11. The date of this call is November 16, 2010. 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 anticipating, are expecting, assume, could be, expect, forecasting, goal, guidance, guided, is expected, is planning, may affect, plan, will accelerate, will add, will be, could save, will drive, will ring, will be growing, will come, will continue, will cost, will experience, will generate, will grow, will improve, will not continue, will remodel, will see, will spend, will take, would represent 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 our objectives, plans, goals, targets or expectations are forward looking statements.
The forward looking statements made in this call discuss among other things management's forecasts of our diluted earnings per share from continuing operations attributable to Walmart for the Q4 of fiscal year 2011 and for all of fiscal year 2011. The assumption underlying those forecasts, the currency exchange rates will remain at current levels. Management's forecasts for the comparable store sales for our Walmart U. S. Segment and comparable club sales without fuel for our Sam's Club segment.
In each case, for the current 13 week period, management's expectation that comparable store sales of our Walmart U. S. Segment will be positive for the holidays and the Q4 of fiscal year 2011 and that the Q4 of fiscal year 2011 will be another quarter of sequentially improving comparable store sales for our Walmart U. S. Segment.
Management's expectations as to our anticipated tax rate for fiscal year 2011, quarterly fluctuations in that tax rate and factors that will affect that tax rate. Management's forecasts for Walmart's capital expenditures in fiscal year 2011 fiscal year 2012. Management's goal return on investment being maintaining a stable return and management's expectations that Walmart will continue to manage its inventory to be in line with its current business needs. Although Walmart will see year over year pressure from higher inventories in the Q4 of fiscal year 2011, that our Walmart U. S.
Segment will be the price leader throughout the holidays, that inventory levels at our Walmart U. S. Segment will stabilize in Walmart will once again generate even more cash flow that our operations in Brazil will improve, growth in Walmart's operations in China and India will accelerate, growth in Walmart's Mexican operations will continue and supercenters will be added in Canada and that the sales momentum of Walmart Sam's Club segment will continue into the Q4 of fiscal year 2011 and in the fiscal year 2012, and the Sam's Club segment will leverage expenses in fiscal year 2012. Those forward looking statements also discuss management's expectations for the Walmart US segment relating bake centers driving the segment's sales in November December 2010. Supplier recalls in the health and wellness category remaining a headwind in the near term for the segment.
A new Medicare Part D prescription drug plan driving incremental pharmacy traffic for the segment, the sales of straight talk by the segment in fiscal year 2011 and how the sales of that item could affect comparable store sales of the segment if the full transaction value for those sales was includeable in the calculation of comparable store sales. The sales of Straight Talk and 3rd party gift cards will ring through the company's registers more than $2,000,000,000 for the full fiscal year. Continued strong online sales in the 2010 holiday season for the segment and the factors to drive those sales. The number of new supercenters and other formats, including new units to be opened in fiscal year 2012 by the segment, the number of the segment's stores to be remodeled in fiscal year 2012 and changes in the cost and time of those remodels and the timing of Christmas spending in 2010. Those forward looking statements also address management's expectations that our Walmart International segment will experience a very competitive Q4 in some of its markets.
That such segments sales will grow, although the segment will experience pressure on its overall gross margin. That the sales of that segment's operation in Mexico will grow by certain means that such segments Brazilian operations will continue to see pressure on those operations results from the operating structure in Brazil, changes thereto and the effects of a conversion to an everyday low price approach and regarding product offerings by that segment's ASDA subsidiary and the addition of new stores and square footage to that segment through an acquisition by Asda and the timing for conversion of those new stores to a different format. Those forward looking statements also discuss management's expectations that Walmart Sam's Club segment will not continue to fill the effects of a credit card processing fee in the Q4 of fiscal year 2011 that such segments small business memberships will continue to pressure net membership income in that fiscal quarter in regarding the occurrence of promotional events in the segment's units relating to the holiday season. 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. To be 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, consumer spending, patterns and debt levels, currency exchange rate fluctuations, trade restrictions, changes in tariff and freight rates, changes in cost of gasoline, diesel fuel, other energy, transportation utilities, labor and healthcare, accident costs, casualty and other insurance costs, interest rate fluctuations, financial and capital market conditions, developments in litigation to which Walmart is a party, weather conditions, damage to our facilities resulting from natural disasters, regulatory matters and other risks.
To be included in the SEC, including our most recent annual report on Form 10 ks in our most recent quarterly report on Form 10Q 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 our 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, our 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 call and we undertake no obligation to update these forward looking statements to reflect subsequent events or circumstances.
The comp store sales for our total U. S. Operations and comp club sales for our Sam's Club segment and certain other financial measures relating to our Sam's Club segment discussed on this call exclude the impact of fuel sales of and other amounts for our Sam's Club segment. Those measures are return on investment, free cash flow and amounts stated on a constant currency basis as discussed in this call may be considered non GAAP financial measures. Reconciliations of certain non GAAP financial measures to the most directly comparable GAAP measures are available for review on the Investor Relations portion of our corporate website at www.walmartstores.com/investors or in the information included in our current report on Form 8 ks that we furnished to the SEC on November 16, 2010.
Good morning. This is Carol Schumacher, Vice President of Investor Relations for Walmart Stores Inc. Thanks for joining us today for our Q3 earnings call for fiscal year 2011. All information for this quarter, including updated unit counts, square footage and financial metrics, is available on our website at walmartstores.comforward Slash investors. A full transcript of this call will be available on the website as well after 7 AM CST on November 16th, 2010.
Our executive team is ready to report on our Q3 results of fiscal 2011. Mike Duke, President and CEO of Walmart Stores Inc, will cover the key highlights of our quarterly results. Charles Holly, our incoming CFO, but still Executive Vice President of Finance and Treasurer, Has the details behind our consolidated financials. Then we'll go to the operating segments. First up will be Bill Simon, President and CEO of Walmart US, our largest segment.
2nd will be Doug McMillan, President and CEO of Walmart International. And then rounding out our operating segment discussion will be Brian Cornell, president and CEO of Sam's Club, who will discuss the results for our membership warehouse segment. Finally, in his last earnings call as CFO, Tom Shelley will cover our corporate financial report card and our Q4 earnings guidance as well as some insights into our updated full year guidance. Before we start to discuss our performance for the quarter, let me cover some important financial information. First, I'd like to remind you of the inventory accounting change that we made in the Q2.
