Walmart Inc. (WMT) Earnings Call Transcript & Summary

Hello, and welcome to the Annual Shareholders' Meeting of Walmart Inc. Please note that the meeting is being recorded. [Operator Instructions] Walmart would like to remind you that some of the comments today may contain forward-looking statements. Additional information about this is included among the meeting materials available on your screen. It is now my pleasure to turn the meeting over.

Thank you, and good morning, everyone. We appreciate you joining today's meeting, which is our second virtual shareholders' meeting. I'm Greg Penner. It's my honor as Chair of the Walmart Board of Directors to welcome you and formally open our 51st Annual Shareholders' Meeting. The last 18 months have been unprecedented, and it's been amazing to see our people not miss a beat in serving our customers and communities. I am so proud of what they all have accomplished throughout this incredibly challenging time. I also want to recognize and thank Doug and his leadership team. They rose to the challenge and led this business through a global health crisis, social unrest and political divisiveness. While the situation has improved here in the U.S., many people, including our associates in other parts of the world such as India, are still dealing with a severe health crisis, and we'll continue to look for ways to support them. All the members of our Board of Directors have joined our virtual meeting. Also joining online are representatives from Ernst & Young, Walmart's independent accountants. The inspectors of election today are from Broadridge Financial Solutions. Based on their report, a majority of the shareholders entitled to participate in the meeting are represented online. We have a quorum and may proceed with the business portion of the meeting. Therefore, our meeting is officially called to order. It is now 10:32 a.m. The polls are open and will close after the presentation of the last shareholder proposal. Only shareholders who held shares as of the record date for this meeting are entitled to vote shares. If you have already voted your shares, there is no need to vote again, unless you wish to change your vote. If you would like to change your shares or change your vote, you may do so while the polls are open by following the instructions on your screen. Now I would like to acknowledge the director nominees, including myself, who are up for reelection this year. They are Cesar Conde, Tim Flynn, Sarah Friar, Carla Harris, Tom Horton, Marissa Mayer, Doug McMillon, Steve Reinemund, Rob Walton and Steuart Walton. I'm also excited to introduce one new independent member of the Board who is standing for election for the first time, Randall Stephenson. Randall is the retired Executive Chair and CEO of AT&T. We're incredibly fortunate to have him as part of our company, and we value the contributions he's already making. Thank you, Randall, and thank you to all of our Board members for your willingness to continue to serve our company. Next, I have asked Walmart President and CEO, Doug McMillon, to share an update on the company's priorities. Then I've asked Rachel Brand, our Corporate Secretary, to take us through the formal business of the meeting. Doug?

