Welcome to
the Walmart earnings call for the Q4 of fiscal year 2011. The date of this call is February 22, 2011. This call is the property of Walmart Stores Incorporated and intended solely for the use of Walmart shareholders. It should not be reproduced in any way. You may navigate through this call as follows.
Press 1 to rewind 10 seconds. Press 2 to pause, and press 8 to resume playing. Press 3 to fast forward 10 seconds. This call will contain statements that Walmart believes are forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended and intended to enjoy the protection of the Safe Harbor for forward looking statements provided by that act. These forward looking statements generally are identified by the use of the words or phrases Anticipate, are expecting, are forecasting, assume, believe, continue to expect, expect, expectations, guidance, Guiding, look forward, may affect, may contribute, our goal, plan, should begin, will allow, will be, We'll be extended, we'll change, we'll complete, we'll continue, we'll deliver, we'll grow, we'll have, we'll help, we'll improve, We'll invest, we'll leverage, we'll move forward, we'll not, we'll occur, we'll position, we'll provide, we'll reinforce, we'll step up and we'll support or a variation of one of those words or phrases in those statements or by the use of words and phrases of similar import.
Similarly, Descriptions of Walmart's objectives, plans, goals, targets or expectations are forward looking statements. The forward looking statements made in this call discuss, among other matters, Management's forecasts of Walmart's diluted earnings per share from continuing operations attributable to Walmart for the quarter ending April 30, 2011, and the year ending January 31, 2012. And the assumption underlying those forecasts that currency exchange rates will remain at current levels, The anticipated capital expenditures Walmart and by each of its operating segments in fiscal 2012, the anticipated growth in square footage and in new, Expanded and relocated stores and clubs for Walmart as a whole and for its operating segments in fiscal 2012, The anticipated comparable store sales of the Walmart U. S. Operating segment and comparable club sales of the Sam's Club operating segment for the 18 week period ending April 29, 2011, and the anticipated effective tax rate for fiscal 2012.
Quarterly fluctuations in that tax rate and factors that will affect that tax rate. The forward looking statements also include statements that discuss management's expectations That Walmart will continue to address headwinds, such as inflation and higher prices, that Walmart will not waver in its commitment to its customers, that Walmart will grow sales and increase comparable store sales that Walmart will continue to maximize returns to its shareholders through dividends, share repurchase and a stable return on investment. That if opportunities to invest in emerging markets arise, Walmart will do so. That Walmart will continue to leverage its operating expenses through the productivity loop, that Walmart will continue to add square footage in new formats, that the conversion of Walmart's financial systems to SAP will provide Walmart a common platform to better integrate acquisitions in the future. The planned investments in globalecommerce will be reflected in unallocated corporate overhead and may contribute to growth of its unallocated corporate expenses.
The quarterly fluctuations in ROI will occur based on Walmart's operations. Concerning Walmart's mid- to long term goal to maintain a stable ROI, that leveraging expenses will continue to be an important focal point for Walmart in fiscal 2012 and that Walmart will continue to focus on leveraging its cost structure and global footprint along with driving the right balance between growth and returns. Those forward looking statements also Management's expectations that the Walmart U. S. Segment will reinforce its commitment to deliver everyday low price, deliver a merchandise assortment and presentation relevant to its customers continue to grow through supercenters and additional formats Move forward with even greater urgency in opening small stores, complete the segment's new modular sets in the Q1 of fiscal 2012, have integrated targeted plans to present a more compelling presentation and product offering for its customers of seasonal merchandise for certain holidays, Work throughout fiscal 2012 on reassorting its general merchandise categories, adding back deleted items and categories and making space allocation changes, make meaningful progress on growth as it expands its store format portfolio to continue to grow through supercenters and launch a small format, which will be a new format for both rural and urban locations.
Continue to convert discount stores to supercenters and work with suppliers to reduce inflationary pressure where possible and only pass on price increases when they cannot be avoided. Those forward looking statements also discuss management's forecasts for the Walmart U. S. Segment regarding gross margin in the 1st fiscal quarter of fiscal 2012, as well as management's expectations regarding the Walmart U. S.
Segment for continued inflation in fresh food categories. That Increases in store standards will position the Walmart U. S. Segment to enhance its merchandise assortment and implement merchandising initiatives. Regarding its goal of gaining traction through changes in product cycle times, modular changes and department space allocations before the Q4 of fiscal 2012, that e commerce and multi channel will play an increasingly important role across the segment's business that the segment's new modular sets will help the segment highlight opening price and recapture traffic lost to competitors that average unit retail prices will continue to decrease in electronics, particularly for TVs, hardware and gaming, that the segment will begin to see the sales declines in these categories abate as the segment progresses through the 2nd 3rd quarters of fiscal 2012.
As to the manner in which Walmart U. S. Can mitigate such price pressure, that the segment will open its 1st Walmart Express in the Q2 of fiscal 2012, that the segment's productivity initiatives can help mitigate higher fuel prices and further increase efficiencies in fiscal 2012. The productivity initiatives can help leverage expenses in the 1st fiscal quarter of 2012, even on lower sales, and that the segment's inventory levels will remain higher than in fiscal twenty eleven through the first half of fiscal twenty twelve. Those forward looking statements also discuss management's expectation that the Walmart U.
S. Segment's 4 point plan will improve performance in existing stores and with that plan. The Walmart U. S. Segment will deliver consistent everyday low price on a basket of goods, support the Walmart US Messaging, with targeted marketing in store and with a variety of media, provide relevant assortment solutions for the segment's customers, Work with its suppliers to deliver the broadest assortment possible at the lowest price in the market, change its remodeling program to right Size merchandise categories and eliminate remodel disruptions, drive efficiencies through its remodeling program to reduce capital costs and expenses, and leverage the Walmart U.
S. Segment's strengths to expand multichannel initiatives. Those forward looking statements also discuss management's expectations that Walmart Sam's Club segment will have a strategy of meeting members' needs and delivering on the Sam's Club segment's brand promise of simplifying members' lives and helping them make smart choices, have a plan on delivering on the priorities of growth, leverage and returns, have strength comp sales in the Q1 of fiscal 2012 make attracting new members its top priority for fiscal 2012 See pressure on business members through late fiscal 2012, experience continued softness in business member sign ups, Continue the trend of period over period inventory growth into the Q1 of fiscal 2012. Grow its existing fleet of U. S.
Clubs, Complete remodels on 60 to 70 clubs in fiscal 2012. Drive its strategic initiatives by Insights, quality and innovations. Provide its members the best prices on their everyday needs and purchases. Leverage fresh foods and grocery to feed its members' families. Invest in areas like technology services, expand on the segment's progress in making Sam's Club a destination for its members' health and wellness needs, step up its efforts to attract new members and focus on building relationships with existing members across a variety of touch points.
Those forward looking statements also discuss management's expectations that the Walmart International segment will experience accelerated growth, Grow through acquisitions, see some sales pressure in Brazil, see continued impact of everyday low price in Japan, Extend Asda's mid tier private label chosen by you to certain categories in the Q1 of next year and remain committed to sales growth and growing the segment's operating income faster than sales each quarter. Those forward looking statements for the Walmart International segment also discuss management's expectations that ASDA's commitment to saving customers money every day will be more important in 2011. Everyday low price in Brazil will increase sales volume and reduce Operating costs. The segment's Canadian bank will be profitable in fiscal 2012. 40 new supercenters will open in key regions around Canada, and organic growth will include significant investments in soft discount formats in Mexico and Brazil and larger formats in China and Canada.