Due to the retrospective application of that accounting change, financial comparisons for this Q3 and going forward until the Q1 of f y 12 Will be compared against the financials as adjusted for this change. For example, last year in Q3, We originally reported earnings per share of $0.84 which was adjusted to $0.82 per share because of this accounting change. The income statements, balance sheets, ROI and segment P and L information with the adjustments For all quarters of fiscal year 2010 and the Q1 of fiscal year 2011 are available on our website on the quarterly financials page. 2nd, for the past two and a half fiscal years, Walmart US has had 6 strategic merchandise units or SBUs, and we've been reporting on them in these calls. Those units or SBUs were grocery, entertainment, hardlines, apparel, health and wellness, and home.
Walmart US also offers financial services and products outside of these SBUs. The new merchandising structure, which goes into effect with our Q3 report today, aligns similar categories and allows us to be even more competitive in each customer channel, improving how we target and how we localize our merchandise. Let me cover the makeup of each of these 4 merchandise units. First is general merchandise or GM for short, Which includes toys, seasonal, hardlines, and entertainment. Seasonal includes merchandise for events such as Halloween and Christmas, as well as greeting cards and celebrations.
Hardlines includes hardware, do it yourself categories, fabrics and crafts, automotive and sporting goods. Entertainment includes electronics, music, computers, cameras, photo services, and cellular. 2nd is food, which includes all fresh products, snacks and beverages, and dry foods. Next is Softlines, which covers apparel, jewelry, accessories and shoes, as well as home, both indoor and outdoor living. And last is consumables in health and wellness.
Consumables include personal care, beauty, paper, chemicals, baby and pets. Health and wellness covers Rx, over the counter medicines or OTC and optical. Our dotcom sales for each merchandise area are included in each respective category. So for example, toy sales from walmart.com Are included in the general merchandise unit. Last, this quarter, we had a tax benefit of $191,000,000 Which is approximately $0.05 per share related to favorable adjustments to current transfer pricing policies After negotiations with a foreign tax jurisdiction.
Please bear this information in mind as you listen to the rest of the call. Now Mike, let's get started with our Q3 results. Mike?
Thank you, Carol, and thank you, everyone, for joining our call. In the Q3, Walmart performed well, and we have solid results to report today. So let's get right into them. 3rd quarter earnings per share were $0.95 compared to an adjusted $0.82 last year. Our results included a tax benefit of $191,000,000 or approximately $0.05 per share, Which you will hear more about later.
We are pleased with our EPS growth this quarter. Net sales for the 3rd quarter increased 2.6 percent to $101,200,000,000 The company leveraged expenses for the 4th consecutive quarter. As I've said consistently, the productivity loop is here to stay. We will drive everyday low cost to deliver on everyday low price. It's ingrained in our business and it's how we operate around the world.
Consolidated operating income was $5,600,000,000 up 3.1% from last year. We also added almost 10,000,000 square feet of selling space through 117 new units this quarter. International remains a key to our future growth, and I continue to be impressed with their performance. Sales of Walmart International were up 9.3% And operating income grew faster than sales. We continue to deliver stable return on investment.
And we have an important takeaway for the Q4. We are increasing our full year earnings per share guidance to reflect the tax benefit from the Q3 and the ongoing underlying strength of our business that Tom will cover it in more detail at the end of the call. Now for the highlights of the individual operating segments. Our Walmart U. S.
Business is on the right track. Comp sales were within guidance for the Q3. Operating income grew faster than sales. And Bill and his team delivered expense leverage. The U.
S. Team is taking the right steps to position our stores for the Q4 and for next year. I'm happy to see the response from our customers when I walk stores. They like our progress on merchandise assortment. I might add too, just last week when I visited stores here in the U.
S, I loved the positive energy from our associates. Our associates are really excited about the changes in recent months. Also really like our holiday preparations. We know this is a time of year when customers count on us more than ever. Our own surveys and the reports on the recent U.
S. Election cycle indicate that financial uncertainty still weighs heavily on everyday Americans, including many of our core customers. The paycheck cycle is still pronounced for these customers. Whether it's for everyday groceries or for discretionary items, Walmart U. S.
Will be the price leader throughout the holidays and I remain confident about improving comp trends in the 4th quarter. Moving to Walmart International. Doug and I recently had the opportunity to walk our stores and visit with customers, associates and government leaders on an extended trip throughout Asia. So let me share just a few takeaways from the trip. It's clear that our business model is well suited to this part of the world just as it is in other markets around the world.
We continue to see tremendous upside in China. In Japan, I'm really pleased with the progress we're making, and Doug will share more specifics on our success in Walmart Japan. In India, we opened our 4th best price modern wholesale cash and carry unit last week and the country offers tremendous growth opportunities for Walmart. We're optimistic about the response from the government of India about making changes on foreign direct investment in the country. We're seeing operating income strength in more established markets like Mexico, Canada and the U.
K. More than ever, I believe Walmart is positioned to deliver our unique benefits to consumers and to seize growth in all of our markets. Sam's Club just has great momentum with the positive comp growth Brian and his team posted for the 3rd quarter. Sam's has really stepped up the quality of our merchandise and made our clubs more relevant to members. That focus has paid off and has delivered strong sales for the Q3.
I also like the creativity and the enthusiasm that Sam's Club is using to drive membership sales more aggressively and their commitment to improving productivity. Throughout the company, we are striking the right balance between to the business for the short term and producing sustainable growth for our shareholders. Our focus on driving growth, leverage and returns is positioning us to succeed in the Q4 and for the long term. Before I close, on behalf of our 2,100,000 Walmart Associates around the world, we extend our heartfelt wishes for a happy holiday season and a wonderful start to the New Year in 2011. Now I'll turn it over to Charles for the detailed financial results.
Charles? Thanks, Mike.
For the Q3 of fiscal 2011, the company delivered earnings from continuing operations of $3,400,000,000 an increase of 9% from last year. Earnings per share for the Q3 were $0.95 Compared to last year's adjusted earnings per share of $0.82 Earnings per share included a tax benefit of $191,000,000 which is approximately $0.05 per share due to the favorable adjustments from negotiation of transfer pricing policies with a foreign tax jurisdiction during the Q3. Currency exchange rate situations were not a significant factor for earnings this quarter. Excluding the aforementioned tax benefit, earnings per share for our underlying business We're within our guidance for the quarter of $0.87 to $0.91 per share. Consolidated net sales increased 2.6% to $101,200,000,000 for the quarter.
