Good morning, welcome to Walmart's 2021 Investment Community Meeting. Thank you all for joining us on the webcast. We appreciate your interest in Walmart. I know the executive team looks forward to sharing their strategies with you and answering your questions. Let me get a few of our usual statements out of the way. The information presented at today's meeting should be viewed in conjunction with our press release and earnings materials that can be found on our website, stock.walmart.com. The presentations will also be posted on our website as they are completed. Today's presentations include forward-looking statements that are subject to future events and uncertainties, which could cause actual results to differ materially from these statements. Please reference our entire Safe Harbor statement and non-GAAP reconciliations, which are included with our earnings materials on our website, stock.walmart.com. Hopefully, you've had a chance to review our earnings materials and guidance issued this morning. You can see today's agenda on your screen. In a moment, Doug McMillon, Walmart's President and CEO, will share some initial thoughts with you about our culture, our people, and our opportunities. Then he'll be back to discuss Walmart's strategic objectives after you hear from our CFO, Brett Biggs. Brett will discuss Q4 results and fiscal year 2022 guidance. Then we'll conduct our first of two Q&A sessions today. We will have a brief 10-minute break following the Q&A session. Then you will hear from several other leaders who will discuss our priorities and strategies across the business. Following these presentations, we will have another brief break. Then we will conduct our second Q&A session. At the end of that session, our formal meeting will conclude. With that, let's get things started. Hello, everyone, and thank you for joining us for our 2021 Investment Community Meeting. We're grateful for your interest in our company and for the confidence so many of you have in our future. We believe that confidence is well-founded, and we're excited to give you an update on the opportunities we see ahead. I've been a part of Walmart for more than 30 years now, and I can't remember a time when there was so much exciting change happening inside our company. The world around us is changing in big and important ways, and I'm so encouraged by how our associates are leading and embracing change. We have a blend of experience and new thinking that are coming together to allow us to execute with more creativity and speed. We aren't the business we were just a few years ago, and we aren't the business you'll see in the years ahead. We're moving. David Glass was a CEO that followed Sam Walton. He led us into the food business and got us started outside the United States. In the 1990s, I remember him telling us repeatedly that the company was just getting started. Every time I'd hear him say it, I would think, "Really?" We were already large by then, and so much had already happened. Today, I can tell our associates the same thing. There is so much opportunity still in front of us. We have the talent, the culture, and the assets to thrive in the next generation of retail, to invent it. We've been building for this moment, and the moment is here. It's up to us. We can make it true that in 2021, this company was just getting started. I know many of you have been investing in and following Walmart for a long time, and you know a lot about our company. This is a different business today, and we're just getting started. We're moving. Looking back at 2020, I'm so proud of how our big team has responded to the challenges. They just keep stepping up. It feels like our customers and society have come to appreciate our associates more than usual, and that's well-deserved. Many have been selfless and courageous. We've tried to show our frontline associates in our stores, clubs, and supply chain our respect and gratitude with our words and our actions. They, along with our customers, our shareholders, our suppliers and partners, the communities we serve, and the planet we seek to strengthen, shape our decisions. We take a multi-stakeholder view because we know that mindset and approach deliver the most valuable, sustainable business over time. As for today, Brett will join us in a moment to talk about our results for the fourth quarter, as well as to provide an outlook on our expectations for the next few years. I'll come back after his remarks to talk through the acceleration of our strategy and how we'll deliver sustainable long-term growth. You'll hear from several of our leaders about the specifics of our plan. I'm confident you'll leave this session with a clear understanding of a few key points. First, innovation and speed. It's time for us to dial up our aggressiveness even more and go faster. Walmart is in a position of strength, and we have momentum. Our confidence in our plan motivates us to accelerate, and we'll walk you through why we feel that way. Second, we're building a new customer-centric business model. Our customers welcome us serving them in new ways, and our assets and capabilities are being monetized in ways we haven't tapped into before. We have assets to leverage, like our stores and supply chain, strengths like our store traffic, and a brand trusted