Company Will Eliminate Walmart Express Format in US and Close Many Underperforming Latin American Stores

• Walmart announced that it will close 269 stores in the US and in various international markets. This represents less than 1% of global square footage and revenue. Walmart has almost 11,600 stores worldwide. In October 2015, the company said it was actively reviewing its store portfolio.
• The company will close 154 locations in the US, including all 102 of its Walmart Express outlets, its smallest-format stores, which had been in pilot since 2011. In addition, 23 Neighborhood Markets, 12 Supercenters, seven stores in Puerto Rico, six discount centers and four Sam’s Clubs will be closed.
• With the closure of the Express format, Walmart will narrow its focus and work on strengthening its Supercenters, optimizing its Neighborhood Markets, growing its e-commerce business and expanding pickup services for customers.
• Outside the US, the company will close 115 stores, including 60 recently closed stores in Brazil that were operating at a loss and represented less than 5% of sales in that market. In addition, 55 other stores that are operating at a loss in other Latin American markets will also be closed.
• More than 95% of the closed stores in the US are within 10 miles, on average, of another Walmart.
• In total, approximately 16,000 associates will be impacted by the decision, about 10,000 of them in the US.
• The financial impact of the store closures on EPS is estimated to be approximately $0.20–$0.22, with an impact of roughly $0.19–$0.20 expected in the fourth quarter of fiscal year 2016. The remainder of the impact will fall into the first half of fiscal 2017. Approximately 75% of the impact will relate to US closings. The remaining portion will involve Walmart International, with a majority of the international impact relating to the closures in Brazil. The estimated financial impact is not included in the company’s fiscal 2016 fourth-quarter and full-year earnings guidance.
• Despite this announcement, Walmart plans to open additional stores in its next fiscal year (which begins February 1, 2016). In the US, the company plans to open 50–60 Supercenters and 85–95 Neighborhood Markets. Sam’s Club plans to open 7–10 new locations. Internationally, Walmart plans to open 200–240 stores during the coming year.