 (the “Proxy Statement”)

Part III

Walmart Inc.
Form 10-K

For the Fiscal Year Ended January 31, 2021

Table of Contents

Page
Part I
Item 1 Business 6
Item 1A Risk Factors 14
Item 1B Unresolved Staff Comments 25
Item 2 Properties 26
Item 3 Legal Proceedings 28
Item 4 Mine Safety Disclosures 30

Part II
Item 5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 31
Item 6 Selected Financial Data 32
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations 33
Item 7A Quantitative and Qualitative Disclosures About Market Risk 48
Item 8 Financial Statements and Supplementary Data 50
Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 81
Item 9A Controls and Procedures 81
Item 9B Other Information 81

Part III
Item 10 Directors, Executive Officers and Corporate Governance 82
Item 11 Executive Compensation 82
Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 82
Item 13 Certain Relationships and Related Transactions, and Director Independence 82
Item 14 Principal Accounting Fees and Services 82

Part IV
Item 15 Exhibits, Financial Statement Schedules 83
Item 16 Form 10-K Summary 85

Signatures 86

#WMT-20210131_HTM_IAAF0CABF1F7048C9B7E317B3E9C1CFC5_58

WALMART INC.

ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED JANUARY 31, 2021

All references in this Annual Report on Form 10-K, the information incorporated into this Annual Report on Form 10-K by reference to information in the Proxy
Statement of Walmart Inc. for its Annual Shareholders’ Meeting to be held on June 2, 2021 and in the exhibits to this Annual Report on Form 10-K to “Walmart
Inc.,” “Walmart,” “the Company,” “our Company,” “we,” “us” and “our” are to the Delaware corporation named “Walmart Inc.” and, except where expressly noted
otherwise or the context otherwise requires, that corporation’s consolidated subsidiaries.

PART I
Cautionary Statement Regarding Forward-Looking Statements
This Annual Report on Form 10-K and other reports, statements, and information that Walmart Inc. (which individually or together with its subsidiaries, as the
context otherwise requires, is referred to as “we,” “Walmart” or the “Company”) has filed with or furnished to the Securities and Exchange Commission (“SEC”) or
may file with or furnish to the SEC in the future, and prior or future public announcements and presentations that we or our management have made or may make,
include or may include, or incorporate or may incorporate by reference, statements that may be deemed to be “forward-looking statements” within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended (the “Act”), that are intended to enjoy the protection of the safe harbor for forward-looking
statements provided by the Act as well as protections afforded by other federal securities laws.

Nature of Forward-Looking Statements
Such forward-looking statements are not statements of historical facts, but instead express our estimates or expectations for our consolidated, or one of our
segment’s, economic performance or results of operations for future periods or as of future dates or events or developments that may occur in the future or discuss
our plans, objectives or goals. These forward-looking statements may relate to:

• the growth of our business or change in our competitive position in the future or in or over particular periods;
• the amount, number, growth, increase, reduction or decrease in or over certain periods, of or in certain financial items or measures or operating measures,

including our earnings per share, net sales, comparable store and club sales, our Walmart U.S. operating segment’s eCommerce sales, liabilities, expenses
of certain categories, expense leverage, returns, capital and operating investments or expenditures of particular types and new store openings;

• investments and capital expenditures we will make and how certain of those investments and capital expenditures are expected to be financed;
• our increasing investments in eCommerce, technology, supply chain, store remodels and other omni-channel customer initiatives, such as same day

pickup and delivery;
• our workforce strategy;
• volatility in currency exchange rates affecting our or one of our segments’ results of operations;
• the Company continuing to provide returns to shareholders through share repurchases and dividends, the use of share repurchase authorization over a

certain period or the source of funding of a certain portion of our share repurchases;
• our sources of liquidity, including our cash, continuing to be adequate or sufficient to fund our operations, finance our global investment and expansion

activities, pay dividends and fund share repurchases;
• cash flows from operations, our current cash position and access to capital markets will continue to be sufficient to meet our anticipated operating cash

needs;
• the reclassification of amounts related to our derivatives;
• our effective tax rate for certain periods and the realization of certain net deferred tax assets and the effects of resolutions of tax-related matters;
• the effect of adverse decisions in, or settlement of, litigation or other proceedings or investigations to which we are subject;
• the effect on the Company’s results of operations or financial position of the Company’s adoption of certain new, or amendments to existing, accounting

standards; or
• our commitments, intentions, plans or goals related to the sustainability of our environment and supply chains, the promotion of economic opportunity or

other societal initiatives.
Our forward-looking statements may also include statements of our strategies, plans and objectives for our operations, including areas of future focus in our
operations, and the assumptions underlying any of the forward-looking statements we make. The forward-looking statements we make can typically be identified
by the use therein of words and phrases such as “aim,” “anticipate,” “believe,” “could be,” “could increase,” “could occur,” “could result,” “continue,” “estimate,”
“expansion,” “expect,” “expectation,” “expected to be,” “focus,” “forecast,” “goal,” “grow,” “guidance,” “intend,” “invest,” “is expected,”

4

“may continue,” “may fluctuate,” “may grow,” “may impact,” “may result,” “objective,” “plan,” “priority,” “project,” “strategy,” “to be,” “we’ll,” “we will,” “will
add,” “will allow,” “will be,” “will benefit,” “will change,” “will come in at,” “will continue,” “will decrease,” “will grow,” “will have,” “will impact,” “will
include,” “will increase,” “will open,” “will remain,” “will result,” “will stay,” “will strengthen,” “would be,” “would decrease” and “would increase,” variations of
such words or phrases, other phrases commencing with the word “will” or similar words and phrases denoting anticipated or expected occurrences or results.
The forward-looking statements that we make or that are made by others on our behalf are based on our knowledge of our business and our operating environment
and assumptions that we believe to be or will believe to be reasonable when such forward-looking statements were or are made. As a consequence of the factors
described above, the other risks, uncertainties and factors we disclose below and in the other reports as mentioned above, other risks not known to us at this time,
changes in facts, assumptions not being realized or other circumstances, our actual results may differ materially from those discussed in or implied or contemplated
by our forward-looking statements. Consequently, this cautionary statement qualifies all forward-looking statements we make or that are made on our behalf,
including those made herein and incorporated by reference herein. We cannot assure you that the results or developments expected or anticipated by us will be
realized or, even if substantially realized, that those results or developments will result in the expected consequences for us or affect us, our business, our
operations or our operating results in the manner or to the extent we expect. We caution readers not to place undue reliance on such forward-looking statements,
which speak only as of their dates. We undertake no obligation to revise or update any of the forward-looking statements to reflect subsequent events or
circumstances except to the extent required by applicable law.

5

ITEM 1. BUSINESS

General
Walmart Inc. (“Walmart,” the “Company” or “we”) helps people around the world save money and live better – anytime and anywhere – by providing the
opportunity to shop in retail stores and through eCommerce. Through innovation, we strive to continuously improve a customer-centric experience that seamlessly
integrates our eCommerce and retail stores in an omni-channel offering that saves time for our customers. Each week, we serve over 240 million customers who
visit approximately 11,400 stores and numerous eCommerce websites under 54 banners in 26 countries.
Our strategy is to make every day easier for busy families, operate with discipline, sharpen our culture and become digital, and make trust a competitive advantage.
Making life easier for busy families includes our commitment to price leadership, which has been and will remain a cornerstone of our business, as well as
increasing convenience to save our customers time. By leading on price, we earn the trust of our customers every day by providing a broad assortment of quality
merchandise and services at everyday low prices (“EDLP”). EDLP is our pricing philosophy under which we price items at a low price every day so our customers
trust that our prices will not change under frequent promotional activity. Everyday low cost (“EDLC”) is our commitment to control expenses so our cost savings
can be passed along to our customers.
Our operations comprise three reportable segments: Walmart U.S., Walmart International and Sam’s Club. Our fiscal year ends on January 31 for our United States
(“U.S.”) and Canadian operations. We consolidate all other operations generally using a one-month lag and on a calendar year basis. Our discussion is as of and for
the fiscal years ended January 31, 2021 (“fiscal 2021”), January 31, 2020 (“fiscal 2020”) and January 31, 2019 (“fiscal 2019”). During fiscal 2021, we generated
total revenues of $559.2 billion, which was primarily comprised of net sales of $555.2 billion.
We maintain our principal offices in Bentonville, Arkansas. Our common stock trades on the New York Stock Exchange under the symbol “WMT.”

The Development of Our Company

The businesses conducted by our founders began in 1945 when Sam M. Walton opened a franchise Ben Franklin variety store in Newport, Arkansas. In 1946, his
brother, James L. Walton, opened a similar store in Versailles, Missouri. Until 1962, our founders’ business was devoted entirely to the operation of variety stores.
In 1983, we opened our first Sam’s Club, and in 1988, we opened our first supercenter. In 1998, we opened our first Walmart Neighborhood Market. In 1991, we
began our first international initiative when we entered into a joint venture in Mexico and, as of January 31, 2021, our Walmart International segment conducted
business in 25 countries.
In 2000, we began our first eCommerce initiative by creating both walmart.com and samsclub.com. Since then, our eCommerce presence has continued to grow. In
2007, leveraging our physical stores, walmart.com launched its Site to Store service, enabling customers to make a purchase online and pick up merchandise in
stores. To date, we now have approximately 7,300 pickup and 5,200 delivery locations globally. In recent years, we have heavily invested in omni-channel and
eCommerce innovation, as well as made several eCommerce acquisitions to better serve our customers. These investments have enabled us to leverage technology,
talent and expertise, incubate digitally-native brands, and expand our assortment and service offerings in stores and on walmart.com. We have also continued to
enhance our eCommerce initiatives internationally, such as with our acquisition of a majority stake of Flipkart Private Limited (“Flipkart”), which is our ecosystem
in India that includes eCommerce platforms of Flipkart and Myntra as well as PhonePe, a digital transaction platform.
In fiscal 2021, we launched Walmart+ in the U.S., a new membership offering with omni-channel shopping benefits that currently include unlimited free shipping
on eligible items with no order minimum, unlimited delivery from store, fuel discounts, and mobile scan & go for a streamlined in-store shopping experience. We
are enhancing our ecosystem with our omni-channel capabilities, stores, services, eCommerce sites and supply chain combined with our more than 2.3 million
associates as of January 31, 2021 to better serve our customers. Together, we believe these elements produce a flywheel effect which creates customer relationships
where customers view Walmart as their primary destination.
During fiscal 2021, the world has been, and continues to be, impacted by the COVID-19 pandemic. While we have incurred incremental costs associated with
operating during a global health crisis, the COVID-19 pandemic has also accelerated our business growth and eCommerce expansion. We have continued to invest
in our omni-channel offering which resonates with customers around the world who are increasingly seeking convenience.

6

Information About Our Segments
We are engaged in global operations of retail, wholesale and other units, as well as eCommerce, located throughout the U.S., Africa, Canada, Central America,
Chile, China, India and Mexico. The Company also engaged in operations in the U.K. and Japan, both of which were classified as held for sale as of January 31,
2021. We also operated in Argentina and Brazil prior to the sale of Walmart Argentina in November 2020 and the majority stake of Walmart Brazil in fiscal 2019.
Refer to Note 12 to our Consolidated Financial Statements for information on these divestitures. Our operations are conducted in three reportable segments:
Walmart U.S., Walmart International and Sam’s Club, which are further described below. Each segment contributes to the Company’s operating results differently.
However, each has generally maintained a consistent contribution rate to the Company’s net sales and operating income in recent years other than minor changes to
the contribution rate for the Walmart International segment due to fluctuations in currency exchange rates. Additional information on our operating segments and
geographic and product information is contained in Note 13 to our Consolidated Financial Statements.

Walmart U.S. Segment
Walmart U.S. is our largest segment and operates in the U.S., including in all 50 states, Washington D.C. and Puerto Rico. Walmart U.S. is a mass merchandiser of
consumer products, operating under the “Walmart” and “Walmart Neighborhood Market” brands, as well as walmart.com and other eCommerce brands. Walmart
U.S. had net sales of $370.0 billion for fiscal 2021, representing 67% of our fiscal 2021 consolidated net sales, and had net sales of $341.0 billion and $331.7
billion for fiscal 2020 and 2019, respectively. Of our three segments, Walmart U.S. has historically had the highest gross profit as a percentage of net sales (“gross
profit rate”). In addition, Walmart U.S. has historically contributed the greatest amount to the Company’s net sales and operating income.

Omni-channel. Walmart U.S. provides an omni-channel experience to customers, integrating retail stores and eCommerce, through services such as pickup and
delivery, ship-from-store, and digital pharmacy fulfillment options. As of January 31, 2021, we had approximately 3,750 pickup locations and 3,000 delivery
locations. Our Walmart+ membership incorporates several service offerings which provide enhanced omni-channel shopping experiences and benefits for
members. We have several eCommerce websites, the largest of which is walmart.com. We define eCommerce sales as sales initiated by customers digitally and
fulfilled by a number of methods including our dedicated eCommerce fulfillment centers and leveraging our stores. The following table provides the approximate
size of our retail stores as of January 31, 2021:

Minimum Square
Feet

Maximum Square
Feet Average Square Feet

Supercenters (general merchandise and grocery) 69,000 260,000 178,000
Discount stores (general merchandise and limited grocery) 30,000 221,000 106,000
Neighborhood markets (grocery) 28,000 65,000 42,000

(1) Excludes other small formats.

Merchandise. Walmart U.S. does business in three strategic merchandise units, listed below:
• Grocery consists of a full line of grocery items, including dry grocery, snacks, dairy, meat, produce, deli & bakery, frozen foods, alcoholic and

nonalcoholic beverages, as well as consumables such as health and beauty aids, pet supplies, household chemicals, paper goods and baby products;
• General merchandise includes:

◦ Entertainment (e.g., electronics, toys, seasonal merchandise, wireless, video games, movies, music and books);
◦ Hardlines (e.g., automotive, hardware and paint, sporting goods, outdoor living and stationery);
◦ Apparel (e.g., apparel for men, women, girls, boys and infants, as well as shoes, jewelry and accessories); and
◦ Home (e.g., housewares and small appliances, bed & bath, furniture and home organization, home furnishings, home decor, fabrics and crafts).

• Health and wellness includes pharmacy, over-the-counter drugs and other medical products, optical services and clinical services.

Walmart U.S. recently launched Walmart+, a membership offering providing omni-channel shopping benefits such as unlimited free shipping on eligible items
with no order minimums, as well as delivery and other benefits which help customers save more time and money. Walmart U.S. also offers an in-house advertising
offering via Walmart Connect, supply chain and fulfillment capabilities to online marketplace sellers via Walmart Fulfillment Services, as well as quality,
affordable, and accessible healthcare via Walmart Health. Additional service offerings include fuel and financial services and related products, such as money
orders, prepaid cards, money (wire) transfers, check cashing and bill payment. Combined, these offerings did not represent a significant portion of annual segment
revenues.
Brand name merchandise represents a significant portion of the merchandise sold in Walmart U.S. We also market lines of merchandise under our private-label
brands, including brands such as: “Allswell,” “Athletic Works,” “Bonobos,” “Eloquii,”

(1)

7

“Equate,” “Freshness Guaranteed,” “George,” “Great Value,” “Holiday Time,” “Mainstays,” “Marketside,” “No Boundaries,” “Onn,” “Ozark Trail,” “Parent’s
Choice,” “Sam’s Choice,” “Scoop,” “Spring Valley,” “SwissTech,” “Time and Tru” and “Wonder Nation.” The Company also markets lines of merchandise under
licensed brands, some of which include: “Better Homes & Gardens,” “Farberware,” “Pioneer Woman” and “Russell.”

Periodically, revisions are made to the categorization of the components comprising our strategic merchandise units. When revisions are made, the previous
periods’ presentation is adjusted to maintain comparability.

Operations. Historically, many supercenters, discount stores and neighborhood markets were generally open 24 hours each day. In response to the COVID-19
pandemic, we reduced store hours to allow for additional cleaning and sanitizing but expanded store hours slightly toward the end of fiscal 2021. Consistent with
its strategy, Walmart U.S. continues to develop technology tools and services that help better serve customers and help stores operate more efficiently, such as
pickup and delivery, Walmart+, ship-from-store and other initiatives which provide convenient and seamless omni-channel shopping experiences.

Seasonal Aspects of Operations. Walmart U.S.’s business is seasonal to a certain extent due to calendar events and national and religious holidays, as well as
different weather patterns. Historically, its highest sales volume and segment operating income have occurred in the fiscal quarter ending January 31. However, the
COVID-19 pandemic may have an impact on consumer behaviors that could result in temporary changes in the seasonal fluctuations of our business.