for value. We have foundational cornerstones like EDLP and EDLC. We can stay true to who we are and build on our strengths while building a mutually reinforcing flywheel. We're starting to drive the top and bottom line in more expansive ways. Our bottom line is becoming more diversified, which will enable us more operating income growth over time. We're repositioning to be in different businesses and exiting some geographies so resources are shifted to our priorities. We're building a better model, and it's uniquely Walmart. Third, we'll continue designing this business to create shared value for all our stakeholders. We're out to demonstrate that our company can do even more good for people as we grow. Communities are strengthened. Customers, associates, shareholders, and suppliers benefit. Everyone wins. I'll be back to share more specifics on the strategy in a few minutes. Now I'd like to welcome Brett to add his view on the quarter and the future. Brett? Good morning. Thanks, Doug. I've been with Walmart for more than two decades, and this is one of the most challenging and unique times we've all faced. However, it's also a time that presents great opportunities, and I'm looking forward to highlighting some of those for you this morning. I'm so proud of how our associates have responded in serving customers while accelerating our strategy. The recent progress in transforming Walmart into a truly omni-channel business prepared us for this period, and it helps shape our future. This is an important moment for Walmart, and we are ready. There are several things I want you to take away from this morning. First, we have great momentum. We just completed a year with record sales of $560 billion in constant currency, including record fourth quarter sales of more than $150 billion and record operating cash flow of $36 billion. Profit growth was also strong, thanks to a number of things. Strong sales, in particular, improving general merchandise sales, improving e-commerce margins, and improved margin mix overall. Now, certainly, we had tailwinds during the year, but we're performing extraordinarily well. This strong performance has allowed us to invest in the future of the business, invest in our associates, and give good returns to shareholders. From a position of great strength, we're now going to accelerate investments in supply chain, technology, automation, and our associates, allowing us to stay ahead of shifts in customer behavior. We strongly believe these investments will accelerate the company's top line and profit growth in the mid to long term. Active portfolio management is also strengthening the model and focusing resources, and we remain laser-focused on operating efficiency and delivering sustainable expense leverage. Let's turn to highlights of the fourth quarter and the year. During the year, we saw elevated sales levels related to customer stocking up, eating at home, entertaining and educating at home, and investing in home decor and their yards. Of course, those things were supported by stimulus spending. In parallel, we had incremental COVID costs, some of which will continue. We had a strong holiday season, followed by an acceleration in January. Total constant currency revenue was strong, increasing more than $10 billion for the quarter and $40 billion for the year. Walmart U.S. comp sales, excluding fuel, grew 8.6% in both Q4 and for the year, including 79% annual growth in e-commerce. Walmart U.S. grew net sales by $29 billion for the year. For context, that is similar to the annual revenue of Dollar General and Starbucks. Sam's Club wrapped up a terrific year with full-year comp sales growth of 15.8%, excluding fuel and tobacco, and membership income increased more than 9%. On its own, Sam's Club would rank near the top 50 in the Fortune 500. Outside the U.S., sales increased 6.3% in constant currency for the quarter, including 60% e-commerce growth with strength in India, Mexico, and Canada. Seven of nine markets posted positive comp sales. For the year, international net sales grew more than $6 billion in constant currency. Adjusted operating income on a constant currency basis declined about 3% in the quarter, was pressured by more than $1 billion of incremental COVID expenses, including associate bonuses, as well as a charge of around $220 million related to a decision to repay U.K. property tax relief granted earlier in the year. The fourth quarter also included some increased tech expenses and increased wage pressure related to recently announced structure changes in Walmart U.S., as well as additional headcount to ensure our holiday season was a success, which it was. Excluding the U.K. charge, total company adjusted operating income would have increased. Despite various headwinds, Walmart U.S. adjusted operating income increased 6.5% on solid gross margin improvement and continued reduction in e-commerce losses, as well as some benefit related to timing of allocations. For the year, adjusted operating income increased over 9% in constant currency, with each segment growing significantly despite more than $4 billion of incremental COVID costs. Q4 adjusted EPS was $1.39, but would've been about $0.37 higher if not for COVID costs and the U.K. property tax repayment. GAAP EPS was a $0.74 loss, significantly impacted by