Wal-Mart Q1 Net Income Up 14% on 9.7% Sales Increase

Wal-Mart Stores, Inc. reported total sales for the quarter ended April 30, 2003 were $56.718 billion, an increase of 9.7 percent over the similar prior year quarter. Net income for the quarter was $1.861 billion, a 14.1 percent increase from the $1.631 billion reported in the similar prior year quarter. Earnings per share were $0.42 up from the $0.37 per share reported in the same prior year quarter.

These results include the effect of adopting Emerging Issues Task Force Consensus No. 02-16 (EITF 02-16), on accounting for money received from suppliers, which reduced first-quarter 2004 earnings by approximately $101 million after tax ($0.02 per share).

On May 2, 2003, Wal-Mart Stores, Inc. announced that it had entered into an agreement to sell McLane Company, Inc. (“McLane”), a wholly owned subsidiary. The sales amounts disclosed above do not include McLane sales for the comparative periods. If McLane sales were included, the sales increase would be 9.1 percent for the quarter.

Lee Scott, President and CEO said, “I am pleased that our associates achieved record net income of almost $1.9 billion. This was a 14.1 percent increase from the similar prior year period. The Wal-Mart Stores division had another good performance, the SAM’s CLUBS showed significant improvement, and our best performance for the quarter came from our international division.”

                       Quarter Ended Apr. 30   Percent 
                         2003        2002      Change
    Wal-Mart          $ 38.618     $35.418      9.0 %
    SAM's CLUB           7.822       7.295      7.2 %
    International       10.278       8.992     14.3 %
    Total Company     $ 56.718     $51.705      9.7 %
                      (Dollars in billions)

Total Company comparable sales for the quarter were up 2.2 percent. This is represented by a 2.1 percent comp increase for the Wal-Mart stores and a 2.2 percent comp increase for SAM’s.

For the first quarter, the Wal-Mart Stores segment, including Supercenters, had operating profit (profit before interest, unallocated corporate expenses, and income taxes) of $2.752 billion, an increase of 8.1 percent compared with $2.545 billion for the similar period in the previous year. The increase in operating profit of the Wal-Mart Stores segment includes a $51 million segment effect of adopting EITF 02-16. Had accounting for money received from suppliers been applied in the same manner as the previous year, operating profit of the Wal-Mart segment would have been $2.803 billion, or an increase of 10.1 percent.

The SAM’s CLUB segment had an operating profit for the quarter of $204 million, a decrease of 5.6 percent compared with $216 million for the similar period in the previous year. The decrease in operating profit includes a $36 million effect of adopting EITF 02-16. Had accounting for money received from suppliers been applied in the same manner as the previous year, SAM’s CLUB operating profit would have been $240 million, or an 11.1 percent increase.

The International segment had an operating profit of $384 million for the most recent quarter, an increase of 13.3 percent compared with $339 million for the similar period in the previous year. The increase in operating profit includes a $67 million effect of adopting EITF 02-16. Had accounting for money received from suppliers been applied in the same manner as the previous year, operating profit for the International segment would have been $451 million, or an increase of 33.0 percent.

                   WAL-MART STORES, INC., AND SUBSIDIARIES
                      Consolidated Statements of Income
                                 (Unaudited)
                 (Amounts in millions except per share data)

                                         Quarter Ended April 30,
                                   2003   % to Sales      2002     %to Sales

    Net sales                   $ 56,718    100.00%     $ 51,705    100.00%
    Other income-net                 506      0.89%          421      0.81%
                                  57,224    100.89%       52,126    100.81%

    Cost of sales                 43,918     77.43%       40,136     77.62%

    Operating, selling,
     and general and
     administrative expenses      10,216     18.01%        9,201     17.80%

    Interest costs:
       Debt                          175      0.31%          223      0.43%
       Capital leases                 75      0.13%           65      0.13%
       Interest income               (38)    (0.07%)         (36)    (0.07%)
                                     212      0.37%          252      0.49%

    Income from continuing
     operations before income
     taxes and minority interest   2,878      5.07%        2,537      4.91%

    Provision for income taxes     1,006      1.77%          900      1.74%

    Income from continuing
     operations before minority
     interest                      1,872      3.30%        1,637      3.17%

    Minority interest                (42)    (0.07%)         (41)    (0.08%)

    Income from continuing
     operations after minority
     interest and taxes         $  1,830      3.23%     $  1,596      3.08%
    Income from discontinued
     operation                        31      0.05%           35      0.07%

    Net Income                  $  1,861      3.28%     $  1,631      3.15%