Walmart International was the main driver of the sales growth And was helped by a currency exchange rate benefit of $349,000,000 compared to a negative impact of 2 point $6,000,000,000 last year. On a constant currency basis, consolidated net sales increased 2.3%. The 13 week total U. S. Comparable store sales without fuel decreased 0.7%.
You will hear more details on the Walmart U. S. And Sam's Club comp sales from Bill and Brian. Expense management is once again a positive story. The company leveraged expenses for the 4th consecutive quarter with expenses growing only 2.1% on a sales growth of 2.6%.
The CEOs for the 3 operating segments will give additional details on their expense performance. Unallocated corporate overhead, which includes corporate expenses, grew to $378,000,000 That's an increase of 8.3% from last year, While core corporate overhead expenses actually decreased 0.5% for the quarter, we did experience volatility in some unallocated foreign currency derivative mark to market positions quarter over quarter that is the primary driver of the increase. Although unallocated corporate overhead can have some volatility from quarter to quarter, we continue to closely watch our spending in this area. Consolidated gross margin declined 6 basis points to 25%. A decline in International's gross margin was offset by a slight increase in Walmart U.
S. Expense leverage. The company grew operating income at 3.1% over last year, meeting our goal of growing operating income faster than sales. The company's operating income of $5,600,000,000 included an $11,000,000 benefit of currency exchange rate fluctuations. On a constant currency basis, operating income grew 2.9%.
Consolidated membership and other income increased 1% to $713,000,000 for the quarter. Excluding last year's favorable adjustment in the Sam's Club segment, consolidated membership and other income would have been up 3.2%. The effective tax rate for the 3rd quarter was 29 point 5%. Due to the favorable adjustment discussed earlier, we now expect the tax rate for the fiscal year 2011 to be between 33% 34%, although we will see some quarterly fluctuation. Factors which may affect our tax rate include changes in our assessment of certain tax matters, settlements of tax contingencies And the mix of income among our U.
S. And international operations. Year over year, consolidated inventory grew 7.7% on a 3.8% year to date sales increase. All three segments contributed to the growth in inventory with the primary driver being Walmart U. S.
Bill will cover more details in the Walmart discussion. Payables grew faster than inventories. Payables increased 17.1%, so our accounts payable to inventory ratio was 88.2%, up from 81.1% at the same time last year. A portion of this increase is driven by Walmart US as the segment had an earlier than normal seasonal buildup of inventories for the holidays. International was also a factor this quarter as new store growth and currency exchange rate factors contributed to the increase in both payables and inventory.
Although the year over year growth in inventory continues to pressure free cash flow, the growth in payables partially offset that pressure. Through the 1st 9 months of the fiscal year, our capital spend was ahead of this time last year. Walmart ended the Q3 of fiscal 2011 with free cash flow of $2,900,000,000 compared to $3,600,000,000 last year for the 1st 9 months of fiscal 20112010 respectively. We will continue to manage our inventory to be in line with our current business needs. However, we expect to see year over year pressure from higher inventories in the Q4 of this year when compared to the prior year.
Our balance sheet remains strong. We continue to have excellent access to credit markets. You will recall that in to we went to the market with a $5,000,000,000 debt offering. At the time of issuance, 2 of the 4 tranches, the 3 year and the 5 year bonds were issued at the lowest corporate rates on record. Our debt to total capitalization ratio at the end of the quarter was 46.4%, up from the 41.3% last year at the same time.
The increase in this ratio was due to the growth in the long term debt. The 19.9% increase in our total debt levels partially offset by lower average borrowing rates were the primary factors in an 8.6% increase in net interest expense totaling $516,000,000 Capital expenditures for the Q3 were $3,800,000,000 bringing our year to date spend to $9,300,000,000 we expect to spend between $13,000,000,000 $14,000,000,000 in capital expenditures for the fiscal year, in line with our guidance outlined at the October 13 Investor Meeting. Our return on investment for the trailing 12 months was 18.6%, up from 18.4% at the same time last year due to continued expense leverage. In this quarter, we repurchased 73,400,000 shares for $3,900,000,000 As you remember, on June 4, 2010, we announced a new $15,000,000,000 share repurchase authorization, which replaced our previous authorization of $15,000,000,000 We now have $8,500,000,000 remaining in our share repurchase authorization. Year to date, Walmart has returned $14,300,000,000 to shareholders through dividends and share repurchase.
We are extremely proud of how we've leveraged expenses and grown shareholder value in this tough environment. Our balance sheet and credit rating are strong and healthy. We remain focused on growth, leverage and returns. Now let's move on to a discussion of our operating segments. To As usual, we'll start with Bill in Walmart U.
S. Bill?
Thank you, Charles. Walmart U. S. Made very good progress during the Q3 on assortment and we consistently drove promotional intensity. We had strong support throughout the quarter from our suppliers in adding to our assortment and in bringing innovation to our shelves.
Our progress is not only reflected in improving sales trends, but also in customer experience scores. Our methodical approach to Walmart's current initiatives is moving us in the right direction. What's most important now is that we're in a position of strength for the busiest and most critical season of the year, and we're expecting a positive comp in the Q4. We will lead on price as we continue to save our customers money every day. We're stepping up our strategic initiatives to help our core customers as they struggle in the current economy.
Remember, 68% of our business comes from customers household incomes under $70,000 per year. These customers deliver to us about 22% of their share of wallet. So there remains a lot of opportunity to deliver even more on Walmart's core promise. Comp store sales for the 13 week period, Which ended October 29th declined 1.3%, which was within our guidance. Our comp sales performance is somewhat suppressed by reporting requirements that I'll get into shortly.
For the Q3, net sales were $62,200,000,000 flat to last year. While we would have liked Q3 sales to have been higher, we're encouraged by the quarterly sequential improvement in comp sales and customer traffic. However, compared to last year, traffic decreased and the average ticket was down slightly. Inventory in Walmart U. S.