The forward looking statements also discuss the anticipation and expectations of Walmart and its management as to other future occurrences, objectives, goals, trends and results. All of these forward looking statements are subject to risks, uncertainties and other factors, domestically and internationally, including general economic conditions, geopolitical events and conditions, the cost of goods, competitive pressures, levels of unemployment, Levels of consumer disposable income, changes in laws and regulations, consumer credit availability, inflation, deflation, commodities prices, consumer spending patterns and debt levels currency exchange rate fluctuations trade restrictions changes in tariff and freight rates Changes in costs of gasoline, diesel fuel, other energy, transportation, utilities, labor and health care, accident costs, casualty and other insurance costs interest rate fluctuations financial and capital market conditions availability of sites for the development of new or relocated stores and clubs, regulatory and other legal restrictions on such developments, The availability of qualified personnel in various markets, developments in litigation to which Walmart is a party, weather conditions, the resolution of uncertain tax positions, damage to Walmart's facilities resulting from natural disasters, regulatory matters and other risks. We discuss certain of these matters more fully in Walmart's filings with the SEC, including its most recent annual report on Form 10 ks and its most recent quarterly report on Form 10 Q, and the information on this call should be read in conjunction with that annual report on Form 10 ks and quarterly report on Form 10 Q.
And together with all its other filings, including current reports on Form 8 ks, which we have made with the SEC through the date of this call, We urge you to consider all of these risks, uncertainties and other factors carefully in evaluating the forward looking statements we make in this call. Because of these factors, changes in facts, assumptions not being realized or other circumstances, Walmart's actual results may differ materially from anticipated results expressed or implied in these forward looking statements. The forward looking statements made in this call are made on and as of the date of this
Good morning. This is Carol Schumacher, Vice President of Investor Relations for Walmart Stores Inc. Thanks for joining us today for Our earnings call to review both the Q4 and the full year of fiscal 2011. All information for this quarter, Including updated unit counts, square footage and financial metrics, including ROI, are available on our website at walmart stores.com/investors. A full transcript of the call will be available on the website as well Around 7 a.
M. Central Time today, February 22, 2011. Today, you'll hear from key Walmart leaders, Starting with Mike Duke, President and CEO of Walmart Stores Inc, for the opening comments and key highlights of the quarter and the year. Jeff Davis, in his first call as Walmart's Treasurer, will cover the consolidated financial details. As you'll see from our press release, we do have some noise with our numbers.
Then we'll go to the operating segments. First up this time will be Brian Cornell, President and CEO of Sam's Club Doug McMillan, President and CEO of Walmart International, We'll also have highlights on our largest countries within international. We will close the segment discussion with Bill Simon, President and CEO of Walmart U. S. Finally, our CFO, Charles Holly, will cover our financial report card and a variety of points on guidance.
Before we start to discuss our performance for the quarter, there are a few items to keep in mind as you listen to the results. First, we had certain items that affected our 4th quarter EPS last year, as well as an accounting change in Fiscal 2011 that affected last year. These items need to be considered for comparison purposes. 2nd, As a reminder, we had a tax benefit from the 3rd quarter, which we reported in November. The tax benefits from the 3rd quarter and the 4th Quarter that we're reporting today affect our full year and quarterly results.
3rd, I'd also like to point out that during the quarter, we had income from discontinued operations. This income resulted from the recognition of a previously unrecognized tax benefit related to the disposition of our German operations in fiscal year 2,007. Including this tax benefit, diluted net income per share attributable to Walmart was 1.70 For the Q4 $4.47 for the full year. 4th, This is the last quarter that will remind you about our adjusted P and Ls and balance sheets that are available on the Walmart website under Financial Information. Effective with the Q2 of fiscal 2011, Walmart changed the methodology for valuing our inventory.
The retrospective application of this accounting change resulted in adjustments to reported amounts. The adjusted financial statements I mentioned earlier Cover all of fiscal year 2010 as well as the Q1 of fiscal 2011 and they're on our website. Throughout this call, all earnings and earnings per share amounts reflect the amounts for FY 'ten adjusted for this accounting change. I'd also like to mention that we're discontinuing our discussion of consolidated membership and other income beginning in fiscal 2012. This line item is most relevant for Sam's Club, And they'll continue to discuss it going forward.
You'll also note that in today's discussion as well as in the accompanying press release, We provide disclosure on both reported and underlying earnings per share. The reported EPS takes into consideration all the items, including tax benefits and restructuring charges. The underlying EPS is based on our pure operating performance. You'll hear these terms throughout the discussion today. Now, Mike, let's get started with our Q4 and our full year results.
Mike?
Thank you, Carol, and thank you all for joining us. We're pleased with our strong earnings performance for both the quarter and the full year Across our 3 operating segments, at the same time, we are disappointed by our Walmart U. S. 4th quarter sales. Earnings per share for both the Q4 and the full year exceeded the guidance we provided last quarter.
We are reporting $1.41 per share for the quarter $4.18 per share for the full year. These numbers include certain tax benefits that positively impacted EPS and Jeff will cover this shortly. Based on the underlying performance of the company, our earnings per share were $1.34 for the 4th quarter, Which exceeded first call consensus and our guidance. Walmart increased net sales from the previous year by almost $14,000,000,000 to $419,000,000,000 As a company, We leveraged expenses for the quarter and the year, reinforcing our commitment to the productivity loop and EDLC. Operating income rose to more than $25,000,000,000 for the full year, a 6.4% increase Over what we reported this time last year, we continue to deliver strong free cash flow, closing the year with almost $11,000,000,000 We met our goal to deliver stable return on investment and finish the year again with ROI above 19%.
For the year, we returned a record $19,200,000,000 to shareholders through both dividends And share repurchase. Let me pause for a moment. Dollars 19,200,000,000 Return to shareholders. Now that was worth repeating. However, as I said, Sales for Walmart U.
S. Were below our expectations for the Q4. The team did manage expenses well during the quarter And contributed operating income growth of almost 5%. Bill has a clear vision today Of the underlying issues and his action plan addresses the areas critical to a sales turnaround. Some of the pricing and merchandising issues in Walmart US Ran deeper than we initially expected.
They require a response that will take time to see results. Price leadership is critical to our success. We will reinforce our commitment to deliver EDLP. This is what Walmart was built on. We will deliver a merchandise assortment and presentation relevant to our customers.
As Bill will share with you, many of the 4th quarter problems stemmed from merchandise assortment and presentation issues that contributed to customer traffic declines as well as some of the issues related to the remodeling program. I believe Bill is on the right track to see sales improvement throughout the year. Let me be direct on this point. There is no greater priority for me or for Bill than getting sales back into positive territory. Walmart U.
S. Will also continue to grow through our supercenters and additional formats. We will move forward with even greater urgency In opening small stores, I'm encouraged by the response we're seeing in urban markets like Chicago, Washington DC, San Diego and New York. It's no surprise that we see growing opportunities in online shopping. I'm pleased with the sales results of wal .com during the Q4 and expect e commerce and multi channel to play an increasingly important role across our business.
Sam's Club now has annual sales just shy of $50,000,000,000 I'm pleased that the Sam's organization Is really contributing to our shareholder value. Sam's Club turned in a strong performance for the year, delivering comp sales near the top end of guidance. Brian and his team grew net sales 4.4% for the quarter and 3.5% for the year. Sam's comp sales without fuel improved sequentially every quarter with 4th quarter being the strongest. We're seeing the comp sales momentum continue and expect strength in the Q1.