Thank you, Greg. Good morning, everyone, and thanks for your interest in our company. Our business is strong. During the last fiscal year, we generated record sales of $560 billion in constant currency. That's an increase of more than $40 billion in 1 year. We also saw record operating cash flow of $36 billion. We have a clear purpose and set of values, the people and the assets to succeed in the next-generation of retail, and we're building for that future. Our supercenters and Sam's Clubs are performing well. Our pickup and delivery businesses are scaling. Our global e-commerce business has grown from around 7.5% of sales during fiscal year 2020 to about 12.5% of sales last quarter. We're on track to reach more than $100 billion in e-commerce sales over the next couple of years. The company is transforming. During our investor conference in February, we described our investment priorities, including supply chain capacity and automation as well as investing in our people. Last fall, we announced wage increases for 165,000 associates. And this past February, we announced wage increases for an additional 425,000 associates. Several of our previous experiments with automation are now ready to scale. We'll add e-commerce fulfillment center capacity as well as invest in automation in our distribution centers and fulfillment centers, and we'll begin installing automated market fulfillment centers, leveraging our proximity to customers. We're building a new business model, and you can see it taking shape, especially in the U.S. and Mexico. This flywheel comes to life as our first-party e-commerce assortment and brands expand. Our marketplace grows rapidly. We build our fulfillment services business and our advertising income scales. We'll also continue to invest in the value proposition for Walmart+ to ensure a high Net Promoter Score. The world looks different than it did a year ago. There's still a degree of uncertainty, but there are good reasons for optimism. We've been executing 5 priorities that we use to guide our decision making and navigate the health and economic crises. Those priorities are to support the health and well-being of our associates, serve our customers by keeping the supply chain moving, help others that are impacted, manage the business well during the crisis given the risks and lastly, to advance our strategy despite the short-term challenges. To combat the pandemic, we put in place measures that enabled us to operate safely. This included a 3-tier leave policy with 2 of those tiers being paid leave, reduced operating hours, enhanced cleaning, installation of plexiglass at registers and in our pharmacies, customer metering and other efforts. We hired more than 500,000 new associates, which allowed us to serve our customers and members while also providing our associates the flexibility to take time off if they needed it. We're encouraged by the progress on vaccinations here in the U.S., but this pandemic isn't over. The past several weeks and months have been challenging in some countries. India, Canada, Chile and South Africa are priorities at the moment. In India, we provided oxygen concentrators, PPE and financial support. When it comes to helping people get vaccinated, all of our Walmart and Sam's Club pharmacies in the U.S. are administering vaccines, and we can provide them without an appointment. We've administered millions of doses. We're taking steps to encourage our associates and customers to become vaccinated. Given CDC guidance, our vaccinated associates can now work without a mask if they choose to, and we've added a cash incentive as an additional step to encourage vaccinations. Across the countries where we operate, we'll keep looking for more ways to make a difference. This pandemic won't be over until it's over for everyone. In addition to combating the pandemic, we've also continued our work to increase racial justice and equity. Our goal is to make a positive difference both within our company and beyond. Our percentage of African American and Black officers is increasing. Our transparency is up. We're now reporting in greater detail our diversity metrics twice a year. To date, 95% of our officers have participated in a 2-day racial equity workshop. We've partnered with McKinsey to deliver one of the most comprehensive studies on race in the workplace so that we can learn and hopefully influence other companies to learn and change, too. We've made progress with our Shared Value Networks, which are focused on addressing issues across 4 systems: criminal justice, health, education and finance. We've made a $5 million investment in North Carolina A&T State University to launch the Equity in Education Initiative, which represents the largest corporate investment in that school to date. And we launched the Supplier Inclusion Advisory Council, whose mission is to develop and grow an inclusive supply chain. At this time last year, we also announced that, along with the Walmart Foundation, we would invest $100 million to create a Center for Racial Equity. This center is up and running. And in February, we distributed the first set of grants totaling $14.3 million. Since then, we've also awarded grants in support of the Asian American and Pacific Islander community. As these various efforts were underway, we did not let up on the other areas that are important to us, including the support of U.S. manufacturing. Last quarter, we stepped up our commitment with a goal to purchase an additional $350 billion of items made, grown or assembled in the U.S. over the next 10 years. We estimate this commitment will create more than 750,000 new American jobs and avoid 100 million metric tons of CO2 emissions. We're also launching an initiative called American Lighthouses. Through this, we'll bring together partners from the supplier community, academia and government to identify and overcome top-down barriers to U.S. production. In September of 2020, we went further on our commitment to the environment by announcing our aspiration to become a regenerative company, regenerative means restoring, renewing and replenishing in addition to conserving. This is a holistic approach with aggressive targets, including zero emissions in our own operations by 2040 with no offsets, 100% renewable energy to power our facilities by 2035, electrifying our vehicles by 2040 and managing or restoring at least 50 million acres of land and 1 million square miles of ocean by 2030. As we've said before, these are not one-off projects we're working on. They are strategic and core to what we do. The best way to create a valuable company is to build for the long term, manage the short term and serve all relevant stakeholders. Walmart is doing that, and we'll continue to. We see many opportunities in front of us. Our associates are an inspiration. Since all these recent challenges began, we've witnessed courage, kindness and generosity from them. We've seen people come together and take action to bring about change and strengthen their communities. We know they'll continue to rise to any occasion. Thank you again for your interest in our company. Now please allow me to turn it over to Rachel Brand, our Corporate Secretary. She will take us through the presentation of the proposals.

Thank you, Doug. We will conduct this meeting in the same way we have conducted our previous shareholder meetings. We will address the formal business first, moving into a Q&A session after the meeting adjourns. The rules of conduct for the meeting are available on the virtual meeting site. Under those rules, each person presenting a shareholder proposal will have 3 minutes to present it. A chime will be played when there are 30 seconds remaining, and I will ask the presenter to conclude his or her remarks once the time has expired. Each presenter should keep his or her remarks limited to the topic of the proposal being presented. There are 8 matters to be brought before the meeting. Only those 8 items, if properly presented, will be voted on today. The first 3 items are the company proposals. They appear in the proxy statement as proposals 1 through 3. The first is the election of 12 directors. Information about each director nominee can be found in the proxy statement. The second proposal is a nonbinding advisory vote to approve the compensation of Walmart's named executive officers. The vote on this proposal is advisory, but the Board will consider the results in evaluating our executive compensation program. The third proposal is to ratify the appointment of Ernst & Young as the company's independent accountants for the fiscal year ending January 31, 2022. Now we'll move on to the shareholder proposals. The company's response to each one can be found in the proxy statement. I will recognize each presenter when it is his or her turn to speak for 3 minutes. The first shareholder proposal appeared as #4 in the proxy statement. It was submitted by the Employees' Retirement System of Rhode Island and another co-filer. Mr. Randall Rice will present it on behalf of the shareholder proponents. Operator, is Mr. Rice on the line?