Was up 6.5% compared to this time last year, driven primarily by the planned seasonal buildup in the distribution centers. We've also been staging merchandise for the holidays at our import DCs. In store inventory was up approximately 3% in the Q3 compared to last year. To We've managed our inventory well even as we add to our assortment. In fact, inventory at the end of Q3 is still below levels from 2 years ago.
To be included in the Q1 of 2018.
Even while
adding almost 10,000,000 square feet of retail space since last year, we were still able to decrease our total operating expense by $61,000,000 This is indicative of our focus on expense management, since we also had flat sales growth. I'm pleased to report that Walmart U. S. Has now leveraged operating expenses for 4 consecutive quarters. Operating expenses as a percentage of sales were down 9 basis points.
Store labor, of course, remains our biggest expense item. Sales per labor hour or labor productivity were up versus last year on relatively flat wage dollars. To credit to our store associates that our customer experience scores are at the highest level in 3 years. Customers are also happy with the Action Alley displays because of the price intensity and product availability that they deliver. In addition, because they are pallet driven, the Action Alley displays are very efficient from a labor standpoint.
To be a key contributor to the decrease in operating expenses were the following. As I mentioned last quarter, we changed our advertising strategy and brought media expenditures back in line with recent historical trends. Expenses were favorably impacted by lower estimated health expenses and our flat net sales growth resulted in a decrease in our estimates for the incentive plan. National high levels of unemployment have also created headwind in operating expenses with many states increasing unemployment insurance taxes per associate. In fact, unemployment insurance taxes are up 25% for the quarter versus last year.
These types of changes are largely uncontrollable, but can be expected to impact our business from time to time. Operating income for the quarter grew faster than sales to $4,400,000,000 an increase of 1.9%. The growth, as we said, was driven by expense leverage and an increase in gross margin rate of 5 basis points. Gross margin improvements were driven by lower markdowns and increased supply chain efficiencies. Our logistics and transportation teams continue to drive lower costs despite higher fuel costs for the quarter.
Other income from the Walmart segment decreased slightly to last year. Let me move on to merchandise. To Carol covered the change in our merchandise categories earlier, and I'll go into detail on our 4 new units. We continue to make us on our strategy of focusing on EDLP, broadening our relevant assortment, improving in stock and driving promotional intensity throughout the store. This is achievable by partnering with our suppliers, driving innovation, leveraging best practices within the company and listening to our customers.
But against this backdrop, let me remind you that the paycheck cycle remains pronounced, especially in our grocery business. Our food comp sales were a solid positive for the quarter, with strong sales performance in fresh snacks and beverages. Produce and dairy were our strongest categories. In fact, our recent focus on apples was very successful in driving excitement and incremental sales. On several Apple varieties, we were the clear price leader throughout the entire season because of the work of our global sourcing team.
We were able to streamline the supply chain process, which increased our speed to market and improved our quality and freshness. Halloween sales were also strong in food and candy. Customers appreciate the creativity we brought back to the bakery category this year and we had excellent sell through in baked goods. Categories in fresh like meat and dairy continued to see some inflation, while some areas of dry grocery still experienced deflation. Our assortment review progress is moving very well.
We've added the most SKUs back in food and customers are responding. We're pleased with the progress we're making with categories as varied as marshmallows, pie filling jams and jellies. For example, 8 weeks after modulars with additional SKUs were completed, On average, we saw a 39 basis point increase in sales in these categories. We're also expanding our assortment in many cases to achieve our store the community relevance. For the holidays from Thanksgiving through New Year's, we're focusing on turkeys and also full meal options at very competitive prices.
Bake Centers are back in all our stores and we expect these to help drive sales in November December. Consumables and Health and Wellness had a negative comp for the quarter. Deflationary pressures continue to affect sales of key consumables. We're pleased with the continued growth of our beauty business, where we also see a lot of new innovative products driving increased sales. And health and wellness were up against strong sales during last year's H1N1 season.
The business has been impacted also by supplier recalls and the over the counter of the business and we expect this to remain a headwind during the near term. In addition, like some of our drug retail competitors have cited, We've seen increased generic prescription utilization due to the economy. Overall scripts were up indicating that we're gaining share. We're pleased with being able to provide preventative flu shots this year to our customers as well. In October, Humana and Walmart announced an innovative co branded Medicare Part D prescription drug plan starting in 2011.
The plan is nationwide with a premium of less than $15 a month and in store co pays on generic medications starting as low as $2 when plan members use preferred pharmacies like Walmart, Neighborhood Markets or Sam's Club. When you add up the savings based on the monthly premiums being less than 50% of the average plan, the low co payment and cost shares, a typical Medicare Part D beneficiary could save more than $4.50 each year. We believe this will drive incremental traffic to our pharmacies. Our general merchandise unit, which includes entertainment, toys, seasonal and hard lines had a negative comp for the quarter. To Clearly, the fastest growing item in the stores are wireless solutions, Straight Talk.
Straight Talk and prepaid wireless sales have been impressive during the quarter. Straight talk and 3rd party gift cards such as iTunes and restaurant cards to be included in sales net of the product cost. In other words, we only account for a commission on sales. As these sales grow, they have more of an impact on our business. Had they been included in this quarter's comp sales at full transaction value, these items would have added almost 40 basis points to our comp sales for the period.
Given the trend of straight talk and 3rd party gift cards, they would represent as much as 50 basis points to our anticipated 4th quarter comps, if they were included at the full transaction value. These categories will ring through our registers more than $2,000,000,000 for the full fiscal year. Additionally, let me cover some other highlights in our general merchandise area. Entertainment comps were impacted by average selling price declines, particularly in LCD and plasma TVs, consistent with industry trends. However, despite this headwind, sales were up and we had solid increase in units in our TV category.
Back to school sales were up in home office and laptops. Music sales, particularly CDs, continue to decline. Toy comparisons were impacted by the earlier timing of our promotional fall program last year, but we have bought up the toy category this year because we had planned aggressively for the Q4. Unseasonably warm weather in October hindered sales in cold weather categories such as hunting and hardware driving mixed results and hard lines for the quarter. We are very pleased with the result of our tire event in October.