Attracting new members will continue to be the top priority For the year ahead, Walmart International continued to be our growth engine and we expect accelerated growth ahead. International net sales exceeded $109,000,000,000 this year, an increase of more than 12%. Every market contributed a sales increase in fiscal 2011 compared to the prior year. For the full year, International grew operating income faster than sales. We added 4 58 net units this year And almost 8% more selling space in our international markets.
Almost 70% of the additional square footage Came in 2 important emerging markets, Mexico and China. I've told our international leaders That I'd like to see them accelerate organic growth in our emerging markets. We also will grow through acquisitions. We look forward to closing the Massmart transaction in South Africa and expanding our presence in many sub Saharan African markets. In the UK, we continue to work toward finalizing the acquisition of the Nettos stores.
I'd like to specifically recognize our business in Japan, Where our seiyu stores continued their strong focus on everyday low price and operational efficiencies. As a result, Walmart Japan has grown full year profits for each of the past 3 years with this fiscal year Being the best of the 3 years, you're familiar with our company mission of helping our customers save money so they can live better. Our engagement on the Live Better societal issues continues to have a meaningful impact in our communities. Doug and I had the opportunity to share some of our experiences with leaders from companies and countries around the world at the World Economic Forum In Davos, Switzerland last month, we found there's a lot of interest in our global commitment to sustainable agriculture And our new initiative in the US to make the food we sell healthier and healthier foods more affordable for our customers. We were honored That First Lady Michelle Obama joined Bill Simon to launch this initiative last month.
We recognize that around the world There is growing concern about inflation and higher prices, particularly in food and energy. I believe that Walmart is one of the best Positioned retailers around the world to handle these kinds of headwinds because of our commitment to EDLC And EDLP. This is something we will continue to address. You'll hear more about this from our business leaders. As I look ahead for this fiscal year, I am confident that no retailer is better positioned to win globally than Walmart.
We will not waver in our commitment to our customers. Our financial priorities of growth, leverage and returns Guide us in our decisions and strategies. We will continue to add square footage and new formats. We will grow sales and increase comps. We will continue to leverage operating expenses through the productivity loop and we will continue to maximize our returns to shareholders Through dividends, share repurchase and a stable ROI.
Now Jeff will cover the details on our consolidated financial results. Jeff?
Thanks, Mike. For the Q4 of fiscal 2011, Walmart delivered income from continuing operations of $5,000,000,000 An increase of 4.3% from last year. Reported earnings per share from continuing operations attributable to Walmart were $1.41 An increase of 11.9% compared to a dollar 26 for the Q4 last year. We have some noise in both this year's And last year's earnings per share numbers that I would like to explain further. This year, we recorded $243,000,000 of net tax benefits, Primarily from the repatriation of certain non US earnings that increase US foreign tax credits.
This net tax benefit added approximately 0.7¢ to our reported EPS of a dollar 41 for the 4th quarter. By comparison, last year's $1.26 per share had both a benefit and a charge in the 4th quarter. First, we incurred charges for several business restructurings in the amount of $260,000,000 or $162,000,000 after tax. These charges reduced our reported EPS by approximately 4¢ per share. 2nd, we recorded $372,000,000 of net tax benefits, primarily from the repatriation of certain non US earnings that increased US foreign tax credits.
These net tax benefits added approximately $0.09 to our reported EPS. In summary, our Q4 underlying EPS grew 10.7 percent from $1.21 last year to $1.34 this year, which was above our guidance of $1.29 to $1.33 per share. The dollar $0.34 earnings per share points to the strength of our consolidated business. For the full year, earnings from continuing operations attributable to Walmart were $15,400,000,000 an increase of 6.3% over last year. For the fiscal year, reported earnings per share And underlying earnings per share from continuing operations were $4.18 $4.07 respectively, versus our adjusted EPS of $3.73 and underlying EPS of $3.67 last year.
The underlying $4.07 excluded certain tax benefits recorded in the 3rd 4th quarters That aggregate to approximately $0.11 per share for the fiscal year. Earlier, Carol mentioned an important point. In the Q4, the company recognized and discontinued operations an approximately $1,000,000,000 tax benefit in connection with the disposition of our German operation in fiscal 2007. This matter was resolved with the United States Internal Revenue Service during the Q4 of this fiscal year. Now let's dive into the Q4 and the fiscal year results.
Consolidated net sales for the Q4 increased 2.5 percent or almost $2,800,000,000 to $115,600,000,000 Net sales included a currency exchange rate benefit of $664,000,000 On a constant currency basis, sales grew 1.9%. The 13 week US comp sales without fuel Declined 1.1%. You'll hear more details on the Walmart US and Sam's comp sales from Bill and Brian. Gross margin for the quarter was flat to last year at 24.6 percent of sales. 4th quarter consolidated operating income was $8,000,000,000 up 7.3% or $546,000,000 from last year.
This includes a currency exchange rate benefit of $58,000,000 On a constant currency basis, Consolidated operating income grew 6.5%. Operating income grew faster than sales by leveraging operating expenses. The productivity loop is a priority focus throughout the company. Expenses grew approximately 50 basis points on sales growth of 2.5%, which is the 5th consecutive quarter that expenses grew slower than sales. Unallocated corporate overhead grew 9.1% to $505,000,000 for the quarter.
What we classify as core within our corporate overhead expense actually decreased 3% for the quarter. The mark to market of several unallocated foreign currency derivative positions was the primary driver of the increase. It is important to note that unallocated corporate overhead decreased 2% to about $1,700,000,000 for the year. On a consolidated basis, membership and other income declined 4.5 percent or $36,000,000 this quarter compared to last year. For the year, membership and other income was down 1.9% or $56,000,000 As Carol remarked, membership and other income continues to be an important part of the Sam's Club business, but to a lesser degree, for the other segments.
Net interest expense for the quarter increased 13.4 percent to $532,000,000 For the fiscal year, net interest expense was $2,000,000,000 an increase of 6.4%. This was driven by higher debt levels, but partially offset by lower interest rates. Our double a credit rating allowed us to access low cost debt. As a reminder, earlier this year, we issued $5,000,000,000 of debt at some of the lowest corporate rates on record at the time. We continue to have ample access to the credit markets.
At the end of the year, our debt to total capitalization ratio was 42.1% compared to 37% at the end of last year. The effective tax rate for the Q4 was 30.7% and 32.2 percent for the year. This was due to the net tax benefits we previously discussed. These items reduced our effective tax rate by approximately 320 basis points for the quarter and approximately 180 basis points for the fiscal year. Net sales were approximately $419,000,000,000 for the year, which is an increase of 3.4% or $13,800,000,000 over last year.
Net sales included a currency and exchange benefit of $4,500,000,000 On a constant currency basis, our net sales for fiscal 2011 grew 2.3%. As a reminder, currency translation negatively impacted sales by $9,800,000,000 in fiscal 2010. For the 52 week period ended January 28, 2011, US comp sales without fuel declined 1.1%. Consolidated operating income was $25,500,000,000 an increase of 6.4% from last year and included $231,000,000 from currency rate fluctuations. On a constant currency basis, Consolidated operating income grew 5.5 percent to $25,300,000,000 Consistent with our quarterly results, Operating income grew faster than sales for the year as we leveraged expenses.
Expenses as a percentage of sales decreased 32 basis points. This year was another strong year for cash flow generation. We closed the year with free cash flow of $10,900,000,000 Recall last year, free cash flow was $14,100,000,000 enhanced by the artificially low inventory position at year end. Annual CapEx spend was $12,700,000,000 which was lower than our most recent guidance of 13 to $14,000,000,000 This resulted from lower spending and timing associated with the Walmart U. S.