Yes, ma'am, he is.

Thank you. Mr. Rice, you have 3 minutes.

Good morning. On behalf of Rhode Island Treasurer Seth Magaziner and the 60,000 members of our public employees pension system, I move our shareholder proposal, which requests that the Board prepare a report on our company's plan to reduce climate impacts of hydrofluorocarbons, HFC refrigerants released from our operations. HFCs are a class of commonly used refrigerants that are super pollutants and are conservatively estimated to have over 1,000x the global warming potential of carbon dioxide. They are found across Walmart's operations as a critical element in the refrigerators and cooling systems in stores, distribution centers and vehicles. In 2019 alone, Walmart reported over 3 million tons of HFC-related greenhouse gas emissions, which is roughly equal to the annual environmental impact of having 500,000 vehicles on the road, and it represents a 15% year-over-year increase. The company has stated a goal to transition to a low-impact refrigerant by 2040, but has given few details on how it will achieve the goal. We are faced with the State of California, where we have 300 stores, recently passing legislation requiring all new and significantly remodeled supermarket facilities to use ultra low-impact refrigerants. And last month, the EPA proposed a rule to phase down the production and consumption of HFCs by 85% over the next 15 years. In its opposition statement to our proposal, management says that it's focusing on preventing emissions by minimizing leaks, which is undoubtedly a prudent course of action. However, the company has not disclosed what the average leak rate is or how they will measure success in the prevention measures. We need to move forward with urgency and transparency. Without this disclosure, investors are left to evaluate Walmart's refrigerant performance based on recent increases in HFC emissions. Our proposal provides an opportunity to prepare for new regulations and stay on track to meet our company's climate goals, and we recommend a vote for proposal #4. Thank you.

Thank you, Mr. Rice. The Board recommends a vote against this proposal for the reasons explained in the proxy statement. The next proposal appeared as #5 in the proxy statement. It was submitted by Zevin Asset Management. Ms. Marcela Pinilla will present it on behalf of the shareholder proponent. Operator, is Ms. Pinilla on the line?

Yes, ma'am, she is.

Thank you. Ms. Pinilla, you have 3 minutes.

Thank you. Greetings, members of the Walmart Board, Walmart management and fellow shareholders. My name is Marcela Pinilla, and I am Director of Sustainable Investing at Zevin Asset Management. Our clients care about embedded efforts related to environmental, social, governance factors in their investments. I'm here today to address an important governance issue at Walmart and to formally move proposal #5 on the proxy ballot. Our proposal requests that Walmart disclose company policy and procedures governing direct and indirect lobbying and grassroots lobbying communications, including company payment amounts used for these activities, along with their recipients. We also request a description of how management and the Board decision-making process is like and oversight for making such payments just described. This proposal does not seek to limit Walmart's lobbying. The concern for investors and the reason we are requesting the above disclosures is that although Walmart has a large lobbying footprint, a complete picture of its spending to influence public policy, including payments to third-party groups and unreported grassroots lobbying is unavailable for shareholders. Corporate lobbying to influence laws and regulations affects all aspects of the economy, from climate change and health care to financial regulation, immigration and workers' rights. Companies are increasingly playing a public role on these issues. While there is nothing new about companies weighing in on public policy matters, doing so without evaluating impacts on society, along with business implications in today's world, may be riskier than ever. So we ask, how does Walmart evaluate its indirect lobbying activities against its public positions? Walmart deserves credit as a leader with its comprehensive disclosure of its state lobbying spending, yet shareholders currently face a blind spot on Walmart's undisclosed participation in and support for third-party groups, which lobby behind closed doors without accountability. In closing, without openness and transparency, corporate lobbying can be used to promote public policy objectives that could pose potential reputational risks for Walmart. Thank you.