Competition. Walmart U.S. competes with omni-channel retailers operating discount, department, retail and wholesale grocers, drug, dollar, variety and specialty
stores, supermarkets, hypermarkets and supercenter-type stores, as well as eCommerce retailers. Our ability to develop and operate units at the right locations and
to deliver a customer-centric omni-channel experience largely determines our competitive position within the retail industry. We employ many programs designed
to meet competitive pressures within our industry. These programs include the following:

• EDLP: our pricing philosophy under which we price items at everyday low prices so our customers trust that our prices will not change under frequent
promotional activity;

• EDLC: everyday low cost is our commitment to control expenses so our cost savings can be passed along to our customers; and
• Omni-channel offerings such as pickup and delivery and our new Walmart+ membership offering, all of which enhance convenience and seek to serve

customers in the ways they want to be served.

Distribution. For fiscal 2021, the majority of Walmart U.S.’s purchases of store merchandise were shipped through our 156 distribution facilities, which are
located strategically throughout the U.S. The remaining store merchandise we purchased was shipped directly from suppliers. General merchandise and dry
grocery merchandise is transported primarily through the segment’s private truck fleet; however, we contract with common carriers to transport the majority of our
perishable grocery merchandise. We ship merchandise purchased by customers on our eCommerce platforms by a number of methods from multiple locations
including from our 32 dedicated eCommerce fulfillment centers, as well as leveraging our ability to ship directly from approximately 3,000 stores.

Walmart International Segment
Walmart International is our second largest segment and operated in 25 countries outside of the U.S as of January 31, 2021. Walmart International operated
through our wholly-owned subsidiaries in Canada, Chile, and China, as well as our businesses classified as held for sale in Japan and the United Kingdom as of
January 31, 2021. Walmart International also operates through our majority-owned subsidiaries in Africa (which includes Botswana, Ghana, Kenya, Lesotho,
Malawi, Mozambique, Namibia, Nigeria, South Africa, Swaziland, Tanzania, Uganda and Zambia), Central America (which includes Costa Rica, El Salvador,
Guatemala, Honduras and Nicaragua), India and Mexico. Walmart International previously operated in Argentina and Brazil prior to the sale of Walmart Argentina
in fiscal 2021 and the majority stake of Walmart Brazil in fiscal 2019. Refer to Note 12 for discussion of recent divestitures.
Walmart International includes numerous formats divided into three major categories: retail, wholesale and other. These categories consist of many formats,
including: supercenters, supermarkets, hypermarkets, warehouse clubs (including Sam’s Clubs) and cash & carry, as well as eCommerce through walmart.com.mx,
walmart.ca, flipkart.com and other sites. Walmart International had net sales of $121.4 billion for fiscal 2021, representing 22% of our fiscal 2021 consolidated net
sales, and had net sales of $120.1 billion and $120.8 billion for fiscal 2020 and 2019, respectively. The segment’s net sales were negatively impacted by currency
exchange rate fluctuations for all years presented. The gross profit rate is lower than that of Walmart U.S. …

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K
(Mark One)

☒☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended January 30, 2021.

OR

☐☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                    to                   

Commission file number 1-303

THE KROGER CO.
(Exact name of registrant as specified in its charter)

Ohio      31-0345740
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)

1014 Vine Street, Cincinnati, OH 45202
(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code (513) 762-4000
Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol Name of each exchange on which registered
Common, $1.00 Par Value KR New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

NONE

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth
company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange
Act.

Large accelerated filer ☒ Accelerated filer ☐
Non-accelerated filer ☐ Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the average bid and asked price of such common
equity, as of the last business day of the registrant’s most recently completed second fiscal quarter (August 15, 2020). $27.6 billion.
The number of shares outstanding of the registrant’s common stock, as of the latest practicable date. 751,993,701 shares of Common Stock of $1 par value, as of March 24,
2021.

Documents Incorporated by Reference:

Portions of Kroger’s definitive proxy statement for its 2020 annual meeting of shareholders, which shall be filed with the Securities and Exchange Commission within 120 days
after the end of the fiscal year to which this Report relates, are incorporated by reference into Part III of this Report.

The Kroger Co.
Form 10-K

For the Fiscal Year Ended January 30, 2021

Table of Contents

Page
Part I 2
Item 1 Business 3
Item 1A Risk Factors 9
Item 1B Unresolved Staff Comments 16
Item 2 Properties 16
Item 3 Legal Proceedings 16
Item 4 Mine Safety Disclosures 16

Part II 17
Item 5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 17
Item 6 Selected Financial Data 20
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations 21
Item 7A Quantitative and Qualitative Disclosures About Market Risk 43
Item 8 Financial Statements and Supplementary Data 44
Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 95
Item 9A Controls and Procedures 95
Item 9B Other Information 95

Part III 96
Item 10 Directors, Executive Officers and Corporate Governance 96
Item 11 Executive Compensation 96
Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 96
Item 13 Certain Relationships and Related Transactions, and Director Independence 97
Item 14 Principal Accounting Fees and Services 97

Part IV 98
Item 15 Exhibits, Financial Statement Schedules 98
Item 16 Form 10-K Summary 100

Signatures 101

2

PART I

FORWARD LOOKING STATEMENTS.

This Annual Report on Form 10-K contains forward-looking statements about our future performance. These statements are
based on our assumptions and beliefs in light of the information currently available to us. These statements are subject to a
number of known and unknown risks, uncertainties and other important factors, including the risks and other factors discussed in
“Risk Factors” below, that could cause actual results and outcomes to differ materially from any future results or outcomes
expressed or implied by such forward looking statements. Such statements are indicated by words such as “achieve,” “affect,”
“believe,” “committed,” “continue,” “could,” “deliver,” “effect,” “estimate,” “expects,” “future,” “growth,” “intends,” “likely,”
“may,” “model,” “plan,” “position,” “range,” “result,” “strategy,” “strong,” “trend,” “will” and “would,” and similar words or
phrases. Moreover, statements in the sections entitled Risk Factors, Management’s Discussion and Analysis of Financial
Condition and Results of Operations (“MD&A”), and elsewhere in this report regarding our expectations, projections, beliefs,
intentions or strategies are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended.

Various uncertainties and other factors could cause actual results to differ materially from those contained in the forward-
looking statements. These include:

● The extent to which our sources of liquidity are sufficient to meet our requirements may be affected by the state of the
financial markets and the effect that such condition has on our ability to issue commercial paper at acceptable rates. Our
ability to borrow under our committed lines of credit, including our bank credit facilities, could be impaired if one or
more of our lenders under those lines is unwilling or unable to honor its contractual obligation to lend to us, or in the
event that global pandemics, including the COVID-19 pandemic, natural disasters or weather conditions interfere with
the ability of our lenders to lend to us. Our ability to refinance maturing debt may be affected by the state of the
financial markets.

● Our ability to achieve sales, earnings, incremental FIFO operating profit, and adjusted free cash flow goals may be
affected by: COVID-19 related factors, risks and challenges, including among others, the length of time that the
pandemic continues, the temporary inability of customers to shop due to illness, quarantine, or other travel restrictions
or financial hardship, shifts in demand away from discretionary or higher priced products to lower priced products, or
stockpiling or similar pantry-filling activities, reduced workforces which may be caused by, but not limited to, the
temporary inability of the workforce to work due to illness, quarantine, or government mandates, temporary store
closures due to reduced workforces or government mandates, or the availability and efficacy of a vaccine; labor
negotiations or disputes; changes in the types and numbers of businesses that compete with Kroger; pricing and
promotional activities of existing and new competitors, including non-traditional competitors, and the aggressiveness of
that competition; Kroger’s response to these actions; the state of the economy, including interest rates, the inflationary
and deflationary trends in certain commodities, changes in tariffs, and the unemployment rate; the effect that fuel costs
have on consumer spending; volatility of fuel margins; changes in government-funded benefit programs and the extent
and effectiveness of any COVID-19 stimulus packages; manufacturing commodity costs; diesel fuel costs related to
Kroger’s logistics operations; trends in consumer spending; the extent to which our customers exercise caution in their
purchasing in response to economic conditions; the uncertainty of economic growth or recession; changes in inflation or
deflation in product and operating costs; stock repurchases; our ability to retain pharmacy sales from third-party payors;
consolidation in the healthcare industry, including pharmacy benefit managers; our ability to negotiate modifications to
multi-employer pension plans; natural disasters or adverse weather conditions; the effect of public health crises or other
significant catastrophic events, including the coronavirus; the potential costs and risks associated with potential cyber-
attacks or data security breaches; the success of our future growth plans; the ability to execute our growth strategy and
value creation model, including continued cost savings, growth of our alternative profit businesses, and widening and
deepening our strategic moats of fresh, Our Brands, personalization, and seamless; and the successful integration of
merged companies and new partnerships.

● Our ability to achieve these goals may also be affected by our ability to manage the factors identified above. Our ability
to execute our financial strategy may be affected by our ability to generate cash flow.

● Our effective tax rate may differ from the expected rate due to changes in laws, the status of pending items with various
taxing authorities, and the deductibility of certain expenses.

3

We cannot fully foresee the effects of changes in economic conditions on our business.

Other factors and assumptions not identified above, including those discussed in Part 1, Item 1A of this Annual Report,
could also cause actual results to differ materially from those set forth in the forward-looking information. Accordingly, actual
events and results may vary significantly from those included in, contemplated or implied by forward-looking statements made
by us or our representatives. We undertake no obligation to update the forward-looking information contained in this filing.

ITEM 1. BUSINESS.

The Kroger Co. (the “Company” or “Kroger”) was founded in 1883 and incorporated in 1902. As of January 30, 2021, we
are one of the largest retailers in the world based on annual sales. We also manufacture and process some of the food for sale in
our supermarkets. We maintain a web site (www.thekrogerco.com) that includes the Kroger Fact Book and other additional
information about the Company. Kroger’s website and any reports or other information made available by Kroger through its
website are not part of or incorporated by reference into this Annual Report on Form 10-K. We make available through our web
site, free of charge, our annual reports on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K and
our interactive data files, including amendments. These forms are available as soon as reasonably practicable after we have filed
them with, or furnished them electronically to, the SEC.

Our revenues are predominately earned and cash is generated as consumer products are sold to customers in our stores, fuel
centers and via our online platforms. We earn income predominantly by selling products at price levels that produce revenues in
excess of the costs to make these products available to our customers. Such costs include procurement and distribution costs,
facility occupancy and operational costs and overhead expenses. Our fiscal year ends on the Saturday closest to January 31. All
references to 2020, 2019 and 2018 are to the fiscal years ended January 30, 2021, February 1, 2020 and February 2, 2019,
respectively, unless specifically indicated otherwise.

STORES

As of January 30, 2021, Kroger operated, either directly or through its subsidiaries, 2,742 supermarkets under a variety of
local banner names, of which 2,255 had pharmacies and 1,596 had fuel centers. We offer Pickup (also referred to as ClickList®)
and Harris Teeter ExpressLane™— personalized, order online, pick up at the store services — at 2,223 of our supermarkets and
provide home delivery service to substantially all of Kroger households. Approximately 51% of our supermarkets were operated
in Company-owned facilities, including some Company-owned buildings on leased land. Our stores operate under a variety of
banners that have strong local ties and brand recognition. Fuel sales are an important part of our revenue, net earnings and loyalty
offering. Our fuel strategy is to include a fuel center at each of our supermarket locations when it is feasible and it is expected to
be profitable. Each fuel center typically includes 5 to 10 islands of fuel dispensers and storage tanks with capacity for 40,000 to
50,000 gallons of fuel. Supermarkets are generally operated under one of the following formats: combination food and drug
stores (“combo stores”); multi-department stores; marketplace stores; or price impact warehouses.

The combo store is the primary food store format. They typically draw customers from a 2-2.5 mile radius. We believe this
format is successful because the stores are large enough to offer the specialty departments that customers desire for one-stop
shopping, including natural food and organic sections, pharmacies, general merchandise, pet centers and high-quality perishables
such as fresh seafood and organic produce.

Multi-department stores are significantly larger in size than combo stores. In addition to the departments offered at a typical
combo store, multi-department stores sell a wide selection of general merchandise items such as apparel, home fashion and
furnishings, outdoor living, electronics, automotive products and toys.

Marketplace stores are smaller in size than multi-department stores. They offer full-service grocery, pharmacy and health
and beauty care departments as well as an expanded perishable offering and general merchandise area that includes apparel, home
goods and toys.

4

Price impact warehouse stores offer a “no-frills, low cost” warehouse format and feature everyday low prices plus
promotions for a wide selection of grocery and health and beauty care items. Quality meat, dairy, baked goods and fresh produce
items provide a competitive advantage. The average size of a price impact warehouse store is similar to that of a combo store.

SEGMENTS

We operate supermarkets and multi-department stores throughout the United States. Our retail operations, which represent
97% of our consolidated sales, is our only reportable segment. We aggregate our operating divisions into one reportable segment
due to the operating divisions having similar economic characteristics with similar long-term financial performance. In addition,
our operating divisions offer customers similar products, have similar distribution methods, operate in similar regulatory
environments, purchase the majority of the merchandise for retail sale from similar (and in many cases identical) vendors on a
coordinated basis from a centralized location, serve similar types of customers, and are allocated capital from a centralized
location. Our operating divisions are organized primarily on a geographical basis so that the operating division management team
can be responsive to local needs of the operating division and can execute company strategic plans and initiatives throughout the
locations in their operating division. This geographical separation is the primary differentiation between these retail operating
divisions. The geographical basis of organization reflects how the business is managed and how our Chief Executive Officer,
who acts as our chief operating decision maker, assesses performance internally. All of our operations are domestic. Revenues,
profits and losses and total assets are shown in our Consolidated Financial Statements set forth in Item 8 below.

MERCHANDISING AND MANUFACTURING

Our Brands products play an important role in our merchandising strategy. Our supermarkets, on average, stock over 15,000
private label items. Our Brands products are primarily produced and sold in three “tiers.” Private Selection® is one of our
premium quality brands, offering customers culinary foods and ingredients that deliver amazing eating experiences. The Kroger®
brand, which represents the majority of our private label items, is designed to consistently satisfy and delight customers with
quality products that exceed or meet the national brand in taste and efficacy, as well as with unique and differentiated products.
Big K®, Check This Out…® and Heritage Farm® are some of our value brands, designed to deliver good quality at a very
affordable price. In addition to our three “tiers,” Our Brands offers customers a variety of natural and organic products with
Simple Truth® and Simple Truth Organic®. Both Simple Truth and Simple Truth Organic are free from a defined list of artificial
ingredients that customers have told us they do not want in their food, and the Simple Truth Organic products are USDA certified
organic.

Approximately 29% of Our Brands units and 40% of the grocery category Our Brands units sold in our supermarkets are
produced in our food production plants; the remaining Our Brands items are produced to our strict specifications by outside
manufacturers. We perform a “make or buy” analysis on Our Brands products and decisions are based upon a comparison of
market-based transfer prices versus open market purchases. As of January 30, 2021, we operated 35 food production plants.
These plants consisted of 16 dairies, 9 deli or bakery plants, five grocery product plants, two beverage plants, one meat plant and
two cheese plants.

SEASONALITY

The majority of our revenues are generally not seasonal in nature. However, revenues tend to be higher during the major
holidays throughout the year. Additionally, certain significant events including inclement weather systems, particularly winter
storms, tend to affect our sales trends.

HUMAN CAPITAL MANAGEMENT

Our People

We want Kroger to be a place our customers love to shop and associates love to work. This is why we create working
environments where associates feel encouraged and supported to be their best selves every day. As of January 30, 2021, Kroger
employed approximately 465,000 full- and part-time employees. With these nearly half a million associates serving more than
nine million customers every day, our people are essential to our success, and we focus intentionally on attracting, developing
and engaging a diverse workforce that represents the communities we serve. We have long been guided by our core values –
Honesty, Integrity, Respect, Safety, Diversity and Inclusion.

5

Attracting & Developing Our Talent

We recognize that our people are our most important asset. To deliver on our customers’ experiences, we continually
improve how we attract and retain talent. In addition to competitive wages, quality benefits, and a safe work environment, we
offer a broad range of employment opportunities for workers of all ages and aspirations. During the past decade, Kroger has
added 100,000 new jobs in communities across America. Many supermarket roles offer opportunities to learn new skills, grow
and advance careers — inside or outside our family of companies.

Associates at all levels of the Company have access to training and education programs to build their skills and prepare for
the roles they want. In 2021, we expect to spend approximately $125 million on training our associates through onboarding,
leadership development programs, and programs designed to upskill associates across the Company. We continue to invest in
new platforms and applications to make learning more accessible to our associates.