A strong comp in automotive was accompanied by slower sales and seasonal goods and heaters. Overall, our soft line comp, including apparel and home, was negative. In apparel. Warmer weather put pressure on our cold weather business, particularly in ladies, men's and children's. As we cycle through the inventory based on our previous apparel strategy, we're seeing improving sales trends.
Our on the core customer has started to show areas of encouragement as sales of socks and underwear ladies plus sizes and activewear outperformed the rest of apparel. We're very pleased with the expansion of our plus size offering across all of ladies. In fact, comp sales of plus size activewear increased double digit for the quarter. Jewelry continues to improve driven by a renewed emphasis on costume jewelry. In home, we extended the season in the Garden Center.
We're pleased with double digit comps in multiple outdoor categories. There was some weakness in discretionary and decor categories, but customers responded well to back to college, cooking and dining merchandise, as well as Floor Care. In Financial Services, check cashing remains our top performing category and we're gaining share. We continue to benefit from the extension of our Walmart MoneyCard agreements with the Green Dot Corporation. Walmart.com grew at a faster rate than the overall online market again this quarter.
Sales in many categories were strong, particularly electronics and home. We expect continued strong online sales this holiday season, driven by strong site to store demand, free shipping to home and expanded FedEx Metro pickup now in 5 major metropolitan markets and our Pickup Today program now available in over 800 stores. Before I get into discussion of the holidays, Let me discuss our growth plans. As we outlined at our October meeting, next year, we expect to open between 155 and 165 Supercenters with 45 to 50 being new units, the remainder conversions. Walmart is also planning on opening 30 to 40 medium to small format stores.
In addition, we'll remodel more than 500 stores. The remodels going forward will cost less than what we've experienced in the last 2 years and will take 40% less time for fewer disruptions to both the customer and the associate. So far this year, we've remodeled more than 580 stores. These remodels have helped drive our highest ever customer experience scores and will deliver a great shopping experience this holiday season. We finished all remodel work at the end of the Q3.
Also during Q3, we opened 98 new supercenters, including 71 relocations or expansions. We've recently announced a few of our special deals for Christmas. We unveiled our top toys on November 1st, started sending out our 52 page toy catalog on November 5th and created a dedicated section of our website to the top toys of the season. Last week, we also announced free shipping to your home through walmart.com for selective holiday items, including all electronics. We were very pleased with the initial response from our customers to this offer.
Our marketing efforts will be focused on bringing to life how our customers can rely on Walmart to save them money so they can live better. Our holiday message is focused on basket savings. We believe that we have the right level of media buy for the Q4. We also have increased our efficiencies through a strategic program of digital print and electronic buys. We have a number of aggressive programs underway to reach the customers to spend in early for the holidays.
Last year, our 4th quarter comp sales declined 2% versus the previous year. Our Walmart culture ensures that we have a correction of errors every season. We've built our 2010 plans on lessons learned from last year. Christmas is 39 days away from today. The holiday season is certainly here.
We believe our core customers are focused on price, basics, toys for kids and practical gifts. Customers are also spending more time researching online and looking for multi channel solutions. To they will budget for new technology items like e readers and gaming systems. Like back to school and Halloween, we expect that a lot of the spending will come close to Christmas. Walmart is well prepared to take care of our customers this holiday season.
To be another quarter of sequentially improving comp sales. And as I pointed out earlier, we expect positive comps for the holidays. To the 13 week Q4 period from October 30, 2010 to January 28, 2011, we're forecasting our comp sales to range from a negative 1% to a positive 2%. Now, I'll pass the mic to Doug to tell you about Walmart International. Doug?
Thanks, Bill. Walmart International continues to deliver on our financial priorities of growth, leverage, and returns. Our growth this quarter has come from comparable store sales in our new store program, and we're meeting our goal of leveraging operating expenses. I'm pleased that our merchants' focus is on serving customers with quality merchandise, compelling assortments and price leadership. We're driving local customer relevance as we grow sales, and it's great to see the arrival of seasonal items heading into the holidays in many countries.
As Mike mentioned, we recently completed a visit to China, India, and Japan. We visited customers in their homes, talked with them in stores, met with our associates, and discussed things like merchandising, EDLP, and the opportunity to build a career in the company. We left even more enthusiastic about Asia. Scott Price, Ed Chan, Raj Jain, and Toru Noda are building a strong business in the region. Our business in China has a lot of momentum.
This market is developing at a rapid pace, and we're well positioned. India's potential is also enormous. Barti Walmart is growing and learning how to better serve customers in India every day. Our results in the best price cash and carry units are promising. It was great to see Walmart spirit and culture in New Delhi and Chandigarh.
Walmart Japan is making meaningful progress. Our items and prices, plus the in store experience, are tangibly different since my last visit. The team is driving growth, building momentum, and leveraging Walmart's global ability in sourcing. After returning from Asia, we left again to visit Johannesburg, South Africa. We continue to view sub Saharan Africa as an important market and are pleased with how the process is going so far.
We can help add value for customers, future associates and all of the various stakeholders in that region. Now let's discuss our 3rd quarter results. International net sales for the Q3 were $26,900,000,000 an increase of 9.3% from last year. This includes a $349,000,000 benefit from changes in currency exchange rates. Sales on a constant currency basis were $26,600,000,000 a 7.9% increase over the Q3 of last year.
As I mentioned during the investor meeting in October, we're driving comp store and new store growth. Our strategy of organic growth and local relevance deliver the increase in constant currency sales in the Q3. This increase was primarily a result of a strong comp store sales performance in China, Japan and the U. K. And new store growth in Mexico, Brazil, China and Canada.
International's operating income for the Q3, which included an $11,000,000 benefit of currency exchange rate fluctuations, was $1,200,000,000 up 13.5% from last year and an increase of 12.4% on a constant currency basis. Constant currency operating income grew faster than sales. As a reminder, last year's Q3 results were adversely affected by currency exchange rates as well as charges in our businesses in Chile and a sale leaseback transaction in Japan. Without the impact of these prior year charges, constant currency operating income grew slower than sales for the Q3, primarily due to a low gross margin in Brazil. Membership and other income was flat as a percentage of sales.