Segment. CapEx spend for the Q4 was $3,400,000,000 We paid almost $1,100,000,000 in dividends this quarter and $4,400,000,000 for the year. As a reminder, we increased our dividends per share 11% to $1.21 from $1.09 and fiscal year 2010. Walmart repurchased approximately $3,800,000,000 of shares during the 4th quarter and $14,800,000,000 for the year, which is the most we ever repurchased. This represents nearly 70,000,000 and 280,000,000 shares respectively.
We have approximately $4,800,000,000 remaining on our $15,000,000,000 share repurchase authorization announced in June of 2010. In summary, Walmart returned $19,200,000,000 to our shareholders through dividends And share repurchase for the fiscal year. As Mike noted, this is truly a record return to our shareholders. Payables as a percentage of inventories for the company were 92.4%, relatively stable from 93.1% last year. Although inventory levels increased 11%, consolidated inventory turns were flat with the prior year.
In addition, we effectively managed payables. We continue to produce a consistently high and stable ROI. We finished the year with 19.2% return on investment compared to 19.3% at the end of last year. Now let's move on to a discussion of our operating segments. We'll start with Sam's Club.
Brian?
Thank you, Jeff. As I have shared with you during the fiscal year, our strategy is to meet our members' needs and deliver on the Sam's Club brand promise of simplifying our members' lives by helping them make smart choices. We achieve that promise by understanding what our members want and providing the merchandise They want at the quality and value they expect. It's important to remember that in last year's Q4, We took a charge for restructuring our operations related to the closure of 10 clubs. Our discussion today, therefore, excludes that charge of $174,000,000 for comparative purposes.
I am very excited to share our results with you today. As they indicate, Sam's members are responding to the offering and experience in our clubs. We had a strong quarter and are very pleased with our club performance. Thanks to the efforts of our dedicated managers and associates. We grew sales and operating profit as well as leverage expenses for the quarter and the fiscal year.
Let's start with the 4th quarter results. Comp Club sales, excluding fuel, Increased 2.7 percent for the 13 week period ending January 28, 2011. I am very pleased to share with you that we were at the top end of our guidance of a comp club increase of 1% to 3% for the 4th quarter. As Mike mentioned, Sands reported sequential comp improvement quarter by quarter throughout the year. Overall, comp ticket and traffic, excluding fuel, increased for the 13 week period by 210 and 70 basis points, respectively.
We are also pleased that our members, both business and Advantage, Visited with us more often and put more items in their basket and flatbeds during the quarter. Sales during the quarter were particularly strong In Fresh Foods and Grocery, Health and Wellness, Home and Apparel categories. Sam's Club operating income for the 4th quarter Increased slightly versus last year to $487,000,000 Excluding fuel, Operating income for the Q4 was flat versus last year. And now Highlights for Sam's for the full year. Comp Club sales, excluding fuel, increased 1.7% For the 52 week period, overall comp ticket, excluding fuel, increased for the 52 week period by 180 basis points.
While overall comp traffic declined slightly, we did see increases in frequency of visit by both our advantage and business members. Operating income grew 1.3 percent to $1,700,000,000 versus last year. We opened 4 new clubs during the fiscal year, with the most recent opening in January in Sharpsburg, Georgia. We are investing more aggressively in member acquisition ahead of club openings and are seeing positive results. We continue to see growth in the Sam's Club brand in our international markets, as Doug and his team opened 14 new Sam's Club this fiscal year.
We continue to work with the International team to share best practices across the organization to ensure We are meeting our members' needs both in the U. S. And around the world. We also continue to improve our member experience By updating our older clubs, we completed 65 club remodels, expanded 2 clubs And relocated 3 clubs during the fiscal year. Now let's turn to the detailed financial results.
For the Q4, net sales for Sam's Club, excluding fuel, increased to $11,900,000,000 which is a 2.5% increase over last year's Q4. Including fuel, 4th quarter sales were $13,100,000,000 which is a 4.4% increase versus last year. Price and volume of fuel contributed almost equally to the increase in fuel sales. For the fiscal year, net sales for Sam's Club, excluding fuel, increased 1.4% versus last year to $45,200,000,000 Including fuel, net sales for the fiscal year were $49,500,000,000 which is an increase of 3.5% versus last year. Fuel increases were driven by 17% increases in fuel prices and a 12% increase in gallons sold for the full year versus last year.
Including fuel, Comm Club sales increased 4.5% and 3.7% for both a 13 52 week period, respectively. Comp ticket, excluding fuel, increased for both Business and Advantage members for both the 13 week and the 52 week period. Comp traffic, excluding fuel, for both the 13 week and the 52 week period increased For our Advantage members and declined for our business members. Additionally, we saw frequency improve for both business and Advantage members for the quarter and the fiscal year. So our members are shopping with us more often and putting more items in their baskets and flatbeds.
While traffic may be down with our business members, frequency and ticket are up. We expect to continue to see pressure on business members Through late fiscal 2012. During the holidays, we focused our messaging on feeding the family and home entertaining. And these messages delivered strong sales in fresh foods, grocery and beverages. We introduced approximately 100 new fresh foods, including bakery programs for cookies, cake and artisan breads.
The new product launches all drove mid double digit comp sales. And in our freezer cooler category, we introduced a new high quality appetizer program, which also drove mid double digit comps. Inflation in selected meat, produce and dairy categories Aided increases in average unit price, partially offset by downward unit pressure. We also had a very successful holiday season in key discretionary categories such as home, domestics And apparel. The team did a great job providing high quality merchandise and preferred brands at a tremendous value to our members.
We transitioned well from holiday season, minimizing markdowns and ending the year in a strong inventory position. Relative to the industry, we are very pleased with the sales of our electronics and technology categories in the Q4 and grew market share Over the fiscal year, members responded well to our strong brand offering, including LG and the Apple iPhone And iPad. We continue to experience price pressure in electronics, especially in televisions, but Had positive unit sales growth of TVs for the quarter. Our expanded health and wellness offering Continues to drive strong sales performance. Tobacco and fuel sales also continued to deliver strong comps.
Sam's gross margin rate, excluding fuel, increased by 8 basis points during the 4th quarter, Primarily driven by the contingent shift in merchandising mix towards higher margin fresh products, very effective management of seasonal merchandise To minimize markdowns and improved global sourcing. Through improved sourcing, we decreased our damage rates throughout the year. Including fuel, the gross margin rate for the quarter decreased 11 basis points compared to last year. Recall that last year's inventory levels were lower than our historical levels due to inventory management initiatives. It's not surprising That our inventory is up.
We closed the year with inventory up 14% compared to this time last year. We feel we've returned To a more comfortable inventory level that provides a good balance of flow and availability. We anticipate this trend of period over period inventory growth To continue into the Q1. Additionally, we have shifted shipping volume forward into the year To meet our earlier club seasonal transition dates. Due to these items, our inventory turns were down slightly in the 4th quarter.
Operating expenses for the Q4 grew 3.4% versus last year. During the Q4, We incurred charges for certain assets that were taken out of service, including the temporary closure of a club in Rhode Island. We plan to rebuild As well as costs associated with continued restructuring of our field organization. If you exclude these items, We leveraged operating expenses by approximately 6 basis points. For the fiscal year, operating expenses grew 2.5%, driven by credit card interchange fees, remodeling and higher marketing investments that drive traffic.
Despite this, We were still able to leverage expenses for the fiscal year. For the quarter, sales per labor hour increased 223 basis points. Units per labor hour increased 27 basis points for the Q4 versus last year. For the fiscal year, Sales per labor hour increased 198 basis points and units per labor hour increased 172 basis points. Membership and other income for the Q4 decreased 1.9% from last year.