Beyond our own programs, associates can take advantage of our tuition reimbursement benefit, which offers up to $3,500
annually — $21,000 over the course of employment — toward continuing education. These funds can be applied to education
programs like certifications, associate or graduate degrees. Kroger has invested more than $15 million in this program since it
launched in 2018.

Rewarding Our Associates

We care about our associates’ overall well-being — physical, financial and emotional — and provide wages and benefits that
help associates take care of themselves and their families. Between 2018 and 2020, we invested an incremental $800 million in
associate wages. Since 2018, Kroger’s average retail hourly wage increased to over $15 per hour. Including benefit equivalents,
the average rate surpasses $20 per hour.

Promoting Diversity, Equity & Inclusion

Diversity and inclusion have been among Kroger’s values for decades. We strive to reflect the communities we serve and
foster a culture that empowers everyone to be their true self, inspires collaboration, and feeds the human spirit. During the past
year, we have taken a very thoughtful and purposeful approach to enact meaningful change and develop what we believe are the
right actions to achieve true and lasting equality. Our new Framework for Action: Diversity, Equity & Inclusion plan reflects our
desire to redefine, deepen, and advance our commitment, mobilizing our people, passion, scale and resources. The following
summarizes our framework: Create a More Inclusive Culture; Develop Diverse Talent; Advance Diverse Partnerships; Advance
Equitable Communities; Deeply Listen and Report Progress.

Creating a Safe Environment

Our associates’ safety is a top priority and it is one of our core values. Since March of 2020, we have made significant
investments to reward and safeguard our associates and customers. At the onset of the COVID-19 pandemic, we activated our
Pandemic Preparedness Plan and Business Resilience Plan to help protect frontline associates, stay open to serve our customers
and communities, and anticipate and adapt to critical needs in a rapidly changing situation. Since then, we have enacted more
than 30 policy changes to help keep our associates safe, including offering paid emergency leave to those most directly affected
by COVID-19, providing personal protective equipment, offering free testing through our COVID-19 at-home test kits, and
promoting physical distancing in our locations. We are committed to supporting the health and well-being of our associates by
providing a robust range of physical and mental health benefits and offering an incentive to associates who choose to get the
COVID-19 vaccine.

Beyond the pandemic, we prioritize providing the right safety training and equipment, safe working conditions and resources
to maintain and improve associates’ well-being. Through our strategy to set clear expectations, routine monitoring, and regular
communication and engagement, we reduce the number of injuries and accidents that happen in our workplace.

6

We track health and safety metrics centrally for an enterprise-wide view of issues, trends and opportunities and monitor
associate injury performance including total injuries, Occupational Safety and Health Administration (“OSHA”) injury rates, and
lost-time injuries, as well as customer injury metrics like slip-and-fall injuries. We also track the completion of required training
for associates and we regularly share these metrics with leaders and relevant team members to inform management decisions.

Supporting Labor Relations

A majority of our employees are covered by collective bargaining agreements negotiated with local unions affiliated with
one of several different international unions. There are approximately 350 such agreements, usually with terms of three to five
years. Our objective in every negotiation is to find a fair and reasonable balance on compensation packages that provide solid
wages as well as good quality, affordable health care and retirement benefits while also keeping our family of companies
competitive in the market.

INFORMATION ABOUT OUR EXECUTIVE OFFICERS

The following is a list of the names and ages of the executive officers and the positions held by each such person. Except as
otherwise noted, each person has held office for at least five years. Each officer will hold office at the discretion of the Board for
the ensuing year until removed or replaced.

Name      Age      Recent Employment History

Mary E. Adcock 45 Ms. Adcock was elected Senior Vice President effective May 1, 2019 and is responsible for
retail operations as well as the oversight of several Kroger retail divisions. From June 2016
to April 2019, she served as Group Vice President of Retail Operations. Prior to that, she
served as Vice President of Operations for Kroger’s Columbus Division from November
2015 to May 2016 and as Vice President of Merchandising for the Columbus Division from
March 2014 to November 2015. From February 2012 to March 2014, Ms. Adcock served as
Vice President of Natural Foods Merchandising and from October 2009 to February 2012,
she served as Vice President of Deli/Bakery Manufacturing. Prior to that, Ms. Adcock held
several leadership positions in the manufacturing department, including human resources
manager, general manager and division operations manager. Ms. Adcock joined Kroger in
1999 as human resources assistant manager at the Country Oven Bakery in Bowling Green,
Kentucky.

Stuart W. Aitken 49 Mr. Aitken was named Senior Vice President and Chief Merchant and Marketing Officer in
August 2020. He was elected Senior Vice President in February 2019 and served as Group
Vice President from June 2015 to February 2019. He is responsible for sales, pricing,
promotional and category planning for fresh foods, center store and general merchandise
categories, as well as analytics & execution, e-commerce and Digital Merchandising, and
Our Brands. Prior to joining Kroger, he served as the chief executive officer of dunnhumby
USA, LLC from July 2010 to June 2015. Mr. Aitken has over 15 years of marketing,
academic and technical experience across a variety of industries, and held various
leadership roles with other companies, including Michaels Stores and Safeway, Inc.

7

Gabriel Arreaga 46 Mr. Arreaga was elected Senior Vice President of Supply Chain in December 2020. He is
responsible for the company’s industry-leading Supply Chain organization, Logistics,
Inventory & Replenishment, Manufacturing, and Fulfillment Centers. Prior to Kroger, Mr.
Arreaga served as senior vice president of Supply Chains for Mondelez, where he was
responsible for all operations and functions from field to consumer, internal and external
factories, fulfillment centers, direct to store branches, Logistics and product development.
He was also global vice president of Operations for Stanley Black and Decker and held
numerous leadership roles at Unilever including vice president of Food and Beverage
Operations.

Yael Cosset 47 Mr. Cosset was elected Senior Vice President and Chief Information Officer in May 2019
and is responsible for leading Kroger’s digital strategy, focused on building Kroger’s
presence in the marketplace in digital channels, personalization and e-commerce. In August …

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Section 1: 10-K (10-K)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended February 2, 2019.

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-303

THE KROGER CO.
(Exact name of registrant as specified in its charter)

Ohio 31-0345740

(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)

1014 Vine Street, Cincinnati, OH 45202
(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code (513) 762-4000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Name of each exchange on which registered

Common Stock $1 par value New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

NONE

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§299.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s
knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of
“large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐
Non-accelerated filer ☐ Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the average bid and asked price of such common equity, as of the last business day
of the registrant’s most recently completed second fiscal quarter (August 18, 2018). $25.0 billion.

The number of shares outstanding of the registrant’s common stock, as of the latest practicable date. 798,327,065 shares of Common Stock of $1 par value, as of March 28, 2019.

Documents Incorporated by Reference:

Portions of Kroger’s definitive proxy statement for its 2019 annual meeting of shareholders, which shall be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal
year to which this Report relates, are incorporated by reference into Part III of this Report.

PART I

FORWARD LOOKING STATEMENTS.

This Annual Report on Form 10-K contains forward-looking statements about our future performance. These statements are based on our
assumptions and beliefs in light of the information currently available to us. These statements are subject to a number of known and unknown
risks, uncertainties and other important factors, including the risks and other factors discussed in “Risk Factors” and “Outlook” below, that
could cause actual results and outcomes to differ materially from any future results or outcomes expressed or implied by such forward looking
statements. Such statements are indicated by words such as “achieve,” “affect,” “believe,” “committed,” “continue,” “could,” “effect,”
“estimate,” “expects,” “future,” “growth,” “intends,” “likely,” “may,” “plan,” “range,” “result,” “strategy,” “strong,” “trend,” “vision,” “will,
and “would, and similar words or phrases. Moreover, statements in the sections entitled Risk Factors, Management’s Discussion and Analysis
of Financial Condition and Results of Operations (“MD&A”) and Outlook, and elsewhere in this report regarding our expectations,
projections, beliefs, intentions or strategies are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act
of 1934, as amended.

ITEM 1. BUSINESS.

The Kroger Co. (the “Company” or “Kroger”) was founded in 1883 and incorporated in 1902. As of February 2, 2019, we are one of the
largest retailers in the world based on annual sales. We also manufacture and process some of the food for sale in our supermarkets. We
maintain a web site (www.thekrogerco.com) that includes additional information about the Company. We make available through our web site,
free of charge, our annual reports on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K and our interactive data
files, including amendments. These forms are available as soon as reasonably practicable after we have filed them with, or furnished them
electronically to, the SEC.

Our revenues are predominately earned and cash is generated as consumer products are sold to customers in our stores, fuel centers and
via our online platforms. We earn income predominantly by selling products at price levels that produce revenues in excess of the costs to
make these products available to our customers. Such costs include procurement and distribution costs, facility occupancy and operational
costs and overhead expenses. Our fiscal year ends on the Saturday closest to January 31. All references to 2018, 2017 and 2016 are to the
fiscal years ended February 2, 2019, February 3, 2018 and January 28, 2017, respectively, unless specifically indicated otherwise.

EMPLOYEES

As of February 2, 2019, Kroger employed approximately 453,000 full- and part-time employees. A majority of our employees are covered
by collective bargaining agreements negotiated with local unions affiliated with one of several different international unions. There are
approximately 360 such agreements, usually with terms of three to five years.

STORES

As of February 2, 2019, Kroger operated, either directly or through its subsidiaries, 2,764 supermarkets under a variety of local banner
names, of which 2,270 had pharmacies and 1,537 had fuel centers. We offer Pickup (also referred to as ClickList®) and Harris Teeter
ExpressLane™— personalized, order online, pick up at the store services — at 1,581 of our supermarkets and provide home delivery service
to 91% of Kroger households. Approximately 54% of our supermarkets were operated in Company-owned facilities, including some
Company-owned buildings on leased land. Our current strategy emphasizes self-development and ownership of real estate. Our stores operate
under a variety of banners that have strong local ties and brand recognition. Supermarkets are generally operated under one of the following
formats: combination food and drug stores (“combo stores”); multi-department stores; marketplace stores; or price impact warehouses.

The combo store is the primary food store format. They typically draw customers from a 2 — 2.5 mile radius. We believe this format is
successful because the stores are large enough to offer the specialty departments that customers desire for one-stop shopping, including natural
food and organic sections, pharmacies, general merchandise, pet centers and high-quality perishables such as fresh seafood and organic
produce.

2

Multi-department stores are significantly larger in size than combo stores. In addition to the departments offered at a typical combo store,
multi-department stores sell a wide selection of general merchandise items such as apparel, home fashion and furnishings, outdoor living,
electronics, automotive products and toys.

Marketplace stores are smaller in size than multi-department stores. They offer full-service grocery, pharmacy and health and beauty care

departments as well as an expanded perishable offering and general merchandise area that includes apparel, home goods and toys.

Price impact warehouse stores offer a “no-frills, low cost” warehouse format and feature everyday low prices plus promotions for a wide
selection of grocery and health and beauty care items. Quality meat, dairy, baked goods and fresh produce items provide a competitive
advantage. The average size of a price impact warehouse store is similar to that of a combo store.

SEGMENTS

We operate supermarkets and multi-department stores throughout the United States. Our retail operations, which represent 97% of our
consolidated sales, is our only reportable segment. We aggregate our operating divisions into one reportable segment due to the operating
divisions having similar economic characteristics with similar long-term financial performance. In addition, our operating divisions offer
customers similar products, have similar distribution methods, operate in similar regulatory environments, purchase the majority of the
merchandise for retail sale from similar (and in many cases identical) vendors on a coordinated basis from a centralized location, serve similar
types of customers, and are allocated capital from a centralized location. Our operating divisions are organized primarily on a geographical
basis so that the operating division management team can be responsive to local needs of the operating division and can execute company
strategic plans and initiatives throughout the locations in their operating division. This geographical separation is the primary differentiation
between these retail operating divisions. The geographical basis of organization reflects how the business is managed and how our Chief
Executive Officer, who acts as our chief operating decision maker, assesses performance internally. All of our operations are domestic.
Revenues, profits and losses and total assets are shown in our Consolidated Financial Statements set forth in Item 8 below.

MERCHANDISING AND MANUFACTURING

Our Brands products play an important role in our merchandising strategy. Our supermarkets, on average, stock over 15,000 private label
items. Our Brands products are primarily produced and sold in three “tiers.” Private Selection® is one of our premium quality brands, offering
customers culinary foods and ingredients that deliver amazing eating experiences. The Kroger® brand, which represents the majority of our
private label items, is designed to consistently satisfy and delight customers with quality products that exceed or meet the national brand in
taste and efficacy, as well as with unique and differentiated products. Big K®, Check This Out…® and Heritage Farm® are some of our value
brands, designed to deliver good quality at a very affordable price. In addition, we continue to grow natural and organic Our Brands offerings
with Simple Truth® and Simple Truth Organic®. Both Simple Truth and Simple Truth Organic are free from a defined list of artificial
ingredients that customers have told us they do not want in their food, and the Simple Truth Organic products are USDA certified organic.

Approximately 32% of Our Brands units and 43% of the grocery category Our Brands units sold in our supermarkets are produced in our
food production plants; the remaining Our Brands items are produced to our strict specifications by outside manufacturers. We perform a
“make or buy” analysis on Our Brands products and decisions are based upon a comparison of market-based transfer prices versus open
market purchases. As of February 2, 2019, we operated 37 food production plants. These plants consisted of 17 dairies, 10 deli or bakery
plants, five grocery product plants, two beverage plants, one meat plant and two cheese plants.

SEASONALITY

The majority of our revenues are generally not seasonal in nature. However, revenues tend to be higher during the major holidays
throughout the year. Additionally, significant inclement weather systems, particularly winter storms, tend to affect our sales trends.

3

EXECUTIVE OFFICERS OF THE REGISTRANT

The disclosure regarding executive officers is set forth in Item 10 of Part III of this Form 10-K under the heading “Executive Officers of
the Company,” and is incorporated herein by reference.

COMPETITIVE ENVIRONMENT

For the disclosure related to our competitive environment, see Item 1A under the heading “Competitive Environment.”

ITEM 1A. RISK FACTORS.

There are risks and uncertainties that can affect our business. The significant risk factors are discussed below. The following information
should be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the “Outlook”
section in Item 7 of this Form 10-K, which include forward-looking statements and factors that could cause us not to realize our goals or meet
our expectations.

COMPETITIVE ENVIRONMENT

The operating environment for the food retailing industry continues to be characterized by intense price competition, expansion, increasing
fragmentation of retail and online formats, entry of non-traditional competitors and market consolidation. In addition, evolving customer
preferences and the advancement of online, delivery, ship to home, and mobile channels in our industry enhance the competitive environment.

We believe our Restock Kroger plan provides a balanced approach that will enable us to meet the wide-ranging needs and expectations of

our customers. However, we may be unsuccessful in implementing Restock Kroger, including our alternative profit strategy and our cost
savings initiatives, which could adversely affect our relationships with our customers, our market share and business growth, and our
operations and results. The nature and extent to which our competitors respond to the evolving and competitive industry by developing and
implementing their competitive strategies could adversely affect our profitability.

PRODUCT SAFETY

Customers count on Kroger to provide them with safe food and drugs and other merchandise. Concerns regarding the safety of the
products that we sell could cause shoppers to avoid purchasing certain products from us, or to seek alternative sources of supply even if the
basis for the concern is outside of our control. Any lost confidence on the part of our customers would be difficult and costly to reestablish.
Any issue regarding the safety of items we sell, regardless of the cause, could have a substantial and adverse effect on our reputation, financial
condition, results of operations, or cash flows.

LABOR RELATIONS

A majority of our employees are covered by collective bargaining agreements with unions, and our relationship with those unions,
including a prolonged work stoppage affecting a substantial number of locations, could have a material adverse effect on our results.

We are a party to approximately 360 collective bargaining agreements. Upon the expiration of our collective bargaining agreements, work
stoppages by the affected workers could occur if we are unable to negotiate new contracts with labor unions. A prolonged work
stoppage affecting a substantial number of locations could have a material adverse effect on our results. Further, if we are unable to control
health care, pension and wage costs, or if we have insufficient operational flexibility under our collective bargaining agreements, we may
experience increased operating costs and an adverse effect on our financial condition, results of operations, or cash flows.

4

DATA AND TECHNOLOGY

Our business is increasingly dependent on information technology systems that are complex and vital to continuing operations, resulting in
an expansion of our technological presence and corresponding risk exposure. If we were to experience difficulties maintaining or operating
existing systems or implementing new systems, we could incur significant losses due to disruptions in our operations.

Through our sales and marketing activities, we collect and store some personal information that our customers provide to us. We also
gather and retain information about our associates in the normal course of business. Under certain circumstances, we may share information
with vendors that assist us in conducting our business, as required by law, or otherwise in accordance with our privacy policy.