We once again leveraged our constant currency expenses. Our results this quarter benefited from significant expense reductions in Walmart Japan through their EDLC implementation. We also grew expenses slower than sales in Brazil and Central America. On a constant currency basis, gross margin as a percentage of sales declined by 22 basis points in the Q3, primarily due to the changes we are making in Brazil, which I will get into further in a moment. International inventory grew 13.9%, which was faster than the rate of sales growth.
We did not meet our objective of growing inventory at less than half the rate of sales, and we're very focused on improving this metric. Now I will turn to the results for several of our markets. As a reminder, we hold country management accountable for their results on a constant currency basis without the impact of potential swings in exchange rates. To the following discussion of country results excludes the impact of currency fluctuations. As you know, in February, Walmart Mexico purchased 100 percent of our majority owned subsidiary with operations in Central America.
Until the Central American business has been part of Walmex for a year, the discussion here on Mexico will exclude the results of Central America. This discussion is under U. S. GAAP. Walmex separately reports its earnings under Mexican GAAP.
Walmex's sales for the 3rd quarter were up 10% and comparable store sales were up 2.8%. The sales growth at Walmex is driven by the 256 net new stores and restaurants that have opened since the Q3 of last year as well as a positive comp growth in all Walmex formats. Customer traffic and average ticket both to be at least 1.4% at comparable stores. For the Q3, Walmex comp store sales for self-service formats grew by 2.4%, while ANTAD's comp store sales report for the rest of the industry, excluding Walmex, showed 1.2% growth. Walmex's 3rd quarter operating income grew 4%, which is slower than sales growth.
3rd quarter gross margin at Walmex declined slightly from last year and expenses as a percentage of sales grew faster than sales. Higher utility rates in the current year continue to pressure expenses in Mexico. The Q4 is an important period for Walmex. We will be growing our sales by leveraging new imported merchandise in Sam's and Walmart Super Centers, as well as winning in electronics, entertainment and toys. Now to Brazil.
In the past 12 months, we have opened a net of 79 new stores in Brazil, bringing our total store count to 452. This includes 7 new stores in the Q3 of this year. In real terms, Brazil's 3rd quarter sales growth was 12.4% And comparable store sales grew 1.2%. Customer traffic at comparable stores declined 6.4%, and average ticket increased 7.6%, both in real terms. Comparable sales at our cash and carry and supermarket formats continue to perform well.
At the October analyst meeting, Eduardo Salarzano and I talked about how we're seeing the effects on our margins of converting to a net costing approach and that we're moving forward with integration to simplify the business. In the Q3, gross margin as a percentage of sales declined 1.7% from last year, and expenses as a percentage of sales improved slightly. Marcos Samaha returned to Walmart Brazil to assume the role of CEO during the Q3 of this year. Our management team is very focused on improving how we will buy in Brazil in support of Brazil's conversion to EDLP. The integration challenges we have as a result of running what amounts to 3 separate businesses remain, and we continue to reengineer our processes.
So we're expecting to see continued pressure on Brazil's results. Moving to Asia. In Japan, 3rd quarter net sales in real terms increased 6.4% and comparable store sales performed very well, increasing by 6.1%. While EDLP, local relevance, and positive customer perception are the key drivers of these results, we did see an uplift from having the right assortment for the warmer than average August. Walmart Japan's traffic increased over last year as a result of our remodeled stores, But average ticket declined.
Based on information from the Ministry of the Economy, Trade and Industry, or METI, our performance is head of other large scale retailers in Japan, and we continue to increase our market share. Walmart Japan sales of food and consumables showed a strong performance, while apparel sales were down. Expenses as a percentage of sales are down due to EDLC, even after excluding last year's sale leaseback charges. Overall, I'm pleased to report that operating income in Japan grew faster than sales. China is clearly a significant market.
In the past 12 months, we opened 32 new stores, bringing our total China store count to 298 at the end of this fiscal quarter. Sales increased 15.2% over the Q3 of last year on a comparable store sales increase of 6.9%. Average ticket grew, but traffic declined. In addition, Trustmark stores had lower traffic during the Q3 as we converted stores to new formats. Gross margin as a percentage of sales was flat to last year.
Operating income declined due to the merchandise conversion and integration programs for Trustmark. Many of you are aware that our second close on the Trustmark acquisition was scheduled to occur this month. We continue to make good progress in Trustmark with our system and merchandise improvements. Walmart and the selling shareholder have mutually agreed to extend the closing to May 26, 2011, while certain conditions of the contract are being completed. In the meantime, Walmart and Trustmark continue to focus on their core mission, saving our Chinese customers money so they can live better.
As you know, we support Bardi Retail and their new store growth in India. Bardi Retail continued to grow, opening 24 stores in the Q3 of this year And now operates 93 supermarkets and 6 compact hypermarkets. Under our joint venture with Bari, we now have 3 cash and carry stores and are pleased with the continued sales growth in India. Turning now to the United Kingdom. In the Q3 of this year, comparable store sales, excluding fuel, increased 1.3%.
Overall, sales growth was in the low single digits, with the fastest growing areas being George Apparel, produce, baby and toys. While comparable store traffic and ticket were both up in the 3rd quarter, According to Kantar World Panel, Asda's market share dropped slightly in the 12 weeks ending October 31st. ASDA is improving its offering to customers, specifically in the areas of assortment and quality. Andy Clark and his team have made targeted price investments, including core food products. In September, to providing quality by relaunching its private brand under the chosen by you label, and the products have been selected based on consumer blind taste tests.
1,000 items have already been launched, and we expect an additional 2,500 by the Q1 of next year. Operating income grew faster than sales in the Q3. This was driven by an increase in gross margin as a percentage of sales from increased sales of George Apparel. Expenses as a percentage of sales at Asda were flat to last year. Asda opened 2 new stores in the Q3 of this year, bringing the total store count to 379.
Since the Q3 of last year, we have opened 3 superstores, 5 supermarkets and 3 Asda Living Stores. Asda has recently added strength to its leadership team. Simon King was recently announced as our Chief Operating Officer. Simon brings a wealth of retail and supermarket experience and is a great addition to a strong team. In addition, Charles Redfield has been appointed Chief Merchandising Officer.
Charles brings more than 20 years of Walmart experience and was most recently in merchandising in our Sam's U. S. Division. The Netto acquisition we announced in May of this year continues to progress, and we've received formal approval from the OFT or Office of Fair Trading in the 3rd quarter with a requirement to sell 47 of the Neto stores. The remaining Neto stores will add 148 new stores and 1,100,000 square feet.