Thank you, Ms. Pinilla. The Board recommends a vote against this proposal for the reasons explained in the proxy statement. The next proposal appeared as #6 in the proxy statement. It was submitted by the Franciscan Sisters of Perpetual Adoration and other co-filers. Sister Sue Ernster, representing the shareholder proponents, prerecorded her presentation of the proposal, which we will now play.

Good morning, Mr. Chairman, members of the Board and fellow shareholders. My name is Sister Susan Ernster. I am the Vice President and Treasurer of the Franciscan Sisters of Perpetual Adoration in La Crosse, Wisconsin, a longtime shareholder of Walmart. On behalf of my community and several other members of the Interfaith Center on Corporate Responsibility, I hereby move proposal #6, which requests that the Board of Directors oversee the preparation of a report to shareholders on whether and how Walmart's racial justice goals and commitments align with the starting pay for all classifications of Walmart associates. Our community's justice focus is at the intersection of racism and economic justice. In the years since the murder of George Floyd and our nation's awakening to racial justice and economic inequities, Walmart has taken positive and significant actions, as described in the company's opposition statement, increased percentage of full-time employees, enhanced benefits and training and wage increases, to name a few. The company has made steady progress employing people of color and increased philanthropic investments to advance racial equity. However, we believe more can and should be done to reduce the racial inequities and improve economic justice within our company. The company has identified workforce-related practices, including fair pay as part of Walmart's racial justice commitment. This proposal asks the Board to analyze starting wages to learn if they truly reflect the laudable goals set out by the Board. Ford Foundation President Darren Walker recently argued that paying a living wage is the best way to address racial inequality. Raising the pay of the workers at the bottom of your scale, he argued, would disproportionately help people of color. With nearly half of our hourly associates being people of color, it seems like raising wages is a sensible solution. Walmart's recent quarterly earnings report stated that our results reflect the continued hard work and commitment our associates have shown throughout the pandemic, yet Walmart's average hourly wages are just over $15 per hour. As people of faith, we don't feel comfortable benefiting from the company's record performance while so many of our associates must rely on government subsidies for food and health care. I want to end by saying that filing this proposal has forced my own community of catholic sisters to look in the mirror. It led us to raise our minimum starting wage to $15. We are all on this journey together. We urge all shareholders to vote for proposal #6. Thank you for allowing me to speak.

Thank you, Sister Ernster. The Board recommends a vote against this proposal for the reasons explained in the proxy statement. The next proposal appeared as #7 in the proxy statement. It was submitted by Cynthia Murray, who appointed Rev. William Barber to present it. Rev. Barber prerecorded his presentation of the proposal, which we will now play.

Good afternoon. I'm Bishop William J. Barber, II, here to speak on behalf of Walmart associate, Cynthia Murray, and to uplift the voices of millions of Walmart's employees who are living in poverty and low wages. I'm here joining with United for Respect because as we say in the Poor People's Campaign: A National Call for Moral Revival, forward together, not one step back, and everybody has a right to live. But there are hundreds of your workers who are not alive today because of this vicious coronavirus that was allowed to spread throughout your stores largely in secret as your workers feared for their lives every day. Perhaps thousands of your workers suffered with this disease, spread it to family members or had to endure terrifying isolation gasping for breath, all because they were too poor, too low wage to be able to stay home. We call people essential workers, but we treated them like they were expendable. That's why I stand with Walmart's 1.6 million workers as they introduce a resolution for a Pandemic Workforce Advisory Council. Be it resolved that shareholders of Walmart Inc. ask the Board of Directors to create a Pandemic Workforce Advisory Council. The council, composed of hourly associates, to provide advice to the Board, including any relevant Board Committee, upon request on pandemic-related workforce issues, including health and safety measures, whistleblower protection and paid sick leave. Walmart would have discretion to disband the council when no pandemic has been declared and not until. I stand with this associate, Cynthia Murray, and I stand with the millions of your workers, saying the time is now for this to be done. Do it because it's the right thing to do, the moral thing to do. It's the economic thing to do. It's the just thing to do. Thank you.

Thank you, Rev. Barber. The Board recommends a vote against this proposal for the reasons explained in the proxy statement. We will now move on to the final proposal, which appeared as #8 in the proxy statement. It was submitted by The National Center for Public Policy Research. Mr. Scott Shepard, representing the shareholder proponent, prerecorded his presentation of the proposal, which we will now play.