Our technology systems are vulnerable to disruption from circumstances beyond our control. Cyber-attackers may attempt to access

information stored in our or our vendors’ systems in order to misappropriate confidential customer or business information. Although we have
implemented procedures to protect our information, and require our vendors to do the same, we cannot be certain that our security systems will
successfully defend against rapidly evolving, increasingly sophisticated cyber-attacks as they become more difficult to detect and defend
against. Further, a Kroger associate, a contractor or other third party with whom we do business may in the future circumvent our security
measures in order to obtain information or may inadvertently cause a breach involving information. In addition, hardware, software or
applications we may use may have inherent defects or could be inadvertently or intentionally applied or used in a way that could compromise
our information security.

Our continued investment in our information technology systems may not effectively insulate us from potential attacks, breaches or

disruptions to our business operations, which could result in a loss of customers or business information, negative publicity, damage to our
reputation, and exposure to claims from customers, financial institutions, regulatory authorities, payment card associations, associates and
other persons. Any such events could have an adverse effect on our business, financial condition and results of operations and may not be
covered by our insurance. In addition, compliance with privacy and information security laws and standards may result in significant expense
due to increased investment in technology and the development of new operational processes and may require us to devote significant
management resources to address these issues.

Additionally, on October 1, 2015, the payment card industry shifted liability for certain transactions to retailers who are not able to accept
Europay, MasterCard, Visa (EMV) transactions. We completed the implementation of the EMV technology for our supermarket transactions,
and have a plan in place to complete implementation for our fuel centers prior to the liability shift for fuel centers, which will occur in 2020.

INDEBTEDNESS

Our indebtedness could reduce our ability to obtain additional financing for working capital, mergers and acquisitions or other purposes
and could make us vulnerable to future economic downturns as well as competitive pressures. If debt markets do not permit us to refinance
certain maturing debt, we may be required to dedicate a substantial portion of our cash flow from operations to payments on our
indebtedness. Changes in our credit ratings, or in the interest rate environment, could have an adverse effect on our financing costs and
structure.

LEGAL PROCEEDINGS AND INSURANCE

From time to time, we are a party to legal proceedings, including matters involving personnel and employment issues, personal injury,
antitrust claims and other proceedings. Other legal proceedings purport to be brought as class actions on behalf of similarly situated
parties. Some of these proceedings could result in a substantial loss to Kroger. We estimate our exposure to these legal proceedings and
establish accruals for the estimated liabilities, where it is reasonably possible to estimate and where an adverse outcome is probable. Assessing
and predicting the outcome of these matters involves substantial uncertainties. Adverse outcomes in these legal proceedings, or changes in our
evaluations or predictions about the proceedings, could have a material adverse effect on our financial results. Please also refer to the “Legal
Proceedings” section in Item 3 and the “Litigation” section in Note 13 to the Consolidated Financial Statements.

5

We use a combination of insurance and self-insurance to provide for potential liability for workers’ compensation, automobile and general
liability, property, director and officers’ liability, and employee health care benefits. Any actuarial projection of losses is subject to a high
degree of variability. Changes in legal claims, trends and interpretations, variability in inflation rates, changes in the nature and method of
claims settlement, benefit level changes due to changes in applicable laws, insolvency of insurance carriers, and changes in discount rates
could all affect our financial condition, results of operations, or cash flows.

MULTI-EMPLOYER PENSION OBLIGATIONS

As discussed in more detail below in “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical
Accounting Policies-Multi-Employer Pension Plans,” Kroger contributes to several multi-employer pension plans based on obligations arising
under collective bargaining agreements with unions representing employees covered by those agreements. We believe that the present value of
actuarially accrued liabilities in most of these multi-employer plans substantially exceeds the value of the assets held in trust to pay benefits,
and we expect that Kroger’s contributions to those funds will increase over the next few years. A significant increase to those funding
requirements could adversely affect our financial condition, results of operations, or cash flows. Despite the fact that the pension obligations
of these funds are not the liability or responsibility of the Company, except as noted below, there is a risk that the agencies that rate our
outstanding debt instruments could view the underfunded nature of these plans unfavorably, or adjust their current views unfavorably, when
determining their ratings on our debt securities. Any downgrading of our debt ratings likely would adversely affect our cost of borrowing and
access to capital.

We also currently bear the investment risk of two multi-employer pension plans in which we participate. In addition, we have been
designated as the named fiduciary of these funds with sole investment authority of the assets of these funds. If investment results fail to meet
our expectations, we could be required to make additional contributions to fund a portion of or the entire shortfall, which could have an
adverse effect on our business, financial condition, results of operations, or cash flows.

INTEGRATION OF NEW BUSINESS

We enter into mergers, acquisitions and strategic alliances with expected benefits including, among other things, operating efficiencies,
procurement savings, innovation, sharing of best practices and increased market share that may allow for future growth. Achieving the
anticipated benefits may be subject to a number of significant challenges and uncertainties, including, without limitation, whether unique
corporate cultures will work collaboratively in an efficient and effective manner, the coordination of geographically separate organizations, the
possibility of imprecise assumptions underlying expectations regarding potential synergies and the integration process, unforeseen expenses
and delays, and competitive factors in the marketplace. We could also encounter unforeseen transaction and integration-related costs or other
circumstances such as unforeseen liabilities or other issues. Many of these potential circumstances are outside of our control and any of them
could result in increased costs, decreased revenue, decreased synergies and the diversion of management time and attention. If we are unable
to achieve our objectives within the anticipated time frame, or at all, the expected benefits may not be realized fully or at all, or may take
longer to realize than expected, which could have an adverse effect on our business, financial condition and results of operations, or cash
flows.

FUEL

We sell a significant amount of fuel, which could face increased regulation and demand could be affected by concerns about the effect of
emissions on the environment as well as retail price increases. We are unable to predict future regulations, environmental effects, political
unrest, acts of terrorism and other matters that may affect the cost and availability of fuel, and how our customers will react, which could
adversely affect our financial condition, results of operations, or cash flows.

6

ECONOMIC CONDITIONS

Our operating results could be materially impacted by changes in overall economic conditions that impact consumer confidence and
spending, including discretionary spending. Future economic conditions affecting disposable consumer income such as employment levels,
business conditions, changes in housing market conditions, the availability of credit, interest rates, tax rates, the impact of natural disasters or
acts of terrorism, and other matters could reduce consumer spending. Increased fuel prices could also have an effect on consumer spending
and on our costs of producing and procuring products that we sell. We are unable to predict how the global economy and financial markets
will perform. If the global economy and financial markets do not perform as we expect, it could adversely affect our financial condition,
results of operations, or cash flows.

WEATHER AND NATURAL DISASTERS

A large number of our stores and distribution facilities are geographically located in areas that are susceptible to hurricanes, tornadoes,
floods, droughts and earthquakes. Weather conditions and natural disasters could disrupt our operations at one or more of our facilities,
interrupt the delivery of products to our stores, substantially increase the cost of products, including supplies and materials and substantially
increase the cost of energy needed to operate our facilities or deliver products to our facilities. Adverse weather and natural disasters could
materially affect our financial condition, results of operations, or cash flows.

GOVERNMENT REGULATION

Our stores are subject to various laws, regulations, and administrative practices that affect our business. We must comply with numerous
provisions regulating, among other things, health and sanitation standards, food labeling and safety, equal employment opportunity, minimum
wages, and licensing for the sale of food, drugs, and alcoholic beverages. We cannot predict future laws, regulations, interpretations,
administrative orders, or applications, or the effect they will have on our operations. They could, however, significantly increase the cost of
doing business. They also could require the reformulation of some of the products that we sell (or manufacture for sale to third parties) to meet
new standards. We also could be required to recall or discontinue the sale of products that cannot be reformulated. These changes could result
in additional record keeping, expanded documentation of the properties of certain products, expanded or different labeling, or scientific
substantiation. Any or all of these requirements could have an adverse effect on our financial condition, results of operations, or cash flows.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

None.

ITEM 2. PROPERTIES.

As of February 2, 2019, we operated approximately 2,800 owned or leased supermarkets, distribution warehouses and food production
plants through divisions, subsidiaries or affiliates. These facilities are located throughout the United States. While our current strategy
emphasizes ownership of real estate, a substantial portion of the …

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K
(Mark One)

☒☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended February 1, 2020.

OR

☐☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                    to                   

Commission file number 1-303

THE KROGER CO.
(Exact name of registrant as specified in its charter)

Ohio      31-0345740
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)

1014 Vine Street, Cincinnati, OH 45202
(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code (513) 762-4000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol Name of each exchange on which registered
Common, $1.00 Par Value KR New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

NONE

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes  ⌧ No  ◻

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes  ◻ No  ⌧

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  ⌧ No  ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes  ⌧ No  ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth
company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange
Act.

Large accelerated filer     ⌧ Accelerated filer     ◻
Non-accelerated filer     ◻ Smaller reporting company     ☐

Emerging growth company     ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ◻

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).
Yes  ☐ No  ⌧

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the average bid and asked price of such common
equity, as of the last business day of the registrant’s most recently completed second fiscal quarter (August 17, 2019). $18.2 billion.

The number of shares outstanding of the registrant’s common stock, as of the latest practicable date. 777,891,827 shares of Common Stock of $1 par value, as of March 25,
2020.

Documents Incorporated by Reference:

Portions of Kroger’s definitive proxy statement for its 2020 annual meeting of shareholders, which shall be filed with the Securities and Exchange Commission within 120 days
after the end of the fiscal year to which this Report relates, are incorporated by reference into Part III of this Report.

The Kroger Co.
Form 10-K

For the Fiscal Year Ended February 1, 2020

Table of Contents

Page
Part I
Item 1 Business 3
Item 1A Risk Factors 8
Item 1B Unresolved Staff Comments 13
Item 2 Properties 13
Item 3 Legal Proceedings 13
Item 4 Mine Safety Disclosures 14

Part II 14
Item 5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 14
Item 6 Selected Financial Data 17
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations 18
Item 7A Quantitative and Qualitative Disclosures About Market Risk 39
Item 8 Financial Statements and Supplementary Data 41
Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 95
Item 9A Controls and Procedures 95
Item 9B Other Information 95

Part III 96
Item 10 Directors, Executive Officers and Corporate Governance 96
Item 11 Executive Compensation 96
Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 96
Item 13 Certain Relationships and Related Transactions, and Director Independence 96
Item 14 Principal Accounting Fees and Services 97

Part IV 98
Item 15 Exhibits, Financial Statement Schedules 98
Item 16 Form 10-K Summary 100

Signatures 101

2

PART I

FORWARD LOOKING STATEMENTS.

This Annual Report on Form 10-K contains forward-looking statements about our future performance. These statements are 
based on our assumptions and beliefs in light of the information currently available to us. These statements are subject to a 
number of known and unknown risks, uncertainties and other important factors, including the risks and other factors discussed in 
“Risk Factors” below, that could cause actual results and outcomes to differ materially from any future results or outcomes 
expressed or implied by such forward looking statements. Such statements are indicated by words such as “achieve,” “affect,” 
“believe,” “committed,” “continue,” “could,” “deliver,” “effect,” “estimate,” “expects,” “future,” “growth,” “intends,” “likely,” 
“may,” “model,” “plan,” “position,” “range,” “result,” “strategy,” “strong,” “trend,” “will” and “would,” and similar words or 
phrases. Moreover, statements in the sections entitled Risk Factors, Management’s Discussion and Analysis of Financial 
Condition and Results of Operations (“MD&A”), and elsewhere in this report regarding our expectations, projections, beliefs, 
intentions or strategies are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 
1934, as amended.

Various uncertainties and other factors could cause actual results to differ materially from those contained in the forward-
looking statements. These include:

● The extent to which our sources of liquidity are sufficient to meet our requirements may be affected by the state of the 
financial markets and the effect that such condition has on our ability to issue commercial paper at acceptable rates. Our 
ability to borrow under our committed lines of credit, including our bank credit facilities, could be impaired if one or 
more of our lenders under those lines is unwilling or unable to honor its contractual obligation to lend to us, or in the 
event that global pandemics, including the novel coronavirus, natural disasters or weather conditions interfere with the 
ability of our lenders to lend to us. Our ability to refinance maturing debt may be affected by the state of the financial 
markets.

● Our ability to achieve sales, earnings and incremental First-In, First-Out (“FIFO”) operating profit goals may be affected
by: COVID-19 related factors, risks and challenges, including among others, the length of time that the pandemic
continues, the temporary inability of customers to shop due to illness, quarantine, or other travel restrictions or financial
hardship, shifts in demand away from discretionary or higher priced products to lower priced products, or stockpiling or
similar pantry-filling activities, reduced workforces which may be caused by, but not limited to, the temporary inability
of the workforce to work due to illness, quarantine, or government mandates, or temporary store closures due to reduced
workforces or government mandates; labor negotiations or disputes; changes in the types and numbers of businesses that
compete with Kroger; pricing and promotional activities of existing and new competitors, including non-traditional
competitors, and the aggressiveness of that competition; Kroger’s response to these actions; the state of the economy,
including interest rates, the inflationary and deflationary trends in certain commodities, changes in tariffs, and the
unemployment rate; the effect that fuel costs have on consumer spending; volatility of fuel margins; changes in
government-funded benefit programs and the extent and effectiveness of any COVID-19 stimulus packages;
manufacturing commodity costs; diesel fuel costs related to Kroger’s logistics operations; trends in consumer spending;
the extent to which Kroger’s customers exercise caution in their purchasing in response to economic conditions; the
uncertainty of economic growth or recession; changes in inflation or deflation in product and operating costs; stock
repurchases; Kroger’s ability to retain pharmacy sales from third party payors; consolidation in the healthcare industry,
including pharmacy benefit managers; Kroger’s ability to negotiate modifications to multi-employer pension plans;
natural disasters or adverse weather conditions; the effect of public health crises or other significant catastrophic events,
including the coronavirus; the potential costs and risks associated with potential cyber-attacks or data security breaches;
the success of Kroger’s future growth plans; the ability to execute on Restock Kroger; and the successful integration of
merged companies and new partnerships.

● Our ability to achieve these goals may also be affected by our ability to manage the factors identified above. Our ability
to execute our financial strategy may be affected by our ability to generate cash flow.

● Our effective tax rate may differ from the expected rate due to changes in laws, the status of pending items with various
taxing authorities, and the deductibility of certain expenses.

We cannot fully foresee the effects of changes in economic conditions on our business.

3

Other factors and assumptions not identified above, including those discussed in Item 1A of this Report, could also cause 
actual results to differ materially from those set forth in the forward-looking information. Accordingly, actual events and results 
may vary significantly from those included in, contemplated or implied by forward-looking statements made by us or our 
representatives. We undertake no obligation to update the forward-looking information contained in this filing.

ITEM 1. BUSINESS.

The Kroger Co. (the “Company” or “Kroger”) was founded in 1883 and incorporated in 1902. As of February 1, 2020, we 
are one of the largest retailers in the world based on annual sales. We also manufacture and process some of the food for sale in 
our supermarkets. We maintain a web site (www.thekrogerco.com) that includes additional information about the Company. We 
make available through our web site, free of charge, our annual reports on Form 10-K, our quarterly reports on Form 10-Q, our 
current reports on Form 8-K and our interactive data files, including amendments. These forms are available as soon as 
reasonably practicable after we have filed them with, or furnished them electronically to, the SEC.

Our revenues are predominately earned and cash is generated as consumer products are sold to customers in our stores, fuel 
centers and via our online platforms. We earn income predominantly by selling products at price levels that produce revenues in 
excess of the costs to make these products available to our customers. Such costs include procurement and distribution costs, 
facility occupancy and operational costs and overhead expenses. Our fiscal year ends on the Saturday closest to January 31. All 
references to 2019, 2018 and 2017 are to the fiscal years ended February 1, 2020, February 2, 2019 and February 3, 2018, 
respectively, unless specifically indicated otherwise.

EMPLOYEES

As of February 1, 2020, Kroger employed approximately 435,000 full- and part-time employees. A majority of our
employees are covered by collective bargaining agreements negotiated with local unions affiliated with one of several different
international unions. There are approximately 360 such agreements, usually with terms of three to five years.