Membership income, the primary driver, was flat for the Q4 versus last year. Other income decreased 15% Due to last year's results being favorably impacted by a number of miscellaneous items, none of which was individually significant to the financial statement. For the fiscal year, membership and other income decreased 2.2%, driven apart by a favorable accounting adjustment in the Q3 of last year to membership income. Excluding the effects of the accounting adjustment last year, membership income, the primary driver, Increased approximately 80 basis points compared to last year. The increase was driven by strength in our Plus membership upgrades as well as the number of new members joining at the Plus level.
We continue to be Pleased with the progress of our e values program for Plus members as we enhance the program to make it even more meaningful for our members. Additionally, we are further simplifying the way we communicate value offered to our Plus member. For example, We've always offered a discount to our Plus members on their prescriptions, but the discount varied across prescriptions. Now it's a simplified program, with an 8% discount on branded prescriptions and a 40% discount on generics, not part of our $4.10 generic prescription plan. Our members understand it clearly and it's paying off with upgrades.
Our membership renewal rates remained steady throughout the year. Our win back program targeted to inactive members Also contributed to our improved membership rates. We expect small businesses to continue to be under pressure Throughout fiscal 2012 and anticipate continued softness in business member sign ups. For the fiscal year, operating income increased 1.3% versus last year. Fiscal 2012 is underway.
Our plan is focused on delivering the financial priorities of growth, leverage and return. Our existing fleet of U. S. Clubs will grow. As we shared with you in October, we plan to add between 7 12 new, expanded or relocated clubs next year in the United States.
Sam's Club has committed a significant portion of our capital spend to remodels. We expect to complete remodels On 60 to 70 clubs this year, our CapEx plan for the fiscal year remains the same at approximately $1,000,000,000 Our strategic initiatives will continue to be driven by insights, quality and innovation. In merchandising, We continue to provide our members the best prices on everyday need purchases, leverage fresh foods and grocery to feed our member's family, Continue investing in areas like technology services and expand our progress in making Sam's Club a destination For our members' health and wellness needs. In membership, we will step up our efforts to attract new members And continue to focus on building relationships with existing members across a variety of touch points, including e values wireless network access and clubs our smartphone application and an improved.com site To allow for easier member interaction, in operations, we are focused on driving member experiences that are efficient and engaging. Our sales momentum for fiscal 2011 is carrying over into the 1st few weeks of the new fiscal year.
We expect comp sales Without fuel, for the current 13 week period from January 29, 2011 through April 29, 2011, To increase between 1% and 3%. Last year, sandflip comp without fuel for the 1st quarter Comparable 13 week period rose 70 basis points. Now I'll turn it over to Doug to tell you about Walmart International. Doug? Thanks, Brian.
This year has been another one of meaningful achievement for the team in Walmart International, both in financial terms And in our positive impact in the communities we serve around the world. Our financial goals remain grounded in growth, leverage, and returns. And Walmart International continues to have strong growth in both net sales and operating income. On the topic of growth, I'm pleased to say that we've met our goals of opening locally relevant formats as we discussed in the October meeting for the investment community. In fiscal 2011, Our organic growth included 458 net new stores, representing an 11.2% increase in store count and a 7.8% increase in square footage.
This growth includes 282 new stores in smaller formats, each less than 40,000 square feet. In addition to comp store sales growth and the delivery of our new stores, we're excited about our pending investment in South Africa in the Sub Saharan region of Africa. In addition, we continue to work towards completion of our acquisition of the Neto stores in the U. K. Given that we're recapping the end of the year, please allow me to take just a minute and highlight some of the successes our teams have delivered beyond the quarterly financial results.
For the 2nd year in a row, Walmart Central America was named the most admired multinational company in Central America. Walmart China received several honors, including the best retail place to work and a China best employer. Our Asda team in the UK was selected as Britain's best value retailer for the 12th consecutive year. In addition, Walmart Mexico's Foundation received the prestigious 2010 World Business and Development Award granted by the United Nations Development Program, the International Chamber of Commerce and the International Business Leaders Forum. The award recognized the foundation's indigenous product commercialization program, which offers training and funding to boost production processes of marginalized communities And indigenous groups living in isolated regions to improve their income and quality of life.
And in India, we opened our 2nd training center to teach our associate candidates the skills of being a successful Walmart retailer. Enabling our associates in India is a critical part of our success. You can imagine the student's surprise when, while he was in India recently, Mike Duke stopped by the classroom to answer Their questions. To date, more than 3,000 students have been certified and 10.50 have been placed in various jobs, out of which, nearly 200 are placed in our best price modern wholesale cash and carry stores. These are the associates that will help us fuel our growth in the country.
Now let's get to the numbers. For the full year, our business achieved constant currency sales of $104,800,000,000 or 7.6% growth over fiscal 2010. Our constant currency operating income of $5,400,000,000 grew even faster at 9.7%. I'm also pleased to say that we leveraged operating expenses for the year. All markets grew full year constant currency sales over last year, with some of the highest This is coming from Brazil, China and Mexico.
On a constant currency basis, operating expenses grew slower than sales at 5.8% due to strong expense management in Japan and the United Kingdom. On a constant currency basis, gross margin as a percentage of sales was flat to last year. On a reported basis, Walmart International's net sales were $109,200,000,000 in fiscal 2011, growing 12.1% over fiscal 2010. This includes a $4,500,000,000 benefit from changes in currency exchange rates. Operating income was $5,600,000,000 including a benefit of $231,000,000 from changes in currency exchange rates.
Now turning to our Q4 results. 4th quarter constant currency sales were $30,700,000,000 growing 6.6% over last year. On a constant currency basis, operating income was $1,900,000,000 in the 4th quarter. The 4th quarter constant currency operating income Growth of 4% was slower than sales growth. While gross profit margin and expenses remained constant as a percentage of sales, This year's constant currency operating income did not have the benefits of real estate sales in Canada that we had last year.
Constant currency operating expenses as a percentage of sales were flat to last year as expense leverage in Mexico and the U. K. Offset pressures in our other markets. On a reported basis, 4th quarter net sales were $31,400,000,000 growing 8.9% from last year. Net sales for the Q4 include a $664,000,000 benefit from changes in currency exchange rates.
4th quarter operating income was $2,000,000,000 including a $58,000,000 benefit from changes in currency exchange rates. For the quarter, we did not meet our goal of growing inventory at less than half the rate of sales and we're intent on making improvements here. On a constant currency basis, inventory grew at 12.6%. Days on hand increased 0.4 days over last year. Adding many of this year's new stores in the Q4 had a significant effect on this metric.
Now let's get into the results for several of our larger markets. As a reminder, we hold country management accountable for their results on a local currency basis without the impact of potential swings and exchange rates. The following discussion of country results excludes the impact of currency, and unless otherwise stated, sales and comps are presented in nominal rates. In Mexico, Walmex continues to deliver great results, growing sales in the 4th quarter and growing operating income faster than sales. Until Walmex has annualized its March 2010 acquisition of Central American Operations, the following discussion will include only Walmex's results in Mexico.
While the following results are on a U. S. GAAP basis, Walmex separately reports its earnings under Mexican GAAP, so some of the numbers may be different. Walmex's net sales for the Q4 were up 9.2% and comparable store sales were up 2.9%. The sales growth at Walmex is driven by the 255 stores and 6 restaurants that have opened since the Q4 of last year, Positive comp growth in all Walmex formats and good holiday sales.