Full conversion of these Neto stores to the Asda Supermarket format is expected to be complete by this time next year. We are encouraged by the recent sales momentum in the UK. We are well positioned for the holiday season. At a time where economists are forecasting very tough economic conditions, Asda remains committed to saving customers money every day. And finally, Canada.
Walmart Canada's 3rd quarter sales growth was 4.6% due to a strong supercenter expansion program and sales food. We have a total of 109 Supercenters in Canada, 40 more than this time last year. Comparable sales in Canada were negative 0.4% on lower traffic, which was down 0.1%. Ticket was down 30 basis points. While Canada experienced record market share in food, consumables and baby, we experienced declines in sales of electronics and automotive.
Despite the sales mix shift towards lower margin items, Canada's gross margin rate increased by 36 basis points over last year due to better inventory management, including a reduction in shrinkage and improved purchasing. Canada's expenses grew faster than sales, primarily due to incremental expenses on the launch of our banking operations and higher advertising investment. Canada's 3rd quarter operating income grew faster sales as the increase in margin offset the growth of expenses as a percentage of sales. In addition to Canada's 109 supercenters, we have 212 Walmart stores. So our business in Canada is still largely general merchandise driven.
As you know, with the exception of Canada, the Q4 ends on December 31st for our country, so Walmart International is halfway through the Q4. In addition to the normal competitive pricing situation, we're currently working towards more of an EDLP approach in Brazil. As we make that conversion, we will to experience some profit pressure, and we're expecting that it will be more challenging than in previous quarters to grow profit faster than sales. We anticipate a very competitive Q4 in some of our countries. While we expect sales to grow, the competitive environment is pressuring overall gross margin.
One last item of note. We recently announced our non binding offer to purchase an ownership interest in South Africa's Massmart, And we are currently exploring a variety of options relating to ownership structure with the ultimate objective being to maximize shareholder value. Massmart offers a compelling growth opportunity with a talented team that is also a good cultural fit with Walmart. We see the opportunity to increase value for Massmart customers and reach even more customers together. We remain excited about this potential investment.
Now Brian will cover Sam's Club. Brian?
Thank you, Doug. During our recent investor meeting, we outlined how Sam's Club will continue to drive growth, leverage and returns through our Savings Made Simple framework. We are focused on listening to our members and effectively serving their needs. Before we get into the financial details for the Q3, I want to share some key highlights. Comp sales, excluding fuel, for the 13 week period ended October 29, increased by 2.4%.
I'm excited to say Sam succeeded our original guidance of flat to 2%. We also were solidly within our updated guidance Of 1% to 3%, which we provided on October 13 at our investor meeting. We maintained a strong margin rate, but to due to expense pressures, couldn't translate that performance to operating margin. Our sales momentum is evidence that our members are responding well to our improved merchandising offering. Sales during the quarter were particularly strong in fresh, jewelry, home And certain technology and entertainment categories.
We also introduced more than 100 new items in fresh this fall, a historic high for Sam's Club. Recently, an independent third party annual survey ranked Sam's Club Pharmacy 2nd, of all U. S. Pharmacies. This was our highest rating ever.
To build on this success, We're expanding health and wellness offerings. As of yesterday, our members can take advantage of the lowest Medicare Part D plan offered in the marketplace at Samsla Pharmacies. And let me remind you that our Sampler Pharmacy is open to members and non members. Innovation and service drive success in technology and entertainment. So it's important to our members that we have the most up to date technology and top brands.
We introduced LG and the Apple iPhone and iPad. We've also stepped up our associate training to provide more technology assistance to our members. We're also near completion of WiFi ing all of our clubs, Which enhances the shopping experience. Now let's turn to the detailed financial results. For the Q3, net sales for Sam's Club, excluding fuel, increased to $11,100,000,000 Which is a 138 basis point increase over last year's Q3.
Including fuel, 3rd quarter sales were $12,100,000,000 which is a 2.7% increase versus last year, due in part to higher fuel prices this year compared to last year. Fuel prices in the Q3 this year were approximately 8% higher than last year. As I mentioned earlier, comp club sales, excluding fuel for the 13 week period, increased 2.4%. Including fuel, club comp sales increased 3.8%. Comp ticket, excluding fuel, increase for the 13 week period, both for business and Advantage members.
Comp traffic, excluding fuel, Increased for the 13 week period among Advantage members, but declined slightly among business members. Our food and beverage business both had strong sales. We did experience inflation in dairy and meat. Back to school and back to college, as well as the fall tailgating season, drove sales and technology and entertainment. We were pleased to see we gained dollar share in computers and TVs during August September.
In home, We continue to see very strong comps in furniture, domestics and housewares. And jewelry comps were in the high single digits. Finally, tobacco and fuel sales continue to deliver strong comps. Sam's gross margin rate, excluding fuel, increased by 22 basis points during the Q3, primarily driven by the continued shift in merchandising mix towards higher margin fresh products, apparel and jewelry, as well as an increased margin in technology and entertainment. Our merchants have done an excellent job managing seasonal buys and sell through to mitigate margin impact of markdowns.
Including fuel, the gross margin rate for the quarter increased 8 basis points compared to last year. Inventory increased by 4.2% versus last year, driven in part by the normal anticipation of the holiday season. Additionally, you may recall, last year's inventory levels were lower than our historic levels due to inventory management initiatives And an impact from a calendar shift on merchandise receipts. Our inventory turns were up in the 3rd quarter. With conservative buys for Halloween, we're able to manage sell through for a successful Halloween season.
We entered the Q4 in a strong inventory position, And we are actively managing our seasonal transition through the holidays. Operating expenses grew 4.8% versus last year, driven by increases in credit card interchange fees, remodeling and marketing expenses. As I explained in our Q1 call, beginning in April, in response to the continuing challenging credit program, we began paying an interchange fee in conjunction with our credit card program. We will not continue to feel this headwind in the Q4. During the Q3, 26 clubs were remodeled this year versus 23 last year.