STORES

As of February 1, 2020, Kroger operated, either directly or through its subsidiaries, 2,757 supermarkets under a variety of
local banner names, of which 2,270 had pharmacies and 1,567 had fuel centers.  We offer Pickup (also referred to as ClickList®)
and Harris Teeter ExpressLane™— personalized, order online, pick up at the store services — at 1,989 of our supermarkets and
provide home delivery service to 97% of Kroger households. Approximately 54% of our supermarkets were operated in
Company-owned facilities, including some Company-owned buildings on leased land.  Our current strategy emphasizes self-
development and ownership of real estate.  Our stores operate under a variety of banners that have strong local ties and brand
recognition. Supermarkets are generally operated under one of the following formats: combination food and drug stores (“combo
stores”); multi-department stores; marketplace stores; or price impact warehouses.

The combo store is the primary food store format.  They typically draw customers from a 2-2.5 mile radius.  We believe this
format is successful because the stores are large enough to offer the specialty departments that customers desire for one-stop
shopping, including natural food and organic sections, pharmacies, general merchandise, pet centers and high-quality perishables
such as fresh seafood and organic produce.

Multi-department stores are significantly larger in size than combo stores.  In addition to the departments offered at a typical
combo store, multi-department stores sell a wide selection of general merchandise items such as apparel, home fashion and
furnishings, outdoor living, electronics, automotive products and toys.

Marketplace stores are smaller in size than multi-department stores. They offer full-service grocery, pharmacy and health 
and beauty care departments as well as an expanded perishable offering and general merchandise area that includes apparel, home 
goods and toys.

4

Price impact warehouse stores offer a “no-frills, low cost” warehouse format and feature everyday low prices plus 
promotions for a wide selection of grocery and health and beauty care items. Quality meat, dairy, baked goods and fresh produce 
items provide a competitive advantage. The average size of a price impact warehouse store is similar to that of a combo store.

SEGMENTS

We operate supermarkets and multi-department stores throughout the United States.  Our retail operations, which represent 
97% of our consolidated sales, is our only reportable segment. We aggregate our operating divisions into one reportable segment 
due to the operating divisions having similar economic characteristics with similar long-term financial performance. In addition, 
our operating divisions offer customers similar products, have similar distribution methods, operate in similar regulatory 
environments, purchase the majority of the merchandise for retail sale from similar (and in many cases identical) vendors on a 
coordinated basis from a centralized location, serve similar types of customers, and are allocated capital from a centralized 
location. Our operating divisions are organized primarily on a geographical basis so that the operating division management team 
can be responsive to local needs of the operating division and can execute company strategic plans and initiatives throughout the 
locations in their operating division. This geographical separation is the primary differentiation between these retail operating 
divisions. The geographical basis of organization reflects how the business is managed and how our Chief Executive Officer, 
who acts as our chief operating decision maker, assesses performance internally. All of our operations are domestic. Revenues,
profits and losses and total assets are shown in our Consolidated Financial Statements set forth in Item 8 below.

MERCHANDISING AND MANUFACTURING

Our Brands products play an important role in our merchandising strategy. Our supermarkets, on average, stock over 16,000
private label items. Our Brands …

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549
___________________________________________

FORM 10-K
___________________________________________

☒ Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended January 31, 2020, or

☐ Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

Commission file number 001-6991.
___________________________________________

WALMART INC.
(Exact name of registrant as specified in its charter)

___________________________________________

DE 71-0415188
(State or other jurisdiction of
incorporation or organization)

(IRS Employer Identification No.)

702 S.W. 8th Street

72716Bentonville, AR
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (479) 273-4000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, par value $0.10 per share WMT NYSE

1.900% Notes Due 2022 WMT22 NYSE
2.550% Notes Due 2026 WMT26 NYSE

Securities registered pursuant to Section 12(g) of the Act: None
___________________________________________

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ý No ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.
Yes ¨ No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least
the past 90 days.
Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging
growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2
of the Exchange Act.

Large Accelerated Filer ☒ Accelerated Filer ☐☐
Non-Accelerated Filer ☐☐ Smaller Reporting Company ☐☐
Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒☒

As of July 31, 2019, the aggregate market value of the voting common stock of the registrant held by non-affiliates of the registrant, based on the closing sale price
of those shares on the New York Stock Exchange reported on July 31, 2019, was $155,125,468,742. For the purposes of this disclosure only, the registrant has
assumed that its directors, executive officers (as defined in Rule 3b-7 under the Exchange Act) and the beneficial owners of 5% or more of the registrant’s
outstanding common stock are the affiliates of the registrant.

The registrant had 2,832,277,220 shares of common stock outstanding as of March 18, 2020.

DOCUMENTS INCORPORATED BY REFERENCE

Document Parts Into Which Incorporated

Portions of the registrant’s Proxy Statement for the Annual Meeting of Shareholders
to be held June 3, 2020 (the “Proxy Statement”)

Part III

Walmart Inc.
Form 10-K

For the Fiscal Year Ended January 31, 2020

Table of Contents

Page
Part I
Item 1 Business 7
Item 1A Risk Factors 14
Item 1B Unresolved Staff Comments 23
Item 2 Properties 24
Item 3 Legal Proceedings 26
Item 4 Mine Safety Disclosures 27

Part II
Item 5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 28
Item 6 Selected Financial Data 29
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations 30
Item 7A Quantitative and Qualitative Disclosures About Market Risk 44
Item 8 Financial Statements and Supplementary Data 46
Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 78
Item 9A Controls and Procedures 78
Item 9B Other Information 78

Part III
Item 10 Directors, Executive Officers and Corporate Governance 79
Item 11 Executive Compensation 79
Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 79
Item 13 Certain Relationships and Related Transactions, and Director Independence 79
Item 14 Principal Accounting Fees and Services 79

Part IV
Item 15 Exhibits, Financial Statement Schedules 80
Item 16 Form 10-K Summary 82

Signatures 83

WALMART INC.

ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED JANUARY 31, 2020

All references in this Annual Report on Form 10-K, the information incorporated into this Annual Report on Form 10-K by reference to information in the Proxy
Statement of Walmart Inc. for its Annual Shareholders’ Meeting to be held on June 3, 2020 and in the exhibits to this Annual Report on Form 10-K to “Walmart
Inc.,” “Wal-Mart Stores, Inc.,” “Walmart,” “the Company,” “our Company,” “we,” “us” and “our” are to the Delaware corporation named “Wal-Mart Stores, Inc.”
prior to February 1, 2018 and named “Walmart Inc.” commencing on February 1, 2018 and, except where expressly noted otherwise or the context otherwise
requires, that corporation’s consolidated subsidiaries.

PART I
Cautionary Statement Regarding Forward-Looking Statements
This Annual Report on Form 10-K and other reports, statements, and information that Walmart Inc. (which individually or together with its subsidiaries, as the
context otherwise requires, is referred to as “we,” “Walmart” or the “Company”) has filed with or furnished to the Securities and Exchange Commission (“SEC”) or
may file with or furnish to the SEC in the future, and prior or future public announcements and presentations that we or our management have made or may make,
include or may include, or incorporate or may incorporate by reference, statements that may be deemed to be “forward-looking statements” within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended (the “Act”), that are intended to enjoy the protection of the safe harbor for forward-looking
statements provided by the Act.

Nature of Forward-Looking Statements
Such forward-looking statements are not statements of historical facts, but instead express our estimates or expectations for our consolidated, or one of our
segment’s, economic performance or results of operations for future periods or as of future dates or events or developments that may occur in the future or discuss
our plans, objectives or goals. These forward-looking statements relate to:

• the growth of our business or change in our competitive position in the future or in or over particular periods;
• the amount, number, growth, increase, reduction or decrease in or over certain periods, of or in certain financial items or measures or operating measures,

including our earnings per share, net sales, comparable store and club sales, our Walmart U.S. operating segment’s eCommerce sales, liabilities, expenses
of certain categories, expense leverage, returns, capital and operating investments or expenditures of particular types and new store openings;

• investments and capital expenditures we will make and how certain of those investments and capital expenditures are expected to be financed;
• our increasing investments in eCommerce, technology, supply chain, store remodels and other omni-channel customer initiatives, such as same day

pickup and delivery;
• volatility in currency exchange rates and fuel prices affecting our or one of our segments’ results of operations;
• the Company continuing to provide returns to shareholders through share repurchases and dividends, the use of share repurchase authorization over a

certain period or the source of funding of a certain portion of our share repurchases;
• our sources of liquidity, including our cash, continuing to be adequate or sufficient to fund and finance our operations, expansion activities, dividends and

share repurchases, to meet our cash needs and to fund our operations;
• the insignificance of ineffective hedges; and reclassification of amounts related to our derivatives;
• our effective tax rate for certain periods and the realization of certain net deferred tax assets and the effects of resolutions of tax-related matters;
• the effect of adverse decisions in, or settlement of, litigation or other proceedings or investigations to which we are subject;
• the effect on the Company’s results of operations or financial condition of the Company’s adoption of certain new, or amendments to existing, accounting

standards; or
• our commitments, intentions, plans or goals related to the sustainability of our environment and supply chains, the promotion of economic opportunity or

other societal initiatives.
Our forward-looking statements may also include statements of our strategies, plans and objectives for our operations, including areas of future focus in our
operations, and the assumptions underlying any of the forward-looking statements we make. The forward-looking statements we make can typically be identified
by the use therein of words and phrases such as “aim,” “anticipate,” “believe,” “could be,” “could increase,” “could occur,” “could result,” “continue,” “estimate,”
“expansion,” “expect,” “expectation,” “expected to be,” “focus,” “forecast,” “goal,” “grow,” “guidance,” “intend,” “invest,” “is expected,” “may continue,” “may
fluctuate,” “may grow,” “may impact,” “may result,” “objective,” “plan,” “priority,” “project,” “strategy,” “to be,” “we’ll,” “we will,” “will add,” “will allow,” “will
be,” “will benefit,” “will change,” “will come in at,” “will continue,” “will decrease,” “will grow,” “will have,” “will impact,” “will include,” “will increase,” “will
open,” “will remain,” “will result,”

4

“will stay,” “will strengthen,” “would be,” “would decrease” and “would increase,” variations of such words or phrases, other phrases commencing with the word
“will” or similar words and phrases denoting anticipated or expected occurrences or results.

Risks Factors and Uncertainties Affecting Our Business
Our business operations are subject to numerous risks, factors and uncertainties, domestically and internationally, outside of our control. One, or a combination, of
these risks, factors and uncertainties could materially affect any of those matters as to which we have made forward-looking statements and cause our actual results
or an actual event or occurrence to differ materially from those results or an event or occurrence described in a forward-looking statement. These risks, factors and
uncertainties, which may be global in their effect or affect only some of the markets in which we operate and which may affect us on a consolidated basis or affect
only some of our reportable segments, include, but are not limited to:
Economic Factors

• economic, geo-political, capital markets and business conditions, trends and events around the world and in the markets in which Walmart operates;
• currency exchange rate fluctuations;
• changes in market rates of interest;
• changes in market levels of wages;
• changes in the size of various markets, including eCommerce markets;
• unemployment levels;
• inflation or deflation, generally and in certain product categories;
• transportation, energy and utility costs;
• commodity prices, including the prices of oil and natural gas;
• consumer confidence, disposable income, credit availability, spending levels, shopping patterns, debt levels, and demand for certain merchandise;
• trends in consumer shopping habits around the world and in the markets in which Walmart operates;
• consumer enrollment in health and drug insurance programs and such programs’ reimbursement rates and drug formularies; and
• initiatives of competitors, competitors’ entry into and expansion in Walmart’s markets, and competitive pressures;

Operating Factors
• the amount of Walmart’s net sales and operating expenses denominated in U.S. dollar and various foreign currencies;
• the financial performance of Walmart and each of its segments, including the amounts of Walmart’s cash flow during various periods;
• customer transaction and average ticket in Walmart’s stores and clubs and on its eCommerce platforms;
• the mix of merchandise Walmart sells and its customers purchase;
• the availability of goods from suppliers and the cost of goods acquired from suppliers;
• the effectiveness of the implementation and operation of Walmart’s strategies, plans, programs and initiatives;
• the impact of acquisitions, divestitures, store or club closures and other strategic decisions;
• Walmart’s ability to successfully integrate acquired businesses, including within the eCommerce space;
• unexpected changes in Walmart’s objectives and plans;
• the amount of shrinkage Walmart experiences;
• consumer acceptance of and response to Walmart’s stores and clubs, eCommerce platforms, programs, merchandise offerings and delivery methods;
• Walmart’s gross profit margins, including pharmacy margins and margins of other product categories;
• the selling prices of gasoline and diesel fuel;
• disruption of seasonal buying patterns in Walmart’s markets;
• disruptions in Walmart’s supply chain;
• cybersecurity events affecting Walmart and related costs and impact of any disruption in business;
• Walmart’s labor costs, including healthcare and other benefit costs;
• Walmart’s casualty and accident-related costs and insurance costs;
• the size of and turnover in Walmart’s workforce and the number of associates at various pay levels within that workforce;
• the availability of necessary personnel to staff Walmart’s stores, clubs and other facilities;
• delays in the opening of new, expanded, relocated or remodeled units;
• developments in, and the outcome of, legal and regulatory proceedings and investigations to which Walmart is a party or is subject, and the liabilities,

obligations and expenses, if any, that Walmart may incur in connection therewith;
• changes in the credit ratings assigned to the Company’s commercial paper and debt securities by credit rating agencies;
• Walmart’s effective tax rate; and
• unanticipated changes in accounting judgments and estimates;

5

Regulatory and Other Factors
• changes in existing tax, labor and other laws and changes in tax rates, including the enactment of laws and the adoption and interpretation of

administrative rules and regulations;
• the imposition of new taxes on imports and new tariffs and changes in existing tariff rates;
• the imposition of new trade restrictions and changes in existing trade restrictions;
• adoption or creation of new, and modification of existing, governmental policies, programs and initiatives in the markets in which Walmart operates and

elsewhere and actions with respect to such policies, programs and initiatives;
• changes in currency control laws;
• changes in the level of public assistance payments;
• one or more prolonged federal government shutdowns;
• the timing and amount of federal income tax refunds;
• natural disasters, changes in climate, catastrophic events and global health epidemics or pandemics such as the recent coronavirus outbreak; and
• changes in generally accepted accounting principles in the United States.

We typically earn a disproportionate part of our annual operating income in the fourth quarter as a result of seasonal buying patterns, which patterns are difficult to
forecast with certainty and can be affected by many factors.

Other Risk Factors; No Duty to Update
The above list of factors that may affect the estimates and expectations discussed in or implied or contemplated by forward-looking statements we make or are
made on our behalf is not exclusive. We are subject to other risks discussed under “Part I, Item 1A. Risk Factors,” and that we may discuss in Management’s
Discussions and Analysis of Financial Condition and Results of Operations under “Part II, Item 5,” and in risks that may be discussed under “Part II, Item 1A. Risk
Factors” and “Part I, Item 2. Management’s Discussions and Analysis of Financial Condition and Results of Operations” appearing in our Quarterly Reports on
Form 10-Q or may otherwise be disclosed in our Quarterly Reports on Form 10-Q and other reports filed with the SEC. Investors and other readers are urged to
consider all of these risks, uncertainties and other factors carefully in evaluating our forward-looking statements.
The forward-looking statements that we make or that are made by others on our behalf are based on our knowledge of our business and our operating environment
and assumptions that we believe to be or will believe to be reasonable when such forward-looking statements were or are made. As a consequence of the factors
described above, the other risks, uncertainties and factors we disclose below and in the other reports as mentioned above, other risks not known to us at this time,
changes in facts, assumptions not being realized or other circumstances, our actual results may differ materially from those discussed in or implied or contemplated
by our forward-looking statements. Consequently, this cautionary statement qualifies all forward-looking statements we make or that are made on our behalf,
including those made herein and incorporated by reference herein. We cannot assure you that the results or developments expected or anticipated by us will be
realized or, even if substantially realized, that those results or developments will result in the expected consequences for us or affect us, our business, our
operations or our operating results in the manner or to the extent we expect. We caution readers not to place undue reliance on such forward-looking statements,
which speak only as of their dates. We undertake no obligation to revise or update any of the forward-looking statements to reflect subsequent events or
circumstances except to the extent required by applicable law.