Customer traffic increased 10 basis points and average ticket increased 2.9% in comparable stores. For the Q4, Walmex comp store sales for self-service formats grew by 2.5%, while Antad's comp store sales report for the rest of the industry, excluding Walmex, showed only 1.3% growth. Walmex's 4th quarter operating income grew faster than sales at 15.2% on a higher gross profit margin and expense leverage. 4th quarter gross profit margin as a percentage of sales increased 79 basis points from last year, and discipline in expenses allowed for expenses as a percentage Sales to decline by 27 basis points. Moving on to Brazil.
Net sales grew in the 4th quarter amid some changes that are happening in our operations there. However, we did not grow operating income faster than sales. Although we are disappointed with this year's results in Brazil, We've already begun the changes to see business improvement. In January, Brazil began implementing EDLP. Shelf prices on more than 2,000 items were reduced the week of the launch, and additional items are being moved to EDLP every week.
Over the long term, we expect EDLP in Brazil to increase sales volume and reduce operating costs as we've seen in Japan. During this period of change, however, we expect some sales pressure in Brazil. In real terms, Brazil's 4th quarter sales growth was 7.8% and comparable store sales were flat. Customer traffic at comparable stores declined 5.2% and average ticket increased 5.5%, both in real terms. Sales at our cash and carry and supermarket formats performed well during the 4th quarter.
4th quarter gross profit margin as a percentage of sales increased 93 basis points over last year due to margin pressure last year. Expenses as a percentage of sales increased 161 basis points, primarily due to adding many of this year's new stores in the 4th quarter. This increase in expenses caused Brazil's operating income to decline by 41.7% from last year. In the past 12 months, we have opened 45 new stores in Brazil, bringing our total store count to 479. This includes 27 new stores in the Q4 of this year.
Moving to Asia. Walmart Japan has seen Success from its implementation of EDLP, growing sales in the 4th quarter. However, operating income did not grow faster than sales. The results are showing that customers prefer EDLP. Based on information from the Japanese Ministry of the Economy, Trade and Industry, or METI, Our performance continues to stay ahead of other large scale retailers in Japan, and we are increasing our market share in a deflationary environment.
4th quarter net sales and comparable store sales increased approximately 3.1%, both in real terms. Walmart Japan's traffic increased 2% over last year as the newly remodeled stores continue to attract customers and average ticket in real terms Increased 1.5%. Walmart Japan sales of food, consumables and general merchandise each showed a strong performance, while apparel sales were down. Gross profit margin as a percentage of sales increased slightly by 19 basis points from last year, and expenses as a percentage of sales increased 63 basis points from last year. As with last year, 4th quarter operations were again profitable.
As Mike mentioned earlier, Walmart Japan has grown full year profits for each of the past 3 years, with this fiscal year being the best of the 3 years. We look forward to the continued impact of EDLP there. Overall, China sales grew in the 4th quarter as well, but operating income did not grow faster than sales. Net sales for the Q4 in Walmart China grew 9.6% over last year and comparable stores growth was 1.8%. Average ticket grew 9.6% in China, but traffic declined 7.2%.
The primary traffic decline resulted from Trustmark finalizing its merchandising transition to Walmart assortments. 4th quarter gross profit as a percentage of sales increased 96 basis points over last year, primarily due to purchasing efficiencies from growing sales and a reduction in the low margin assortments at Trustmark. Expenses as a percentage of sales grew 197 basis points, primarily due to lower sales during the Trustmark merchandising transition to Walmart's 4th quarter operating income declined approximately 8%. In the past 12 months, we opened 49 new stores, including 45 supercenters, and that brings our store count to 328 stores. Walmart and the selling shareholder of Trust Mart have mutually agreed to extend the closing of the remaining Trust Mart to May 26, 2011, while certain conditions of the contract are completed.
Before moving on, let's give a brief update on India. As you know, we support Barti Retail and their new store growth in India. Barty Retail, whose stores are excluded from our store counts, opened 30 new stores in the Q4 of this year and now operates 118 supermarkets and ten Compact hypermarkets. In our separate joint venture with Barty, we've increased the number of cash and carry stores to 5. 4th quarter comparable sales at our cash and carry stores increased 11.3% over last year.
Turning now to the United Kingdom. Asda continued to grow sales and operating income in the Q4 of this year. However, operating income grew at a slower rate than sales as during the holiday season. In the Q4 of this year, comparable sales excluding fuel increased 1.6% with overall sales growth in the low single digits. Average ticket grew 3% and traffic declined 1.4% in the 4th quarter as Customers made larger purchases and shopped less frequently in the UK's record December snowstorm.
Sales were strong in clothing, toys and sports and grocery. Asda launched its price guarantee last April where customers can go online and with a few clicks Check their basket price against competitors. Over 1,000,000 customers checked their baskets in 2010. Recently, ASDA strengthened its commitment to price, guaranteeing to be 10% cheaper than its competitors, and an additional 800,000 baskets have already been checked under the 10% program. Gross profit as a percentage of sales declined slightly in the 4th quarter.
Expenses as a percentage of sales were slightly lower than last year under ASDAs We Operate for Less program. However, the expense performance was not enough to offset the decline in gross margin. ASDA continues to broaden its appeal, And sales of Asda's premium brand, Extra Special, performed strongly over the Christmas period. According to Kantar World Panel, Extra Special was the fastest growing premium brand of the major retailers. Chosen by you, as does mid tier private label, continues to perform well and in the Q1 of next year will be extended to grocery, meal solutions and chilled foods.
Asda opened To saving customers money every day will be more important in 2011 as VAT taxes in the UK have risen to 20% compared to 17.5% at this And fuel prices rise to record levels. And finally with Canada. Walmart Canada sales grew in the Q4 of this However, operating income did not grow faster than sales. Net sales grew 4.8% in the 4th quarter compared to last year, primarily due to the Supercenter expansion program and strong sales in food, hardlines and health and wellness. This translated into 4th quarter comparable sales growth of 40 basis points.
As a percentage of sales, gross margin was relatively unchanged from last year's higher rate and expenses were relatively unchanged from last strong cost controls in our retail operations offset the cost from our new bank. Operating income declined as last year's results included the gains from sales of some of our real estate properties. Excluding these gains, operating income would have increased from the Q4 of last year. While operating income from our retail operations grew in line with sales, this growth was offset by the start up costs of our new bank. Average ticket increased 60 basis points for the 4th quarter and traffic declined 20 basis points.
In the past 12 months, we opened 8 new stores in Canada, bringing our store count to 325 stores. In fiscal 2012, we expect to open 40 new supercenters in key regions around the country. Canada continues to offer significant opportunity, And we have a winning strategy to capture a greater share of this market. Building on our long track record of growth and performance, we are confident in our ability to Banned and we see a long term opportunity to serve more customers in more ways. I'd also like to mention that in the beginning of Q4, Canada opened the 1st sustainable fresh food distribution center estimated to be 60% more energy efficient than traditional refrigerated centers and saving $4,800,000 in energy costs over 5 years.
The 400,000 square foot Balzac facility is among the most energy efficient distribution Looking forward into fiscal 2012, we remain committed to sales growth and growing our operating income faster than sales each quarter. Our expectations for organic growth include 23,000,000 to 24,000,000 new square feet in our current markets, including Significant investments in soft discount formats in Mexico and Brazil and larger formats in China and Canada. We expect our capital expenditures to continue to range between $4,000,000,000 $4,500,000,000 for the fiscal year. Our focus on price leadership, customer service and productivity have produced good results for fiscal in 2012 in more than 4,550 stores. Now I'll turn it over to Bill for the update on Walmart US.