Additionally, during the quarter, we increased our marketing budget for key fall initiatives, including our back to school program, football season, 15 weeks for $15 membership and Labor Day e values for all event. For the quarter, sales per labor hour increased 60 basis points. Units per labor hour decreased slightly for the Q3 versus last year. Although we did not leverage expenses for the quarter, I am pleased with our year to date performance on expense leverage. As a result of the increased expense level, 3rd quarter operating income decreased 7.1 percent versus last year to $367,000,000 This represents a decrease in operating margin of 32 basis points from last year.
Excluding fuel, operating income decreased by 8%. Membership and other income decreased 5.1% from last year. You may recall that in last year's Q3, We recognized a favorable accounting adjustment to membership income as well as experienced strong comp results from the rollout of e values for Plus membership. Excluding the effects of the accounting adjustment last year, membership and other income for the Q3 increased 40 basis points compared to last year. Membership income, the primary driver, decreased 5.9% versus last year.
Excluding the accounting adjustment, membership income was flat. We are pleased with the continued increases in Plus membership penetration and new member sign up at the plus level, reflecting our focus on this initiative. We're also pleased with the overall renewal rates. These strengths have been offset by 2 factors. First, the continued erosion in the number of business add ons due to the economic pressure that so many small business members are experiencing.
2nd, the net impact of the membership loss from the 10 clubs closed last fiscal year compared to new club openings this year. In the Q3, we began to overlap the successful launch of last year's eValuys program, which kicked off August 17, to 2,009. To spur additional upgrades and acquisitions, we hosted a weekend Labor Day event, which delivered strong results. To The Labor Day eValue Savings Celebration serves as a trial and awareness vehicle for all members to experience the additional discounts afforded by e values. As we enter into the 2nd year of eValuys, we continue to focus on providing relevant and meaningful values to our members through various events.
We expect the trend in small business membership to continue to pressure net membership income in the 4th quarter. The Q4 is underway, and we are focused on driving even greater value to our members and shareholders. Our annual Taste of Sam's event kicks off this Friday and lasts through the weekend. We plan to demonstrate Sam's is your one stop shop for the holiday season for both meals and entertaining. Each club will host at least 18 demos each day.
We also will demo more than 50 different holiday foods and entertaining merchandise items. This event always drives traffic and new member sign ups. In non food categories, we feel we are solidly positioned across the club to have a successful holiday season. And we are focused on meeting all the gifting needs for our members with a fresh approach to merchandising the product. We are very pleased with the early sales results in holiday decor, holiday gifting and food categories.
We're entering the Q4 with a lot of momentum in home, apparel, jewelry and new products from Apple, and we anticipate strong comps in these areas. We continue to see our 3rd quarter sales momentum carry over into the 1st 2 weeks of the Q4. We expect comp sales without fuel for the current 13 week period to increase between 1% and 3%. Last year, Sam's comp without fuel for the comparable period rose 70 basis points. Now I'll turn it over to Tom for the report card and guidance discussion.
Tom?
Thanks, Brian. Before I get into our financial report card to discuss growth, leverage and returns, let me provide an SAP update North America continues to get better with each monthly close Mexico has now started the SAP conversion and Argentina is next in line. With each country that goes live, we get more efficient. Now time for the financial report card. First, let's discuss growth.
For the Q3 of fiscal 2011, we grew our square footage, net sales and operating income. Sales grew almost 3% for the quarter mainly driven by international net retail square footage grew by approximately 10,000,000 square feet to 971,000,000 square feet at the end of the third quarter. So far this year, we have added 18,600,000 square feet as we introduce the Walmart promise to more and more customers globally. We are still bullish on our growth prospects, both here in the United States and in our international markets. And we continue to grow operating income, as mentioned earlier, up more than 3% in the quarter.
Now let's move on to leverage. We've now produced 4 consecutive quarters of expense leverage as we maintain our focus on the productivity loop and resulting everyday low costs. Like last quarter, expense leverage was a significant factor in achieving our bottom line results. And as Mike indicated, we remain committed to expenses growing slower than sales. Finally, let's talk about returns.
As I mentioned in the Q2, inventories at the end of last fiscal year were relatively low for Walmart. This quote unquote starting point continues to impact free cash flow. Accounts payable as Charles indicated benefited free cash flow. That said, our free cash flow through the previous 9 months of the fiscal year was a healthy $2,900,000,000 but below the $3,600,000,000 we reported for the same period last year. To remember our goal for return on investment is to maintain a stable return.
ROI for the 12 months ended October 31st was 18.6%. That's up from the 18.4% we reported last year. Like last quarter, the story behind ROI is strong operating performance. As I mentioned earlier, we are growing square footage and continue to invest in our business. Average quote unquote invested capital or the denominator used to calculate ROI grew by 7.3%.
However our continued focus on the productivity loop has produced strong operating results. That leads us to the numerator. The trailing 12 month adjusted operating income has grown by 8.4 percent far better than the increase in the denominator. To overall we're extremely satisfied with our ROI performance. Face it at 18.6 percent pre tax return to this is very impressive.
Now let's move on to guidance. Mike mentioned earlier that we are raising our EPS guidance for the fiscal year. Based on what we see today and our expectations for the U. S. Sales environment, to be between $4.08 and $4.12 per share.
That's up from our previous full year guidance of $3.95 a share to $4.05 Correspondingly, our 4th quarter diluted earnings per share guidance is between $1.29 $1.33 Both of these ranges assume that currency exchange rates to remain at today's levels. Before I close, let me summarize some of the key points for our Q3. At the end of the day we posted another strong quarter. First, we reported more than $100,000,000,000 in net sales. As I indicated, we added approximately 10,000,000 square feet of retail space.
Once again we leveraged operating expenses which allowed us to grow operating income faster than sales. We had another quarter of great EPS growth. ROI is 18.6 percent and better than at this time last year. And finally, our free cash flow of $2,900,000,000 is the 2nd highest 3rd quarter performance on record. Having said that, we understand that we have an opportunity to improve even further across our businesses.
1st, we have an opportunity to improve Walmart U. S. Comp store sales. We believe the Q4 will be in positive territory. As we continue to make progress in our merchandise assortment, we will expect inventory in Walmart U.
S. Will settle down and will once again generate even more free cash flow. In Walmart International, we will improve operations in Brazil to increase profitability and we will accelerate growth in China and in India. We will continue to grow in Mexico and add more supercenters in Canada. The