6

ITEM 1. BUSINESS

General
Walmart Inc. (“Walmart,” the “Company” or “we”) helps people around the world save money and live better – anytime and anywhere – by providing the
opportunity to shop in retail stores and through eCommerce. Through innovation, we strive to continuously improve a customer-centric experience that seamlessly
integrates our eCommerce and retail stores in an omni-channel offering that saves time for our customers. Each week, we serve over 265 million customers who
visit approximately 11,500 stores and numerous eCommerce websites under 56 banners in 27 countries.
Our strategy is to make every day easier for busy families, operate with discipline, sharpen our culture and become digital, and make trust a competitive advantage.
Making life easier for busy families includes our commitment to price leadership, which has been and will remain a cornerstone of our business, as well as
increasing convenience to save our customers time. By leading on price, we earn the trust of our customers every day by providing a broad assortment of quality
merchandise and services at everyday low prices (“EDLP”). EDLP is our pricing philosophy under which we price items at a low price every day so our customers
trust that our prices will not change under frequent promotional activity. Everyday low cost (“EDLC”) is our commitment to control expenses so our cost savings
can be passed along to our customers.
Our operations comprise three reportable segments: Walmart U.S., Walmart International and Sam’s Club. Our fiscal year ends on January 31 for our United States
(“U.S.”) and Canadian operations. We consolidate all other operations generally using a one-month lag and on a calendar year basis. Our discussion is as of and for
the fiscal years ended January 31, 2020 (“fiscal 2020”), January 31, 2019 (“fiscal 2019”) and January 31, 2018 (“fiscal 2018”). During fiscal 2020, we generated
total revenues of $524.0 billion, which primarily comprised net sales of $519.9 billion.
We maintain our principal offices at 702 S.W. 8th Street, Bentonville, Arkansas 72716, USA. Our common stock trades on the New York Stock Exchange under
the symbol “WMT.”

The Development of Our Company
Although Walmart was incorporated in Delaware in October 1969, the businesses conducted by our founders began in 1945 when Sam M. Walton opened a
franchise Ben Franklin variety store in Newport, Arkansas. In 1946, his brother, James L. Walton, opened a similar store in Versailles, Missouri. Until 1962, our
founders’ business was devoted entirely to the operation of variety stores. In that year, the first Wal-Mart Discount City, which was a discount store, opened in
Rogers, Arkansas. In 1983, we opened our first Sam’s Club, and in 1988, we opened our first supercenter. In 1998, we opened our first Walmart Neighborhood
Market. In 1991, we began our first international initiative when we entered into a joint venture in Mexico. Since then, our international presence has expanded
and, as of January 31, 2020, our Walmart International segment conducted business in 26 countries.
In 2000, we began our first eCommerce initiative by creating walmart.com and then later that year, adding samsclub.com. Since then, our eCommerce presence has
continued to grow. In 2007, leveraging our physical stores, walmart.com launched its Site to Store service, enabling customers to make a purchase online and pick
up merchandise in stores. Since 2016, we have made several eCommerce acquisitions which have enabled us to leverage technology, talent and expertise, as well
as incubate digitally-native brands and expand our assortment on walmart.com and in stores. In fiscal 2017, walmart.com launched free two-day shipping and we
created Store No 8, a technology incubator with a focus to drive eCommerce innovation. Then in fiscal 2019, we continued to enhance our eCommerce initiatives
with the acquisition of a majority stake of Flipkart Private Limited (“Flipkart”), an Indian-based eCommerce marketplace, with an ecosystem that includes
eCommerce platforms of Flipkart and Myntra as well as PhonePe, a digital transaction platform.
In fiscal 2020, we launched NextDay Delivery to more than 75 percent of the U.S. population, launched Delivery Unlimited from 1,600 locations in the U.S. and
expanded Same Day Pickup to nearly 3,200 locations. Our eCommerce efforts and innovation have also led to omni-channel offerings in many of our markets
including grocery pick up and/or delivery in nearly a dozen countries outside the U.S. To date, we now have more than 6,100 grocery pick up and delivery
locations globally. We are enhancing our ecosystem with our omni-channel capabilities, stores, services, eCommerce sites, supply chain combined with our more
than 2.2 million associates to better serve our customers. Together, we believe these elements produce a flywheel effect which creates customer relationships where
customers view Walmart as their primary destination.

7

Information About Our Segments
We are engaged in global operations of retail, wholesale and other units, as well as eCommerce, located throughout the U.S., Africa, Argentina, Canada, Central
America, Chile, China, India, Japan, Mexico and the United Kingdom. Our operations are conducted in three reportable segments: Walmart U.S., Walmart
International and Sam’s Club. We define our segments as those operations whose results the chief operating decision maker (“CODM”) regularly reviews to
analyze performance and allocate resources. Each of our segments contributes to the Company’s operating results differently. Each, however, has generally
maintained a consistent contribution rate to the Company’s net sales and operating income in recent years other than minor changes to the contribution rate for the
Walmart International segment due to fluctuations in currency exchange rates. We sell similar individual products and services in each of our segments. It is
impracticable to segregate and identify revenues for each of these individual products and services.
We measure the results of our segments using, among other measures, each segment’s net sales and operating income, which includes certain corporate overhead
allocations. From time to time, we revise the measurement of each segment’s operating income, including any corporate overhead allocations, as determined by the
information regularly reviewed by our CODM. When the measurement of a segment changes, previous period amounts and balances are reclassified to be
comparable to the current period’s presentation.

Walmart U.S. Segment
Walmart U.S. is our largest segment and operates in the U.S., including in all 50 states, Washington D.C. and Puerto Rico. Walmart U.S. is a mass merchandiser of
consumer products, operating under the “Walmart” and “Walmart Neighborhood Market” brands, as well as walmart.com and other eCommerce brands. Walmart
U.S. had net sales of $341.0 billion for fiscal 2020, representing 66% of our fiscal 2020 consolidated net sales, and had net sales of $331.7 billion and $318.5
billion for fiscal 2019 and 2018, respectively. Of our three segments, Walmart U.S. has historically had the highest gross profit as a percentage of net sales (“gross
profit rate”). In addition, Walmart U.S. has historically contributed the greatest amount to the Company’s net sales and operating income.

Omni-channel. Walmart U.S. provides an omni-channel experience to customers, integrating retail stores and eCommerce, through services such as “Same Day
Pickup,” “Same Day Delivery,” “Delivery Unlimited,” “NextDay Delivery,” and “Endless Aisle.” As of January 31, 2020, we had nearly 3,200 grocery pickup
locations and over 1,600 delivery locations. We have several eCommerce websites, the largest of which is walmart.com. We define eCommerce sales as sales
initiated online through our websites or through a mobile app. eCommerce sales may be fulfilled by a number of methods including our dedicated eCommerce
fulfillment centers or our stores. The following table provides the approximate size of our retail stores as of January 31, 2020:

Minimum Square

Feet
Maximum Square

Feet
Average Square

Feet
Supercenters (general merchandise and grocery) 69,000 260,000 178,000
Discount stores (general merchandise and limited grocery) 30,000 206,000 105,000
Neighborhood markets(1) (grocery) 28,000 65,000 42,000
(1) Excludes other small formats.

Merchandise. Walmart U.S. does business in three strategic merchandise units, listed below:

• Grocery consists of a full line of grocery items, including meat, produce, natural & organics, deli & bakery, dairy, frozen foods, alcoholic and
nonalcoholic beverages, floral and dry grocery, as well as consumables such as health and beauty aids, baby products, household chemicals, paper goods
and pet supplies;

• Health and wellness includes pharmacy, optical services, clinical services, and over-the-counter drugs and other medical products;
• General merchandise includes:

◦ Entertainment (e.g., electronics, cameras and supplies, photo processing services, wireless, movies, music, video games and books);
◦ Hardlines (e.g., stationery, automotive, hardware and paint, sporting goods, outdoor living and horticulture);
◦ Apparel (e.g., apparel for women, girls, men, boys and infants, as well as shoes, …

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549
___________________________________________

FORM 10-K
___________________________________________

ý Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

for the fiscal year ended January 31, 2018 , or

¨ Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

Commission file number 001-6991.
___________________________________________

WALMART INC.
(Exact name of registrant as specified in its charter)

___________________________________________

Delaware 71-0415188
(State or other jurisdiction of
incorporation or organization)

(IRS Employer Identification No.)

702 S.W. 8th Street

Bentonville, Arkansas 72716
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (479) 273-4000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Name of each exchange on which registered

Common Stock, par value $0.10 per share
1.900% Notes Due 2022
2.550% Notes Due 2026

New York Stock Exchange
New York Stock Exchange
New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None
___________________________________________

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ý
No ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.
Yes ¨
No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least
the past 90 days.
Yes ý
No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).
Yes ý
No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of
registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-
K. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging
growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of
the Exchange Act.

Large Accelerated Filer ý Accelerated Filer o
Non-Accelerated Filer o Smaller Reporting Company o
Emerging Growth Company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ¨
No ý

As o f July 31, 2017, the aggregate market value of the voting common stock of the registrant held by non-affiliates of the registrant, based on the closing sale price
of those shares on the New York Stock Exchange reported on July 31, 2017, was $114,770,199,895. For the purposes of this disclosure only, the registrant has
assumed that its directors, executive officers (as defined in Rule 3b-7 under the Exchange Act) and the beneficial owners of 5% or more of the registrant’s
outstanding common stock are the affiliates of the registrant.

The registrant had 2,950,696,818 shares of common stock outstanding as of March 28, 2018 .

DOCUMENTS INCORPORATED BY REFERENCE

Document Parts Into Which Incorporated

Portions of the registrant’s Proxy Statement for the Annual Meeting of
Shareholders to be held May 30, 2018 (the “Proxy Statement”)

Part III

Walmart Inc.
Form 10-K

For the Fiscal Year Ended January 31, 2018

Table of Contents

Page
Part I
Item 1 Business 7
Item 1A Risk Factors 17
Item 1B Unresolved Staff Comments 26
Item 2 Properties 27
Item 3 Legal Proceedings 29
Item 4 Mine Safety Disclosures 30

Part II
Item 5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 31
Item 6 Selected Financial Data 33
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations 34
Item 7A Quantitative and Qualitative Disclosures About Market Risk 49
Item 8 Financial Statements and Supplementary Data 51
Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 85
Item 9A Controls and Procedures 85
Item 9B Other Information 86

Part III
Item 10 Directors, Executive Officers and Corporate Governance 87
Item 11 Executive Compensation 87
Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 87
Item 13 Certain Relationships and Related Transactions, and Director Independence 87
Item 14 Principal Accounting Fees and Services 87

Part IV
Item 15 Exhibits, Financial Statement Schedules 88
Item 16 Form 10-K Summary 88

Signatures 89
Exhibit Index 91

WALMART INC.
(formerly “WAL-MART STORES, INC.”)

ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED JANUARY 31, 2018

On February 1, 2018, the legal name of our corporation became “Walmart Inc.,” changing from “Wal-Mart Stores, Inc.” All references in this Annual Report on
Form 10-K, the information incorporated into this Annual Report on Form 10-K by reference to information in the Proxy Statement of Walmart Inc. for its Annual
Shareholders’ Meeting to be held on May 30, 2018 and in the exhibits to this Annual Report on Form 10-K to “Walmart Inc.,” “Wal-Mart Stores, Inc.,” “Walmart,”
“the Company,” “our Company,” “we,” “us” and “our” are to the Delaware corporation named “Wal-Mart Stores, Inc.” prior to February 1, 2018 and named
“Walmart Inc.” commencing on February 1, 2018 and, except where expressly noted otherwise or the context otherwise requires, that corporation’s consolidated
subsidiaries.

PART I
Cautionary Statement Regarding Forward-Looking Statements
This Annual Report on Form 10-K and other reports, statements, and information that Walmart Inc. (which individually or together with its subsidiaries, as the
context otherwise requires, is referred to as “we,” “Walmart” or the “Company”) has filed with or furnished to the Securities and Exchange Commission (“SEC”) or
may file with or furnish to the SEC in the future, and prior or future public announcements and presentations that we or our management have made or may make,
include or may include, or incorporate or may incorporate by reference, statements that may be deemed to be “forward-looking statements” within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended (the “Act”), that are intended to enjoy the protection of the safe harbor for forward-looking
statements provided by the Act.

Nature of Forward-Looking Statements
Such forward-looking statements are not statements of historical facts, but instead express our estimates or expectations for our consolidated, or one of our
segment’s, economic performance or results of operations for future periods or as of future dates or events or developments that may occur in the future or discuss
our plans, objectives or goals. These forward-looking statements relate to:

• the growth of our business or change in our competitive position in the future or in or over particular periods;
• the amount, number, growth or increase, in or over certain periods, of or in certain financial items or measures or operating measures, including our

earnings per share, including as adjusted for certain items, net sales, comparable store and club sales, our Walmart U.S. operating segment’s eCommerce
sales, liabilities, expenses of certain categories, expense leverage, returns, capital and operating investments or expenditures of particular types, new store
openings and investments in particular formats;

• investments and capital expenditures we will make and how certain of those investments and capital expenditures are expected to be financed;
• our plans to increase investments in eCommerce, technology, store remodels and other customer initiatives, such as online grocery locations;
• volatility in currency exchange rates and fuel prices affecting our or one of our segments’ results of operations;
• the Company continuing to provide returns to shareholders through share repurchases and dividends, the use of share repurchase authorization over a

certain period or the source of funding of a certain portion of our share repurchases;
• our sources of liquidity, including our cash, continuing to be adequate or sufficient to fund and finance our operations, expansion activities, dividends and

share repurchases, to meet our cash needs and to fund our domestic operations without repatriating earnings we hold outside of the United States;
• our intention to reinvest the earnings we hold outside of the United States in our foreign operations and certain laws, other limitations and potential taxes

on anticipated future repatriations of such earnings not materially affecting our liquidity, financial condition or results of operations;
• the insignificance of ineffective hedges and reclassification of amounts related to our derivatives;
• our effective tax rate for certain periods and the realization of certain net deferred tax assets and the effects of resolutions of tax-related matters;
• the effect of adverse decisions in, or settlement of, litigation or other proceedings to which we are subject; or
• the effect on the Company’s results of operations or financial condition of the Company’s adoption of certain new, or amendments to existing, accounting

standards.
Our forward-looking statements may also include statements of our strategies, plans and objectives for our operations, including areas of future focus in our
operations, and the assumptions underlying any of the forward-looking statements we make. The forward-looking statements we make can typically be identified
by the use therein of words and phrases such as “aim,” “anticipate,” “believe,” “could be,” “could increase,” “could occur,” “could result,” “continue,” “estimate,”
“expansion,” “expect,” “expectation,” “expected to be,” “focus,” “forecast,” “goal,” “grow,” “guidance,” “intend,” “invest,” “is expected,”

4

“may continue,” “may fluctuate,” “may grow,” “may impact,” “may result,” “objective,” “plan,” “priority,” “project,” “strategy,” “to be,” “we’ll,” “we will,” “will
add,” “will allow,” “will be,” “will benefit,” “will change,” “will come in at,” “will continue,” “will decrease,” “will grow,” “will have,” “will impact,” “will
include,” “will increase,” “will open,” “will remain,” “will result,” “will stay,” “will strengthen,” “would be,” “would decrease” and “would increase,” variations of
such words or phrases, other phrases commencing with the word “will” or similar words and phrases denoting anticipated or expected occurrences or results. The
forward-looking statements include statements made in Part I, Item 3. “Legal Proceedings” in this Annual Report on Form 10-K as to our belief that the possible
loss or range of any possible loss that may be incurred in connection with certain legal proceedings will not be material to our financial condition, results of
operations, or liquidity.