Bill?
Thank you, Doug. As Mike said, we were disappointed with our sales performance. Our 1.8% comp decline for the Q4 didn't meet anyone's expectations. They certainly did meet mine, period. For the Q4 and the full year, we again delivered strong operating income And we continue to leverage operating expenses.
The P and L is in excellent shape. All we need is top line growth. Let me start with the Q4 recap of merchandising, then I'll get into financial results for the quarter and the full year, and wrap up with a look at our expectations going forward. Certainly, as others have reported, weather and individual tax refund loan delays were headwinds for the 4th quarter sales, But the primary factor for our negative comp sales performance was general merchandise, and more specifically, electronics. It's no surprise that general merchandise makes up a larger percentage of our sales mix for the Q4.
And electronics, which Comprises the largest portion of the overall general merchandise sales mix, had continued price deflation. Despite the price pressure on TVs, Seeing it on the sales line, we again had very strong sales of our prepaid wireless product in the Q4. But recall that we can only account for commission on sales of Prepaid wireless products and services as well as 3rd party gift cards. Had we been able to account for the full sale, We would have added 60 basis points to the 4th quarter comps. I'm pleased with our sales performance in Food and Health and Wellness businesses.
Food, our largest business, delivered positive low single digit comps in the Q4. We believe the additional assortment we put into grocery increased our relevancy for customers. We brought back many opening price point items that were important to our core customers to help generate traffic and loyalty. The modular changes for SKU add backs in food are mostly completed by November and contributed to better sales. The quality improvements we've made in our produce business are also taking hold with our customers.
Health and wellness comp sales Driven by ongoing issues as a result of recalls by key suppliers and a larger than expected generic mix. We see many encouraging trends in our health and wellness business. First, our new Humana drug program enrolled more people than we expected. This provided some tailwind toward the end of the Q4 and will continue to do so this fiscal year. 2nd, The cold and cough season is picking up traction and we're well prepared.
Our consumables business had low single digit negative comps for the quarter. We'll complete our new modular sets in the Q1, which will help us highlight opening price points and recapture traffic loss to competitors. However, in categories where we've already made modular changes such as paper products, we're seeing positive sales momentum, driven by improved customer conversion And offsetting commodity driven deflation. We posted mid single digit negative comps in apparel. We have seen improving sales trends in men's, ladies, plus and women's, offset by a pullback in juniors.
Customers are also buying closer to need, particularly in seasonal apparel. I'm encouraged by recent trends as we add back assortment in key apparel categories, Including shoes and accessories. Home comps were low single digit negative, though winter weather helped drive sales and snow removal and bedding. Promotional and new items as well as home management, floor care and dining did well for the holidays. Home decor continues to face headwinds.
Sales in our seasonal category were slightly below projections in the Q4. We lost sales by having seasonal merchandise spread across Too many areas of the store during the Q4. Going forward, our seasonal merchandise for holidays such as Easter, Halloween and Christmas We'll have integrated targeted plans to present a more compelling presentation and product offering for our customers. Our in store toy business was slightly negative over the holiday season. However, combined with tremendous online toy growth, our overall toy sales Met our expectations this holiday season.
Our last general merchandise category, Hardlines, had a comp decline in low single digits. Sales growth of core sporting goods and automotive categories, where we started to add back assortment, offset softer sales in large exercise equipment, Crafts, Stationery and Books. I shared with you last quarter that we began reassorting our general merchandise categories, Adding back deleted items and categories and making space allocation changes. This process will take longer than did on the food side of the business. With the longer lead times in general merchandise, we will be working on this throughout the year.
Product cycle times, modular changes and department space allocations Our goal is to gain traction on these before we get into the general merchandise rich Q4. We know the power of online shopping, which industry reports said grew by 11% during the Q4. Walmart.com's 4th quarter sales growth Seeded the industry and we're on par with the industry leaders. And this too is a competitive advantage as we offer customers the opportunity to shop on their terms. Now let us get into the financial details for the Q4 and the full year.
As I mentioned, comp sales for the 13 week period were negative 1.8%. Slower traffic was a major factor in the comp decline and average ticket was up slightly versus the prior year. For the full year, Comps on a 4.54 basis declined 1.6%. For the 52 week period, average ticket was up slightly. Traffic drove the majority of the comp decline.
All financial details beyond comp are provided on the fiscal quarter and the year. For the full year, net sales were up 13 basis points, but declined 46 basis points in the 4th quarter. Inventory was up 8.2% compared to last year. Recall, we ended Last year with low inventory levels as a result of our aggressive inventory reduction program. Aside from our sales shortfall In this year's Q4, some of our planned initiatives deliberately increased inventory, namely the addition of merchandise in Action Alley and increased assortment.
In fact, these two initiatives contributed approximately 120 basis points of the total growth. At the end of the year, We did not have any significant inventory exposure. In fact, inventory turns in the Q4 were flat with last year. Gross profit dollars improved 15 basis points for the 4th quarter. The sales decline in lower margin electronics merchandise led to a favorable mix.
Gross margin rate was up 17 basis points for the quarter as a result of the favorable mix. For the year, gross margin was up $11,000,000 or 2 basis points over Prior year, our gross margin rate for the year was basically flat. We leveraged operating expenses again now for 5 consecutive quarters. Sales per labor hour or labor productivity were up again for the quarter and even more for the full year. I want to recognize the operational performance of our stores, Particularly during the intense winter weather storms in December, January and now February.
Our store teams continue to increase store standards This will position us well as we work to enhance our assortment and implement the merchandising initiatives, including adding merchandise into Action Alley. I would also add that our sales performance resulted in a decrease in the expense for our incentive plans. Going forward, that's not how I want to reduce our expenses. 4th quarter operating income grew 4.8 percent to more than $6,000,000,000 For the full year, operating income was up 22 basis points as a percentage of sales increased 3.1 percent to almost $20,000,000,000 These are very strong results given the state of the economy and the difficulty we had during the Q4 on the sales line. I'm confident we can improve sales throughout the rest of the year.
We spent the last 6 months analyzing our assortment and presentation and delving into customer insights About their shopping habits and their preference. Beginning this month, we're removing the high capacity end caps to make way for a more robust, Proper actionality presentation. As I mentioned, space and assortment changes are now underway to improve our merchandise presentation, particularly in apparel, Sporting goods, toys and hard lines in most of our U. S. Stores.
As we've experienced, average unit retail prices are to continue to decrease in electronics, particularly for TVs, hardware and gaming. We believe we can mitigate Some of this price pressure by increasing our focus on products and categories like iPads and other tablets that offer greater growth opportunities. While we progress through the 2nd and third quarter, we should begin to see the sales declines in these categories abate. Our team is implementing a 4 point plan that we expect will improve performance in our existing stores. 1st, everyday low price leadership, savings on the basket.
Walmart will deliver consistent everyday low price, which is what the Walmart brand stands for, on a basket of goods. We also will support our messaging with targeted marketing in store and with a variety of media. 2, broadest assortment possible. Under the leadership of our new Chief Merchant, Duncan MacNaughton, we will continue to work with our suppliers to deliver the broadest assortment possible at the lowest price in the market. 3, improve remodel efficiency and returns.
We will change our remodeling program to right size merchandise categories and eliminate remodel disruptions. We will continue to drive efficiencies through our remodeling program to reduce capital costs and expenses. And 4, Access for our customers. We'll leverage Walmart strengths to expand multi channel initiatives so our customers can shop on their terms. We'll also make meaningful progress on growth as we expand our store format portfolio To continue to grow through supercenters, which continue to offer us the best return on investment and launching small formats.