The Business Roundtable, a club for wealthy CEOs, declared in 2019 that it had redefined the corporate purpose. It said the purpose had shifted from the traditional and legally required rule of shareholder primacy to a new theory of stakeholder capitalism. Under it, CEOs and Boards of Directors would supposedly run the company for the benefit of all stakeholders, meaning for everyone. In theory, that sounds great. In fact, it creates mountains of trouble for shareholders and for all legitimate stakeholders. The key to these problems is that it's impossible for company executives, at Walmart or elsewhere, to make decisions that legitimately capture all stakeholder interests since stakeholders have diverging interests. We know that stakeholders, essentially everyone, don't seek the same goals because we know how profound our social, political and economic divisions, especially these days. There are just no decisions that honestly enact the will of all stakeholders. Even if there were, that's not what our CEO and company even attempt to do. The company does not poll all stakeholders, feed the results into some objective decision process and then enact the result. Instead, the Business Roundtable, which our CEO chairs, enabled shifting to stakeholder capitalism to allow CEOs and Boards of Directors to act like masters of the universe doing anything they wish. They would then post hoc ascribe their actions to some set of stakeholders who were said to have demanded exactly what they decided to do. That's how it's already working. Bank of America's CEO, Brian Moynihan, wrote a set of stakeholder capitalism metrics he wants all companies to adopt. They include no provisions for measuring real stakeholder preferences. Rather, they force compliance with Moynihan's preferred policies, like radical carbon reductions that will have no real-world effect given India and China's continuing carbon increases but will cost all of us dearly. BlackRock votes investor proxies to favor Larry Fink's private interest, not objectively measured stakeholder interest. The problem for shareholders is clear. Under current law, management must act in the objective best interest of shareholders. The new theory substitutes executive whim for shareholder interest. It also disadvantages all legitimate stakeholders. Their interests are best represented by decisions that make shareholder value, which is the long-term value of Walmart, primary. Employees, customers and communities want Walmart to survive forever, which requires keeping the company strong, paying appropriately and keeping long-term good relations with communities. Stakeholder capitalism would also create massive legal costs for Walmart since pronouncements by CEO lunch clubs don't change fiduciary duties. Shareholder primacy is the law. Acting otherwise will rightly create huge legal liability. Stakeholder capitalism is either a fraud or a massive mistake. Either way, Walmart should carefully consider all of its implications and consider stepping away. Vote yes on proposal #8.

Thank you, Mr. Shepard. The Board recommends a vote against this proposal for the reasons explained in the proxy statement. This concludes all the matters to be presented for shareholder consideration at the meeting. It is now 10:59 a.m. and the polls are now closed. Based on the initial report from the inspectors of election, the preliminary voting results are as follows. Each director nominee has been elected by a majority of the votes cast. Each of the other company proposals has passed and each shareholder proposal has failed to receive a majority of the votes cast. The preliminary voting results will be announced in a press release later today, and the official results will be disclosed in a filing with the SEC. The 2021 Annual Shareholders' Meeting is now formally adjourned. We will now pause briefly before moving into a Q&A session moderated by Dan Binder, Senior Vice President of Investor Relations.

Hello. I'm Dan Binder, Senior Vice President of Investor Relations. We will now take the next 30 minutes to respond to questions submitted through the virtual meeting platform. We will answer as many questions as we can in the time remaining. For relevant questions that could not be answered due to time constraints, the company will provide responses on the Investor Relations section of our corporate website as soon as possible. Substantially similar questions will be grouped together and responded to collectively. Okay. Our first question. I'm impressed and grateful for Walmart's recent stock performance. What efforts are being made to improve Walmart's decades-old image as a destination for low-income shoppers? Doug?

Joel, this is Doug McMillon. I'll jump in first and then ask Dan Bartlett to add any comments that he wants to add. Dan leads corporate affairs and other areas for the company. So obviously, our focus is, first and foremost, on strengthening the company, which includes our assortment so that we appeal to all kinds of customers. And Walmart.com gives us an opportunity to do that even more than the limited assortment we're able to carry in our stores, and I do think we've made progress on that front and that our reputation trails, in some cases, what we actually do to provide for customers of all different income levels. We think about our reputation and our brand, of course, all the time and try to make smart investments to strengthen those. On the website that you raise, in particular, that's not one that we control or influence, but we'll try to do a good job with the things that we do control.

Yes. I would just add that many of the things you talked about in your prepared remarks, Doug, are things that we're leaning into and telling the story about what we're doing on the sustainability front, how we are investing in American jobs and procuring products from the United States, a whole range of issues that we know that builds trust with our customers and improves our reputation. So we'll continue to lean into those efforts in the days ahead.

Great. The next question, does the company have a growth goal for its online sales each year?