Risks Factors and Uncertainties Affecting Our Business
Our business operations are subject to numerous risks, factors and uncertainties, domestically and internationally, outside of our control. One, or a combination, of
these risks, factors and uncertainties could materially affect any of those matters as to which we have made forward-looking statements and cause our actual results
or an actual event or occurrence to differ materially from those results or an event or occurrence described in a forward-looking statement. These risks, factors and
uncertainties, which may be global in their effect or affect only some of the markets in which we operate and which may affect us on a consolidated basis or affect
only some of our reportable segments, include, but are not limited to:
Economic Factors

• economic, geo-political, capital markets and business conditions, trends and events around the world and in the markets in which Walmart operates;
• currency exchange rate fluctuations;
• changes in market rates of interest;
• changes in market levels of wages;
• changes in the size of various markets, including eCommerce markets;
• unemployment levels;
• inflation or deflation, generally and in certain product categories;
• transportation, energy and utility costs;
• commodity prices, including the prices of oil and natural gas;
• consumer confidence, disposable income, credit availability, spending levels, shopping patterns, debt levels, and demand for certain merchandise;
• trends in consumer shopping habits around the world and in the markets in which Walmart operates;
• consumer enrollment in health and drug insurance programs and such programs’ reimbursement rates and drug formularies; and
• initiatives of competitors, competitors’ entry into and expansion in Walmart’s markets, and competitive pressures;

Operating Factors
• the amount of Walmart’s net sales and operating expenses denominated in U.S. dollar and various foreign currencies;
• the financial performance of Walmart and each of its segments, including the amounts of Walmart’s cash flow during various periods;
• Walmart’s need to repatriate earnings held outside of the U.S. and changes in U.S. and international tax regulations;
• customer traffic and average ticket in Walmart’s stores and clubs and on its eCommerce platforms;
• the mix of merchandise Walmart sells and its customers purchase;
• the availability of goods from suppliers and the cost of goods acquired from suppliers;
• the effectiveness of the implementation and operation of Walmart’s strategies, plans, programs and initiatives;
• Walmart’s ability to successfully integrate acquired businesses, including within the eCommerce space;
• the amount of shrinkage Walmart experiences;
• consumer acceptance of and response to Walmart’s stores and clubs, digital platforms, programs, merchandise offerings and delivery methods;
• Walmart’s gross profit margins, including pharmacy margins and margins of other product categories;
• the selling prices of gasoline and diesel fuel;
• disruption of seasonal buying patterns in Walmart’s markets;
• Walmart’s expenditures for Foreign Corrupt Practices Act (“FCPA”) and other compliance-related matters including the adequacy of our accrual for the

FCPA matter;
• disruptions in Walmart’s supply chain;
• cybersecurity events affecting Walmart and related costs and impact of any disruption in business;
• Walmart’s labor costs, including healthcare and other benefit costs;
• Walmart’s casualty and accident-related costs and insurance costs;
• the size of and turnover in Walmart’s workforce and the number of associates at various pay levels within that workforce;
• the availability of necessary personnel to staff Walmart’s stores, clubs and other facilities;

5

• unexpected changes in Walmart’s objectives and plans;
• developments in, and the outcome of, legal and regulatory proceedings and investigations to which Walmart is a party or is subject, and the liabilities,

obligations and expenses, if any, that Walmart may incur in connection therewith;
• changes in the credit ratings assigned to the Company’s commercial paper and debt securities by credit rating agencies;
• Walmart’s effective tax rate; and
• unanticipated changes in accounting judgments and estimates;

Regulatory and Other Factors
• changes in existing tax, labor and other laws and changes in tax rates, including the enactment of laws and the adoption and interpretation of

administrative rules and regulations;
• adoption or creation of new, and modification of existing, governmental policies, programs and initiatives in the markets in which Walmart operates and

elsewhere and actions with respect to such policies, programs and initiatives;
• the possibility of the imposition of new taxes on imports and new tariffs and trade restrictions and changes in tariff rates and trade restrictions;
• changes in currency control laws;
• changes in the level of public assistance payments;
• the timing of federal income tax refunds;
• natural disasters, public health emergencies, civil disturbances, and terrorist attacks; and
• changes in generally accepted accounting principles in the United States.

We typically earn a disproportionate part of our annual operating income in the fourth quarter as a result of seasonal buying patterns, which patterns are difficult to
forecast with certainty and can be affected by many factors.

Other Risk Factors; No Duty to Update
The above list of factors that may affect the estimates and expectations discussed in or implied or contemplated by forward-looking statements we make or made on
our behalf is not exclusive. We are subject to other risks discussed under the caption “Item 1A. Risk Factors,” and that we may discuss in Management’s
Discussions and Analysis of Financial Condition and Results of Operations and in risks that may be discussed under “Part II, Item 1A. Risk Factors” and “Part I,
Item 2. Management’s Discussions and Analysis of Financial Condition and Results of Operations” appearing in our Quarterly Reports on Form 10-Q or may
otherwise be disclosed in our Quarterly Reports on Form 10-Q and other reports filed with the SEC. Investors and other readers are urged to consider all of these
risks, uncertainties and other factors carefully in evaluating our forward-looking statements.
The forward-looking statements that we make or are made by others on our behalf are based on our knowledge of our business and our operating environment and
assumptions that we believe to be or will believe to be reasonable when such forward-looking statements were or are made. As a consequence of the factors
described above, the other risks, uncertainties and factors we disclose below and in the other reports as mentioned above, other risks not known to us at this time,
changes in facts, assumptions not being realized or other circumstances, our actual results may differ materially from those discussed in or implied or contemplated
by our forward-looking statements. Consequently, this cautionary statement qualifies all forward-looking statements we make or that are made on our behalf,
including those made herein and incorporated by reference herein. We cannot assure you that the results or developments expected or anticipated by us will be
realized or, even if substantially realized, that those results or developments will result in the expected consequences for us or affect us, our business, our operations
or our operating results in the manner or to the extent we expect. We caution readers not to place undue reliance on such forward-looking statements, which speak
only as of their dates. We undertake no obligation to revise or update any of the forward-looking statements to reflect subsequent events or circumstances except to
the extent required by applicable law.

6

ITEM 1. BUSINESS

General
Walmart Inc. (“Walmart,” the “Company” or “we”) helps people around the world save money and live better – anytime and anywhere – in retail stores and through
eCommerce. Through innovation, we are striving to create a customer-centric experience that seamlessly integrates our eCommerce and retail stores in an omni-
channel offering that saves time for our customers. Each week, we serve nearly 270 million customers who visit our more than 11,700 stores and numerous
eCommerce websites under 65 banners in 28 countries.
Our strategy is to lead on price, invest to differentiate on access, be competitive on assortment and deliver a great experience. Leading on price is designed to earn
the trust of our customers every day by providing a broad assortment of quality merchandise and services at everyday low prices (“EDLP”). EDLP is our pricing
philosophy under which we price items at a low price every day so our customers trust that our prices will not change under frequent promotional activity. Price
leadership is core to who we are. Everyday low cost (“EDLC”) is our commitment to control expenses so those cost savings can be passed along to our customers.
Our omni-channel presence provides customers access to our broad assortment anytime and anywhere. We strive to give our customers and members a great digital
and physical shopping experience.
Our operations comprise three reportable segments: Walmart U.S., Walmart International and Sam’s Club. Our fiscal year ends on January 31 for our United States
(“U.S.”) and Canadian operations. We consolidate all other operations generally using a one-month lag and on a calendar year basis. Our discussion is as of and for
the fiscal years ended January 31, 2018 (“fiscal 2018 “), January 31, 2017 (“fiscal 2017 “) and January 31, 2016 (“fiscal 2016 “). During fiscal 2018 , we generated
total revenues of $500.3 billion , which was primarily comprised of net sales of $495.8 billion .
We maintain our principal offices at 702 S.W. 8th Street, Bentonville, Arkansas 72716, USA. Our common stock trades on the New York Stock Exchange under
the symbol “WMT.”

The Development of Our Company
Although Walmart was incorporated in Delaware in October 1969, the businesses conducted by our founders began in 1945 when Sam M. Walton opened a
franchise Ben Franklin variety store in Newport, Arkansas. In 1946, his brother, James L. Walton, opened a similar store in Versailles, Missouri. Until 1962, our
founders’ business was devoted entirely to the operation of variety stores. In that year, the first Wal-Mart Discount City, which was a discount store, opened in
Rogers, Arkansas. In 1983, we opened our first Sam’s Club, and in 1988, we opened our first supercenter. In 1998, we opened our first Neighborhood Market.
In 1991, we began our first international initiative when we entered into a joint venture in Mexico. Since then, our international presence has expanded and, as of
January 31, 2018 , our Walmart International segment conducted business in 27 countries.
In 2000, we began our first eCommerce initiative by creating walmart.com. That same year, we also created samsclub.com. Since then, our digital presence has
continued to grow. In 2007, walmart.com launched its Site to Store service, enabling customers to make a purchase online and pick up merchandise in stores. In
2016, we acquired jet.com in the U.S. and formed a strategic alliance with JD.com in China. Subsequent to the jet.com purchase, we have acquired several other
U.S. eCommerce entities. In 2017, walmart.com launched free two-day shipping on more than 2 million items and we created Store N o 8, a tech incubator with a
focus to drive commerce forward. These eCommerce efforts have led to omni-channel offerings in many markets, including over 1,100 “Online Grocery” pickup
locations in the U.S.

Information About Our Segments
The Company is engaged in the operation of retail, wholesale and other units, as well as eCommerce websites, located throughout the U.S., Africa, Argentina,
Brazil, Canada, Central America, Chile, China, India, Japan, Mexico and the United Kingdom. The Company’s operations are conducted in three reportable
segments: Walmart U.S., Walmart International and Sam’s Club. The Company defines its segments as those operations whose results the chief operating decision
maker (“CODM”) regularly reviews to analyze performance and allocate resources. The Company sells similar individual products and services in each of its
segments. It is impractical to segregate and identify revenues for each of these individual products and services.
Walmart U.S. is our largest segment and operates retail stores in all 50 states in the U.S., Washington D.C. and Puerto Rico, with three primary store formats, as
well as eCommerce. Walmart U.S. generated approximately 64% of our net sales in fiscal 2018 , and of our three segments, Walmart U.S. is the largest and has
historically had the highest gross profit as a percentage of net sales (“gross profit rate”). In addition, Walmart U.S. has historically contributed the greatest amount
to the Company’s net sales and operating income.
Walmart International consists of operations in 27 countries outside of the U.S. and is divided into three major categories: retail, wholesale and other. These
categories consist of many formats, including: supercenters, supermarkets, hypermarkets, warehouse clubs (including Sam’s Clubs) and cash & carry, as well as
eCommerce. Walmart International generated

7

approximately 24% of our fiscal 2018 net sales. The overall gross profit rate for Walmart International is lower than that of Walmart U.S. primarily because of its
merchandise mix. Walmart International is our second largest segment.
Sam’s Club consists of membership-only warehouse clubs and operates in 44 states in the U.S. and in Puerto Rico, as well as eCommerce. Sam’s Club accounted
for approximately 12% of our fiscal 2018 net sales. As a membership-only warehouse club, membership income is a significant component of the segment’s
operating income. Sam’s Club operates with a lower gross profit rate and lower operating expenses as a percentage of net sales than our other segments.
The Company measures the results of its segments using, among other measures, each segment’s net sales and operating income, which includes certain corporate
overhead allocations. From time to time, we revise the measurement of each segment’s operating income, including any corporate overhead allocations, as
determined by the information regularly reviewed by our CODM. When the measurement of a segment changes, previous period amounts and balances are
reclassified to be comparable to the current period’s presentation.

Walmart U.S. Segment
The Walmart U.S. segment is a mass merchandiser of consumer products, operating under the “Walmart,” “Wal-Mart” and “Walmart Neighborhood Market”
brands, as well as walmart.com and other eCommerce brands. The Walmart U.S. segment had net sales of $318.5 billion , $307.8 billion and $298.4 billion for
fiscal 2018 , 2017 and 2016 , respectively. During the most recent fiscal year, no single unit accounted for as much as 1% of total Company consolidated net sales.

Physical. Walmart U.S. operates retail stores in the U.S., including in all 50 states, Washington D.C. and Puerto Rico, with supercenters in 49 states, Washington
D.C. and Puerto Rico, discount stores in 41 states and Puerto Rico and Neighborhood Markets and other small store formats in 36 states, Washington D.C. and
Puerto Rico. The following table provides square footage details on each of our formats as of January 31, 2018 :

Minimum Square

Feet
Maximum Square

Feet
Average Square

Feet
Supercenters (general merchandise and grocery) 69,000 260,000 178,000
Discount stores (general merchandise and limited grocery) 30,000 206,000 105,000
Neighborhood Markets (1) (grocery) 28,000 65,000 42,000
(1) Excludes other small formats.

The following table provides the retail unit count and retail square feet by format for the fiscal years shown:

Supercenters Discount Stores

Fiscal Year Opened Closed Conversions (1) Total (2)
Square
Feet (2) Opened Closed Conversions (1) Total (2)

Square
Feet (2)

Balance forward 3,158 …

UNITED
STATES
SECURITIES
AND
EXCHANGE
COMMISSION

Washington,
D.C.
20549
___________________________________________

FORM
10-K
___________________________________________

ý Annual
report
pursuant
to
section
13
or
15(d)
of
the
Securities
Exchange
Act
of
1934

for the fiscal year ended January 31, 2019 , or

¨ Transition
report
pursuant
to
section
13
or
15(d)
of
the
Securities
Exchange
Act
of
1934

Commission file number 001-6991.
___________________________________________

WALMART
INC.
(Exact
name
of
registrant
as
specified
in
its
charter)

___________________________________________

Delaware 71-0415188
(State or other jurisdiction of
incorporation or organization)

(IRS Employer Identification No.)

702
S.W.
8th
Street

Bentonville,
Arkansas 72716
(Address of principal executive offices) (Zip Code)

Registrant’s
telephone
number,
including
area
code:
(479)
273-4000

Securities registered pursuant to Section 12(b) of the Act:

Title
of
each
class Name
of
each
exchange
on
which
registered

Common
Stock,
par
value
$0.10
per
share
1.900%
Notes
Due
2022
2.550%
Notes
Due
2026

New
York
Stock
Exchange
New
York
Stock
Exchange
New
York
Stock
Exchange

Securities registered pursuant to Section 12(g) of the Act: None
___________________________________________

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ý
No ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.
Yes ¨
No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days.
Yes ý
No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during
the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ý
No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of
“large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ý Accelerated Filer o
Non-Accelerated Filer o Smaller Reporting Company o
Emerging Growth Company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ¨
No ý

As o f July 31, 2018, the aggregate market value of the voting common stock of the registrant held by non-affiliates of the registrant, based on the closing sale price of those shares on the New York
Stock Exchange reported on July 31, 2018, was $126,810,267,035 . For the purposes of this disclosure only, the registrant has assumed that its directors, executive officers (as defined in Rule 3b-7 under
the Exchange Act) and the beneficial owners of 5% or more of the registrant’s outstanding common stock are the affiliates of the registrant.

The registrant had 2,869,684,230 shares of common stock outstanding as of March 26, 2019 .

DOCUMENTS
INCORPORATED
BY
REFERENCE

Document Parts
Into
Which
Incorporated

Portions of the registrant’s Proxy Statement for the Annual Meeting of Shareholders to be held June
5, 2019 (the “Proxy Statement”)

Part III

Walmart
Inc.
Form
10-K

For
the
Fiscal
Year
Ended
January
31,
2019

Table
of
Contents

Page
Part I
Item 1 Business 7
Item 1A Risk Factors 15
Item 1B Unresolved Staff Comments 23
Item 2 Properties 24
Item 3 Legal Proceedings 26
Item 4 Mine Safety Disclosures 27

Part II
Item 5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 28
Item 6 Selected Financial Data 29
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations 30
Item 7A Quantitative and Qualitative Disclosures About Market Risk 43
Item 8 Financial Statements and Supplementary Data 45
Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 79
Item 9A Controls and Procedures 79
Item 9B Other Information 80

Part III
Item 10 Directors, Executive Officers and Corporate Governance 81
Item 11 Executive Compensation 81
Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 81
Item 13 Certain Relationships and Related Transactions, and Director Independence 81
Item 14 Principal Accounting Fees and Services 81

Part IV
Item 15 Exhibits, Financial Statement Schedules 82
Item 16 Form 10-K Summary 82

Signatures 83
Exhibit Index 85

WALMART
INC.

ANNUAL
REPORT
ON
FORM
10-K
FOR
THE
FISCAL
YEAR
ENDED
JANUARY
31,
2019

All references in this Annual Report on Form 10-K, the information incorporated into this Annual Report on Form 10-K by reference to information in the Proxy Statement of Walmart Inc. for its
Annual Shareholders’ Meeting to be held on June 5, 2019 and in the exhibits to this Annual Report on Form 10-K to “Walmart Inc.,” “Wal-Mart Stores, Inc.,” “Walmart,” “the Company,” “our
Company,” “we,” “us” and “our” are to the Delaware corporation named “Wal-Mart Stores, Inc.” prior to February 1, 2018 and named “Walmart Inc.” commencing on February 1, 2018 and, except
where expressly noted otherwise or the context otherwise requires, that corporation’s consolidated subsidiaries.

PART
I
Cautionary
Statement
Regarding
Forward-Looking
Statements
This Annual Report on Form 10-K and other reports, statements, and information that Walmart Inc. (which individually or together with its subsidiaries, as the context otherwise requires, is referred to as
“we,” “Walmart” or the “Company”) has filed with or furnished to the Securities and Exchange Commission (“SEC”) or may file with or furnish to the SEC in the future, and prior or future public
announcements and presentations that we or our management have made or may make, include or may include, or incorporate or may incorporate by reference, statements that may be deemed to be
“forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Act”), that are intended to enjoy the protection of the safe harbor for forward-
looking statements provided by the Act.