The development of our small format is progressing ahead of schedule. We expect to open our 1st Walmart Express stores in the 2nd quarter. This will be a new format for both rural and urban locations. We're very pleased with the reception customers are giving Potential Walmart stores in cities such as Chicago, Washington, D. C, New York and San Diego.
As I said, We're driving efficiencies in our remodeling program. In October, we projected a range of $7,500,000,000 to $8,000,000,000 For our capital expenditure budget for fiscal 2012, we're now expecting our capital, including remodeling and logistics, We'll be between $6,500,000,000 $7,000,000,000 We continue to expect to add 11,000,000 square feet of selling space, which will be between 185 and 205 units. We'll also continue to convert discount stores to supercenters. The Q1 of fiscal 2012 is underway. Pressure from higher energy and commodity costs are factors that we will watch closely As they affect our own logistics and transportation costs as well as the prices the customer pays.
Rising gas prices and still high unemployment levels Weigh on the minds of our customers. These issues affect discretionary spending and figure into our assessment for guidance. The use of government assistance programs continues to rise and is up about 50 basis points over this time last year. Close to 80% of our payment mix is still made up of some form of cash, including debit cards. Credit as a form of payment has dropped from last year and is now less than 14% of our payment tender.
During the Q4, inflation in dairy, meat and produce were somewhat offset by deflation in snacks, beverages and dry grocery. Weather issues have affected crop availability in produce and we expect to see continued inflation in fresh food categories. Labor and higher cotton prices are affecting apparel and home categories. In soft lines, we're consolidating suppliers to improve purchasing power and leveraging Our buying power with raw material suppliers. We continue to work with our suppliers to reduce inflationary pressure where possible And only pass on price increases when they cannot be avoided.
Our logistics team continues to increase productivity and efficiency, and I'm happy to report that for the full year, Cases per hour were up 5.6% for the year over last year. Our transportation efficiency increase measured in cases per mile improved 4% for the year. We expect that our productivity initiatives can help mitigate higher fuel prices this year and further increase efficiencies in fiscal 2012. Last year, our 13 week comp for the Q1 declined 1.4%. We expect Walmart U.
S. Comp sales for the Q1 Running from January 29, 2011 through April 29, 2011 to range from negative 2% to flat. Let me remind you, the changes that I outlined will take time before we see positive comp trends. We expect our productivity initiative We continue to help us leverage expenses in the Q1, even on lower sales. We're forecasting our inventory levels to remain somewhat higher than last year through the first half of this year As we implement the changes I've covered.
And last, we expect gross margin to be flat to slightly up for the quarter. Now I'll turn it over to Charles for the rest of the guidance discussion.
Thanks, Bill. Let's get right into our financial scorecard. 1st, growth. Despite continued economic headwinds, We grew both sales and square footage. Sales were up 2.5% for the quarter and 3 point 4% or almost $14,000,000,000 for the year.
By adding 5 11 net units this year, We continue to provide access for customers to save money so they can live better. Net square footage increased by approximately 33,000,000 square feet To almost 985,000,000 square feet at the end of the year. Walmart International alone contributed over 20,000,000 square feet More than 60% of this year's increase, much of this growth in international was focused on emerging markets, Where we believe there are excellent growth and return prospects. We plan to deliver square footage growth of 3% to 4%, And we were just about in the middle, growing selling space by 3.4% for the year. We continue to expect to increase square footage Between 3% to 4% for fiscal 2012.
And this takes into account our move in the U. S. Towards smaller, more productive supercenters. Next metric, leverage. Our focus on the productivity loop has been a company priority for just over a year.
We are proud that the company leveraged expenses now for 5 consecutive quarters. All segments contributed to the company leveraging expenses for the year. Their continued focus has helped make a significant contribution to our bottom line. This will continue to be an important focal point. One area where I can say I'm proud of our progress on leverage is in unallocated corporate overhead.
The focus of our corporate support teams paid off with a year over year decline in corporate expenses. Looking forward to fiscal 2012, We have some planned investments in global e commerce, which will be reflected in unallocated corporate overhead. These are strategically important to the company, but may contribute to higher growth in these unallocated expenses. As we close the year, I'd also like to recognize Progress that our teams around the world have made on converting our financial systems to SAP. We're not finished yet, But the majority of our business now operates on the new system.
We surpassed the largest implementation earlier this year with the transition of our North American operations. The country still on the list to transition to SAP are all of those in Latin America, China and India. This will provide a common platform to better integrate acquisitions in the future. Finally, returns. Our commitment, which I mentioned at the October Analyst Meeting, was to keep ROI stable, which we did again this year.
Return on investment was relatively flat at 19.2% compared to 19.3% last year. This is a very strong return relative to our competitors. I also mentioned back in October that quarterly fluctuations will occur based on our operations. For example, an acquisition may initially be dilutive to ROI. However, in the mid to long term, our continued goal Is to maintain a stable ROI.
Free cash flow for the year was $10,900,000,000 This is incredibly strong and gives the company tremendous flexibility. Let me remind you that last year we reduced inventories in Walmart U. S. By approximately $2,000,000,000 This made our inventory artificially low and makes the comparison difficult between last year and this year. We were not expecting to be at last year's level and we are very happy with our operating results to produce another year of strong returns.
Now let's move on to guidance. Based on our views of the economic and sales environment in the U. S. And around the world, We expect Q1 of fiscal 20 twelve's diluted earnings per share to be between $0.91 $0.96 which compares to last year's EPS of $0.87 The company's expectations for full fiscal 2012 EPS Is to be between $4.35 $4.50 an increase from fiscal 2011 underlying EPS A $4.07 These estimates assume that currency exchange rates remain at current levels. For fiscal 2012, we expect the effective tax rate to be between the range of 33.5% 34.5%, Although we may see some quarterly fluctuations, factors which may affect our rate include changes in our assessment of certain tax contingencies And the mix of international to domestic income.
In October, we announced our capital expenditure plan Of between $13,500,000,000 $14,500,000,000 for the year. Based on where we ended fiscal 2011 And reviewing our capital needs based on efficiencies for new stores and remodels, we are now reducing our guidance to $12,500,000,000 to $13,500,000,000 This lowers the top and bottom of our range by $1,000,000,000 If we have more opportunities to invest in emerging markets like China, we will do so. Let me remind you that this guidance does not include CapEx For any acquisitions. The new guidance ranges are as follows. Walmart U.
S. 6.5 To $7,000,000,000 down from $7,500,000,000 to $8,000,000,000 Walmart International, $4,000,000,000 to $4,500,000,000 unchanged. Sam's Club, dollars 1,000,000,000 Unchanged and corporate and other will be $1,000,000,000 unchanged. I am pleased and honored to serve as Walmart's Chief Financial Officer, and I am proud of the finance organization I have the opportunity to lead. We remain committed to driving strong operations with the foundation of a strong financial position.
This is key to delivering long term shareholder growth. This mission is intrinsically linked with our mission to save customers money so they can live better. As a company, we will continue to focus on leveraging our cost structure and global footprint, along with driving the right balance between growth and returns. Let me remind you of Walmart's key numbers for this fiscal year of 2011 that just ended. Almost $11,000,000,000 in free cash flow.
A return on investment of over 19%, Over 30,000,000 net new square feet and over $19,000,000,000 returned to shareholders through dividends and share repurchase. These numbers represent the commitment and hard work of our associates around the world, the strength of the Walmart business And the continued execution of our strategic plans.