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1 The of Retail2019 Annual ReportWAL-074_Walmart 14/8/19 3:08 PMUniquelyWe re building an ecosystem on a global scale. Our unique set of assets and strong financial position mean we can grow our business and expand our capabilities to deliver solutions for 24/8/19 3:08 PMto ShareholdersSam Walton showed us the way. He gave us a clear purpose and four timeless values. At Walmart, we save people money and help them live better and we do it by serving others, striving for excellence, respecting everyone and acting with and know what else is constant at Walmart? Change. As I visit with our associates all over the world and ask, Other than our purpose and values, the only thing that s constant at Walmart is.

2 And they respond: Change! It s a powerful mindset, and our people have it. These past five years in this role have passed quickly, and it has been an exciting time to be at Walmart. Looking back, I m not sure I could have imagined some of the things we re doing in our business today but, at the same time, it feels like we re just getting started. Our customers and Sam s Club members are being served by associates who are better equipped to create new ways of shopping and put today s technology to work. Our goal is to make it easy, fast, friendly and fun to shop with us. Consider: A busy mom can shop on our app or get through the store faster by finding the items on her list, thanks to the map feature on her Walmart app.

3 She can make purchases with Walmart Pay and go digital to skip the pharmacy line and pick up a prescription. Outside our stores, customers can pull into a pickup spot, have their personal shoppers put their order in their trunk and off they go. eCommerce has finally come to the food business and in a big way. We re putting technology to work with an autonomous scanner that checks our sidecounters to help us improve in-stock levels, and an autonomous floor cleaner that carries a camera to gather data on our product features to share with a FAST Unloader system in the back room that prioritizes items for restocking. Our Sam s Clubs are becoming more digital. With our Scan & Go app, customers bypass the checkout line and pay for items on their mobile device, and now we re testing computer vision instead of barcodes to make the process even faster.

4 Our new Membership Express can cut the time it takes to sign up from eight minutes to fewer than 60 ways we can use technology today and in the future are exciting, but our business is still a people business. We are people-led and tech-empowered, and that makes investing in our associates a strategic priority. On any given CEO LetterDoug McMillon, Chief Executive Officer 2019 ANNUAL REPORT | 1 WAL-074_Walmart 14/8/19 3:08 PMday, our associates may be attending one of our new training academies in the or entering our new fast-track leadership program for Walmart International. They may be benefitting from our expanded parental-leave policies or beginning their careers at Walmart with a starting wage 50 percent higher than it was four years ago.

5 And they may be extending their education with a $1-a-day college degree through our Live Better U program. We ve made a lot of changes with respect to opportunities for our associates, and there s more to come. No doubt the pace of change continues to increase. Recently, I was visiting with a group of students, many of whom are joining our company, and one of them asked me what I had learned during my five years in this position. Surprises? Revelations? It s a good question, and I ve been giving it some thought. These five lessons came to the top of the list: 1. Leadership You can t push a rope, but you can pull it. In other words, sometimes you just can t lead from behind. You can t muscle or push things along.

6 As a leader during transformation, you have to be out in front show that you want to learn, be curious, introduce new ideas, ask questions. Our people are talented, competitive and have a sense of urgency. When they hear about a better way of doing things, they engage, learn and act. 2. Risk There is no growth without change, and there is no meaningful change without risk. So, get comfortable with an intelligent level of risk. Otherwise, the law of diminishing returns sets in as always doing the same things the same way takes over. We invested substantially in wages, associate education, pricing and eCommerce. We acquired Flipkart, Jet and others, and we partnered with global technology companies in places like China and Japan.

7 We don t know what Sam would have done in these moments, but we know he would have been adapting and he would have been aggressive. We re drawing on that legacy today and tapping into that DNA. 3. Time Horizon We re playing the long game. Our priority is to position our company for long-term success. History has shown us that companies that focused too much on the short term were doomed to fail. Managing our business on a daily basis is important, but our most important strategic decisions are made in light of what we want our company to become for the next Our Associates People will surprise you. Several times a week I see or hear about something creative our associates have done. It s inspiring to see their ingenuity and pace.

8 Around the world, Walmart associates feel more comfortable taking risk. They re launching minimum viable products to test and learn from. These have enough function to satisfy early adopters, whose feedback informs future design. Result: We go from Product to Product a lot faster. This is a powerful unlock. We ve always said that our people make the difference. We re certainly seeing that today. 5. Trust It s a challenge to have the broader world know the Walmart we know. As we strive to make our company better, we will also look for ways to build trust by communicating the good work our people are doing and its impact. Included is the work we are doing to strengthen our culture of integrity and improve our compliance talent, processes and systems.

9 In our supply chain, we are eliminating waste, using more renewable energy, reducing carbon emissions and making our items and the packages they come in healthier and more sustainable. Of course we aren t perfect. We make mistakes. But, if the world could see all of the hard-working, well-intentioned people inside our company who are making things better in their communities and in the world, I m convinced they would be moved by it all. I am. CEO Letter2 | WALMARTWAL-074_Walmart 24/8/19 3:08 PMThe progress we re making is reflected in our results. Last fiscal year, we increased total revenue by 3 percent to $ billion, and we generated $ billion in operating cash flow. Breaking it down, Walmart grew comp sales percent, excluding fuel the highest annual growth rate in a decade and eCommerce sales increased 40 percent, nearly doubling the sales of that business over the past two years.

10 And momentum continued at Sam s Club with comp sales growth of percent, excluding International posted positive comps in eight of our markets, including the four major markets, as we also see our digital transformation and innovations taking hold outside the Mexico, many of our customers don t have bank accounts, so the team there launched a new app called Cashi that acts as a digital bank account. At our stores, customers exchange cash for an electronic deposit onto their mobile device then use the app to shop in the store, online, and even to pay their other bills. In many parts of China, same-day delivery really means same-hour delivery. To meet that demand, we invested in a crowd-sourced delivery platform, and now customers in some locations can receive their merchandise within an hour of placing the order .