Nature of Forward-Looking Statements
Such forward-looking statements are not statements of historical facts, but instead express our estimates or expectations for our consolidated, or one of our segment’s, economic performance or results of
operations for future periods or as of future dates or events or developments that may occur in the future or discuss our plans, objectives or goals. These forward-looking statements relate to:

• the growth of our business or change in our competitive position in the future or in or over particular periods;
• the amount, number, growth, increase, reduction or decrease in or over certain periods, of or in certain financial items or measures or operating measures, including our earnings per share,

including as adjusted for certain items, net sales, comparable store and club sales, our Walmart U.S. operating segment’s eCommerce sales, liabilities, expenses of certain categories, expense
leverage, returns, capital and operating investments or expenditures of particular types, new store openings and investments in particular formats;

• investments and capital expenditures we will make and how certain of those investments and capital expenditures are expected to be financed;
• our increasing investments in eCommerce, technology, store remodels and other omni-channel customer initiatives, such as grocery pickup and delivery;
• volatility in currency exchange rates and fuel prices affecting our or one of our segments’ results of operations;
• the Company continuing to provide returns to shareholders through share repurchases and dividends, the use of share repurchase authorization over a certain period or the source of funding of a

certain portion of our share repurchases;
• our sources of liquidity, including our cash, continuing to be adequate or sufficient to fund and finance our operations, expansion activities, dividends and share repurchases, to meet our cash

needs and to fund our operations;
• the insignificance of ineffective hedges; and reclassification of amounts related to our derivatives;
• our effective tax rate for certain periods and the realization of certain net deferred tax assets and the effects of resolutions of tax-related matters;
• the effect of adverse decisions in, or settlement of, litigation or other proceedings or investigations to which we are subject;
• the effect on the Company’s results of operations or financial condition of the Company’s adoption of certain new, or amendments to existing, accounting standards; or
• our commitments, intentions, plans or goals related to the sustainability of our environment and supply chains, the promotion of economic opportunity or other societal initiatives.

Our forward-looking statements may also include statements of our strategies, plans and objectives for our operations, including areas of future focus in our operations, and the assumptions underlying
any of the forward-looking statements we make. The forward-looking statements we make can typically be identified by the use therein of words and phrases such as “aim,” “anticipate,” “believe,”
“could be,” “could increase,” “could occur,” “could result,” “continue,” “estimate,” “expansion,” “expect,” “expectation,” “expected to be,” “focus,” “forecast,” “goal,” “grow,” “guidance,” “intend,”
“invest,” “is expected,” “may continue,” “may fluctuate,” “may grow,” “may impact,” “may result,” “objective,” “plan,” “priority,” “project,” “strategy,” “to be,” “we’ll,” “we will,” “will add,” “will
allow,” “will be,” “will benefit,” “will change,” “will come in at,” “will continue,”

4

“will decrease,” “will grow,” “will have,” “will impact,” “will include,” “will increase,” “will open,” “will remain,” “will result,” “will stay,” “will strengthen,” “would be,” “would decrease” and “would
increase,” variations of such words or phrases, other phrases commencing with the word “will” or similar words and phrases denoting anticipated or expected occurrences or results.

Risks Factors and Uncertainties Affecting Our Business
Our business operations are subject to numerous risks, factors and uncertainties, domestically and internationally, outside of our control. One, or a combination, of these risks, factors and uncertainties
could materially affect any of those matters as to which we have made forward-looking statements and cause our actual results or an actual event or occurrence to differ materially from those results or
an event or occurrence described in a forward-looking statement. These risks, factors and uncertainties, which may be global in their effect or affect only some of the markets in which we operate and
which may affect us on a consolidated basis or affect only some of our reportable segments, include, but are not limited to:
Economic Factors

• economic, geo-political, capital markets and business conditions, trends and events around the world and in the markets in which Walmart operates;
• currency exchange rate fluctuations;
• changes in market rates of interest;
• changes in market levels of wages;
• changes in the size of various markets, including eCommerce markets;
• unemployment levels;
• inflation or deflation, generally and in certain product categories;
• transportation, energy and utility costs;
• commodity prices, including the prices of oil and natural gas;
• consumer confidence, disposable income, credit availability, spending levels, shopping patterns, debt levels, and demand for certain merchandise;
• trends in consumer shopping habits around the world and in the markets in which Walmart operates;
• consumer enrollment in health and drug insurance programs and such programs’ reimbursement rates and drug formularies; and
• initiatives of competitors, competitors’ entry into and expansion in Walmart’s markets, and competitive pressures;

Operating Factors
• the amount of Walmart’s net sales and operating expenses denominated in U.S. dollar and various foreign currencies;
• the financial performance of Walmart and each of its segments, including the amounts of Walmart’s cash flow during various periods;
• customer traffic and average ticket in Walmart’s stores and clubs and on its eCommerce platforms;
• the mix of merchandise Walmart sells and its customers purchase;
• the availability of goods from suppliers and the cost of goods acquired from suppliers;
• the effectiveness of the implementation and operation of Walmart’s strategies, plans, programs and initiatives;
• Walmart’s ability to successfully integrate acquired businesses, including within the eCommerce space;
• unexpected changes in Walmart’s objectives and plans;
• the amount of shrinkage Walmart experiences;
• consumer acceptance of and response to Walmart’s stores and clubs, eCommerce platforms, programs, merchandise offerings and delivery methods;
• Walmart’s gross profit margins, including pharmacy margins and margins of other product categories;
• the selling prices of gasoline and diesel fuel;
• disruption of seasonal buying patterns in Walmart’s markets;
• Walmart’s expenditures for Foreign Corrupt Practices Act (“FCPA”) and other compliance-related matters including the adequacy of our accrual for our FCPA matter;
• disruptions in Walmart’s supply chain;
• cybersecurity events affecting Walmart and related costs and impact of any disruption in business;
• Walmart’s labor costs, including healthcare and other benefit costs;
• Walmart’s casualty and accident-related costs and insurance costs;
• the size of and turnover in Walmart’s workforce and the number of associates at various pay levels within that workforce;
• the availability of necessary personnel to staff Walmart’s stores, clubs and other facilities;
• developments in, and the outcome of, legal and regulatory proceedings and investigations to which Walmart is a party or is subject, and the liabilities, obligations and expenses, if any, that

Walmart may incur in connection therewith;
• changes in the credit ratings assigned to the Company’s commercial paper and debt securities by credit rating agencies;
• Walmart’s effective tax rate; and
• unanticipated changes in accounting judgments and estimates;

5

Regulatory and Other Factors
• changes in existing tax, labor and other laws and changes in tax rates, including the enactment of laws and the adoption and interpretation of administrative rules and regulations;
• the imposition of new taxes on imports and new tariffs and changes in existing tariff rates;
• the imposition of new trade restrictions and changes in existing trade restrictions;
• adoption or creation of new, and modification of existing, governmental policies, programs and initiatives in the markets in which Walmart operates and elsewhere and actions with respect to

such policies, programs and initiatives;
• changes in currency control laws;
• changes in the level of public assistance payments;
• one or more prolonged federal government shutdowns;
• the timing and amount of federal income tax refunds;
• natural disasters, public health emergencies, civil disturbances, and terrorist attacks; and
• changes in generally accepted accounting principles in the United States.

We typically earn a disproportionate part of our annual operating income in the fourth quarter as a result of seasonal buying patterns, which patterns are difficult to forecast with certainty and can be
affected by many factors.

Other Risk Factors; No Duty to Update
The above list of factors that may affect the estimates and expectations discussed in or implied or contemplated by forward-looking statements we make or are made on our behalf is not exclusive. We
are subject to other risks discussed under “Part I, Item 1A. Risk Factors,” and that we may discuss in Management’s Discussions and Analysis of Financial Condition and Results of Operations under
“Part II, Item 5,” and in risks that may be discussed under “Part II, Item 1A. Risk Factors” and “Part I, Item 2. Management’s Discussions and Analysis of Financial Condition and Results of Operations”
appearing in our Quarterly Reports on Form 10-Q or may otherwise be disclosed in our Quarterly Reports on Form 10-Q and other reports filed with the SEC. Investors and other readers are urged to
consider all of these risks, uncertainties and other factors carefully in evaluating our forward-looking statements.
The forward-looking statements that we make or that are made by others on our behalf are based on our knowledge of our business and our operating environment and assumptions that we believe to be
or will believe to be reasonable when such forward-looking statements were or are made. As a consequence of the factors described above, the other risks, uncertainties and factors we disclose below
and in the other reports as mentioned above, other risks not known to us at this time, changes in facts, assumptions not being realized or other circumstances, our actual results may differ materially from
those discussed in or implied or contemplated by our forward-looking statements. Consequently, this cautionary statement qualifies all forward-looking statements we make or that are made on our
behalf, including those made herein and incorporated by reference herein. We cannot assure you that the results or developments expected or anticipated by us will be realized or, even if substantially
realized, that those results or developments will result in the expected consequences for us or affect us, our business, our operations or our operating results in the manner or to the extent we expect. We
caution readers not to place undue reliance on such forward-looking statements, which speak only as of their dates. We undertake no obligation to revise or update any of the forward-looking statements
to reflect subsequent events or circumstances except to the extent required by applicable law.

6

ITEM
1. BUSINESS

General
Walmart Inc. (“Walmart,” the “Company” or “we”) helps people around the world save money and live better – anytime and anywhere – by providing the opportunity to shop in retail stores and through
eCommerce. Through innovation, we strive to continuously improve a customer-centric experience that seamlessly integrates our eCommerce and retail stores in an omni-channel offering that saves
time for our customers. Each week, we serve nearly 275 million customers who visit our more than 11,300 stores and numerous eCommerce websites under 58 banners in 27 countries.
Our strategy is to make every day easier for busy families, operate with discipline, sharpen our culture and become digital, and make trust a competitive advantage. Making life easier for busy families
includes our commitment to price leadership, which has been and will remain a cornerstone of our business, as well as increasing convenience to save our customers time. By leading on price, we earn
the trust of our customers every day by providing a broad assortment of quality merchandise and services at everyday low prices (“EDLP”). EDLP is our pricing philosophy under which we price items
at a low price every day so our customers trust that our prices will not change under frequent promotional activity. Everyday low cost (“EDLC”) is our commitment to control expenses so our cost
savings can be passed along to our customers.
Our operations comprise three reportable segments: Walmart U.S., Walmart International and Sam’s Club. Our fiscal year ends on January 31 for our United States (“U.S.”) and Canadian operations. We
consolidate all other operations generally using a one-month lag and on a calendar year basis. Our discussion is as of and for the fiscal years ended January 31, 2019 (“fiscal 2019 “), January 31, 2018
(“fiscal 2018 “) and January 31, 2017 (“fiscal 2017 “). During fiscal 2019 , we generated total revenues of $514.4 billion , which was primarily comprised of net sales of $510.3 billion .
We maintain our principal offices at 702 S.W. 8th Street, Bentonville, Arkansas 72716, USA. Our common stock trades on the New York Stock Exchange under the symbol “WMT.”

The
Development
of
Our
Company
Although Walmart was incorporated in Delaware in October 1969, the businesses conducted by our founders began in 1945 when Sam M. Walton opened a franchise Ben Franklin variety store in
Newport, Arkansas. In 1946, his brother, James L. Walton, opened a similar store in Versailles, Missouri. Until 1962, our founders’ business was devoted entirely to the operation of variety stores. In that
year, the first Wal-Mart Discount City, which was a discount store, opened in Rogers, Arkansas. In 1983, we opened our first Sam’s Club, and in 1988, we opened our first supercenter. In 1998, we
opened our first Walmart Neighborhood Market. In 1991, we began our first international initiative when we entered into a joint venture in Mexico. Since then, our international presence has expanded
and, as of January 31, 2019 , our Walmart International segment conducted business in 26 countries.
In 2000, we began our first eCommerce initiative by creating walmart.com. That same year, we also created samsclub.com. Since then, our eCommerce presence has continued to grow. In 2007,
leveraging our physical stores, walmart.com launched its Site to Store service, enabling customers to make a purchase online and pick up merchandise in stores. In 2016, we acquired jet.com in the U.S.
and formed a strategic alliance with JD.com in China. Since the jet.com purchase, we have continued to expand our U.S. eCommerce capabilities through acquisitions including Shoes.com, Moosejaw,
Bonobos and other digital consumer brands. In 2017, walmart.com launched free two-day shipping on more than 2 million items and we created Store N o 8, a technology incubator with a focus to drive
commerce forward. In fiscal 2019, we acquired a majority stake of Flipkart Private Limited (“Flipkart”), an Indian-based eCommerce marketplace , with an ecosystem that includes eCommerce
platforms of Flipkart, Myntra and Jabong. In the U.S., we added more grocery pickup and delivery locations and as of January 31, 2019, we offered grocery pickup at more than 2,100 locations and
grocery delivery at nearly 800 locations. Our eCommerce efforts and innovation have led to omni-channel offerings in many of our markets. We are building an ecosystem with our omni-channel
capabilities, stores, services, eCommerce sites, supply chain and more than 2.2 million associates to better serve our customers.

Information
About
Our
Segments
We are engaged in global operations of retail, wholesale and other units, as well as eCommerce, located throughout the U.S., Africa, Argentina, Canada, Central America, Chile, China, India, Japan,
Mexico and the United Kingdom, as well as Brazil prior to the sale of the majority stake of Walmart Brazil discussed in Note 13 to our Consolidated Financial Statements. Our operations are conducted
in three reportable segments: Walmart U.S., Walmart International and Sam’s Club. We define our segments as those operations whose results the chief operating decision maker (“CODM”) regularly
reviews to analyze performance and allocate resources. Each of our segments contributes to the Company’s operating results differently. Each, however, has generally maintained a consistent
contribution rate to the Company’s net sales and operating income in recent years other than minor changes to the contribution rate for the Walmart International segment due to fluctuations in currency
exchange rates. We sell similar individual products and services in each of our segments. It is impractical to segregate and identify revenues for each of these individual products and services.

7

We measure the results of our segments using, among other measures, each segment’s net sales and operating income, which includes certain corporate overhead allocations. From time to time, we revise
the measurement of each segment’s operating income, including any corporate overhead allocations, as determined by the information regularly reviewed by our CODM. When the measurement of a
segment changes, previous period amounts and balances are reclassified to be comparable to the current period’s presentation. In fiscal 2019, we revised certain of our corporate overhead allocations to
the operating segments and, accordingly, revised prior period amounts for comparability.

Walmart
U.S.
Segment
Walmart U.S. is our largest segment and operates in the U.S., including in all 50 states, Washington D.C. and Puerto Rico. Walmart U.S. is a mass merchandiser of consumer products, operating under
the “Walmart” and “Walmart Neighborhood Market” brands, as well as walmart.com, jet.com and other eCommerce brands. Walmart U.S. had net sales of $331.7 billion for fiscal 2019 , representing
65% of our fiscal 2019 consolidated net sales, and had net sales of $318.5 billion and $307.8 billion for fiscal 2018 and 2017 , respectively. Of our three segments, Walmart U.S. has historically had the
highest gross profit as a percentage of net sales (“gross profit rate”). In addition, Walmart U.S. has historically contributed the greatest amount to the Company’s net sales and operating income.

Omni-channel.
Walmart U.S. provides an omni-channel experience to customers, integrating retail stores and eCommerce , through services such as “Walmart Pickup,” “Pickup Today”, “Grocery
Pickup”, “Grocery Delivery,” and “Endless Aisle.” As of January 31, 2019, we had over 2,100 Grocery Pickup locations and nearly 800 Grocery Delivery locations. Our eCommerce websites include
walmart.com, jet.com and others. The following table provides the approximate size of our retail stores as of January 31, 2019 :

Minimum
Square
Feet Maximum
Square
Feet Average
Square
Feet
Supercenters (general merchandise and grocery) 69,000 260,000 178,000
Discount stores (general merchandise and limited grocery) 30,000 206,000 105,000
Neighborhood markets (1) (grocery) 28,000 65,000 42,000
(1) Excludes other small formats.

The following table provides the retail unit count and retail square feet by format for the fiscal years shown:

Supercenters Discount
Stores

Fiscal
Year Opened Closed Conversions
(1) Total
(2)
Square
Feet
(2) Opened Closed Conversions
(1) Total
(2)

Square
Feet
(2)

Balance forward 3,288 589,858 508 53,496
2015 79 — 40 3,407 607,415 2 — (40) 470 49,327
2016 55 (16) 19 3,465 616,428 — (9) (19) 442 45,991
2017 38 (2) 21 3,522 625,930 — (6) (21) 415 43,347
2018 30 — 9 3,561 632,479 — (6) (9) 400 41,926
2019 6 (2) 5 3,570 634,198 1 (10) (5) 386 40,626

Neighborhood
Markets
and
Other
Small
Formats Total
Segment

Fiscal
Year
Opened
and
acquired

(3) Closed Conversions
(1) Total
(2)

Square
Feet
(2)

Opened
and
acquired
(3)(4) Closed Total
(2)

Square
Feet
(2)

Balance …

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