Mark, this is Doug. Our thought is that we need to be where the customer wants us to be and serve them how they want us to. And it's been nice to see the momentum that we've got with our e-commerce business, both what we do through Walmart.com for things like general merchandise and also how we've leveraged our app and the delivery from supercenters and the pickup business from supercenters, which includes not only general merchandise, but food. So our goal really is focused on how we improve those offers. We focus on input metrics and consider the percentage of sales as a percent of e-commerce as being kind of an output metric. It's a result of what we do rather than having a specific target for that number.

Our next question, does Walmart as a publicly traded company intend to raise wages for all store-level employees to reflect a collaborative team effort among its team members and not just team, department and upper management?

Yes. Doug, again. If you look at our track record, we have been raising wages consistently for years now from under $9, to $9, to $10, to $11 is our lowest starting wage rate in the country, but we also want to make sure that we're moving the average, and we want to make sure that we're thinking about things like pay compression because we care a great deal about experience and our more tenured associates. So I think our track record would indicate that we do plan to continue raising wages over time as well as improving our health care offer. We just simply can't do everything at once.

Great. Thank you. The next question, would the company consider virtual access to future in-person shareholder meetings for those unable to attend?

Thanks for the question. It's Greg. In the last year, we've learned new ways of working as we've dealt with the pandemic, and that applies to our shareholder meeting as well. And so I think we'll consider this and other format going forward for our shareholder meetings. Thank you.

Our next question, how is Walmart adjusting the use of its utilities to lower expenses?

This is Doug. As we think about investments, we lean towards the long term. And there have been opportunities in the past, and I know there will be in the future for us to make investments in equipment, refrigeration comes to mind, for example, that may have a longer payback period, but does generate a good return over time and have the impact of improving the company's return on investment with that longer-term view. And so we manage line by line on the P&L what our expenses look like, but try to balance the long term with the short term.

Our next question, Walmart has invested effort in protecting associates and customers during COVID. However, we read reports of associates falling through the cracks of the protections and protocols that management has established. I assume diligence on Walmart's part. What would it take for Walmart to post a public scorecard on how stores are in compliance with the protections and protocols that management has established with updates on how stores improve when necessary?

Dacona Smith, I'll ask you to chime in here as well. Obviously, the safety of our associates is the priority, as I mentioned earlier. And what we've tried to do through this whole experience has been to implement every single good idea that we hear of, whether it comes from our associates in our stores and clubs or from health care advisers or others. And so we've listed all of the things that we've done. And having every store, every club, every distribution center, every fulfillment center execute against those things is a priority. And we manage that by visiting our stores, clubs, FCs and DCs on a surprise basis, looking at what's happening as well as other forms of communication back from our associates, and we monitor a number of metrics to make sure that, that's happening. We haven't really considered a public scorecard and that the energy it would take to have that be real-time might actually distract us from executing. Dacona, anything to add to that?

I think you answered it well, Doug. As you know, we have leaders all over the country that, to Doug's point, visit stores continuously to ensure associates have an avenue to speak in person or via phone, ethics hotline. However, they need to reach out to us if they feel they've been missed. But the unannounced visits are a big tool for us, but also just speaking to the associates and hearing their concerns through all channels has been a big help to us as well, Doug. So I think we do a good job of ensuring that all associates are treated fairly.

Our next question, with the Biden tax plans, will Walmart consider buying back more stock as opposed to increasing the dividend?

This is Brett Biggs. I'll take that question. As you would expect, we continue to monitor the implications of any potential tax changes. There are several regulations or potential regulations that came out even this week, and we continue to monitor those. And Congress will continue to consider those and debate those given the implications on business as well as shareholders. How we think about capital really doesn't change from the standpoint of, first, we look to grow the business. We're very committed to our dividend, which has been shown by the increase that we've made over the last several decades. And then, of course, share buybacks. So we'll continue to look at the implications of what that may mean for shareholders. We want to do what's right for the business, but also what's right for shareholders as we consider the implications of those tax changes.

Next question, when will all stores be using VizPick, the updated inventory management software?

For those of you that may not know, that's a visual pick tool that we're starting to use in Walmart U.S. Dacona, would you respond, please?

Yes. Almost all stores are active on it now. We are consistently and constantly updating the technology. But I would say within this fiscal year, probably by the end of the third quarter, all stores will be actively using the software to help with inventory management.

You can basically hold the device up in the backroom and it will visually indicate which cases need to go to the sales floor. So it's a really helpful tool to the associates, and I understand the enthusiasm.