the loss on businesses in the U.K. and Japan, as both are classified as assets held for sale. That's partially offset by an unrealized gain in our investment in JD.com, the value of which has increased by $9 billion since our initial investment. Operating cash flow for the year was exceptionally strong at $36 billion, and the company returned $8.7 billion to shareholders through dividends and share repurchase. In summary, it was a great year financially, and on an underlying basis, it was a strong finish. Let's now talk about how we plan to continue the strong momentum. Because of our financial strength, competitive position, and ability to execute, we're in a unique position to continue innovating and serving customers in multiple ways. Over the past several years, we've made great progress building an ecosystem of synergistic assets, and we've made strategic choices, like reducing exposure to lower growth international markets while focusing on higher growth opportunities in the U.S., Mexico, and India. Now is the time to play even more aggressive offense. We're winning, and we intend to keep pushing the ball aggressively down the field. Over the next few years, we're going to step up capital investment, primarily in the U.S., to improve the customer experience, support growth, and drive efficiencies. I'll give you some highlights, and you'll hear more as the morning progresses. As I mentioned earlier, our revenue grew $40 billion last year, putting us at least a year ahead of where we thought we might be. We need to lean in more aggressively in key markets with increased capital and fulfillment capacity, supply chain, automation, and technology. This new infrastructure will allow us to expand e-commerce assortment, enabling us to reduce both shipping time and cost. We'll step up automation in DCs to deliver aisle and department-ready pallets to stores. We'll continue to refresh our existing stores by enhancing pickup and delivery capacity, merchandising programs, and efficiency initiatives. In India, we see significant growth opportunities for Flipkart and PhonePe. It's exciting to see the emerging middle class rapidly adopting e-commerce and using their mobile phones to use money transfer, insurance, and other services. We'll step up technology investments to continue upgrading legacy enterprise systems and customer-facing technology. We're on a multi-year journey of modernizing our tech stack and capabilities to increase the efficient use of the cloud and simplify customer and associate experiences. As we accelerate investment, CapEx is expected to be around $14 billion this year, with most of the increase versus last year in the U.S. Over the next few years, we expect CapEx to be around 2.5%-3% of sales. While this is higher than the past few years, it is far below the CapEx peak of 4%-5% of sales during the period of heavy Supercenter growth. This spend will allow us to fully optimize our strategy and, in turn, accelerate the company's top-line and profit growth rates in the mid to long term. After a year or so of transition, these investments should put us in position for +4% sales growth and operating income growth rates higher than sales. 4% top-line growth would basically be the equivalent of adding a Fortune 100 company every year. Our unique financial strength allows us to continue to deliver strong returns to shareholders while growing the business. As you saw this morning, we increased our dividend for the 48th consecutive year, and we authorized a new $20 billion share repurchase program, which we plan to execute over the next three years or so. There are so many initiatives underway that give us confidence that these are the right investments at the right time. We're already seeing proof points, and you'll hear more about these later on. We expect continued strong growth in the U.S. businesses and expect even higher international growth rates as we focus on key markets and making money in new ways. We'll continue improving margin mix through an enhanced general merchandise offering, new brands, and marketplace growth with a greater push towards expanding fulfillment and other services for sellers. We'll drive existing and new customer growth through initiatives like Walmart+. We'll grow sales and profit increasingly with growing higher-margin businesses in advertising, financial services, marketplace, healthcare services, and the like. Our operating discipline will continue to sharpen. After a pause in FY 2022, primarily because of additional wage investments, I expect expense leverage to continue at or above 20 basis points a year. Let me turn now specifically to our expectations for this current year. We feel very good about the underlying business and ability to compete from a position of strength. However, we're still facing similar COVID-related challenges as we have over the past several quarters, which caused us to suspend guidance and continues to make short-term guidance very challenging. Despite that, we want to give you the best view we can at this time, given what we know and what we see right now. We know we'll have both headwinds and tailwinds this year, the balance and degree of which isn't clear. As the year progresses, we hope to get more clarity around COVID impacts, vaccine efficacy and availability, the scale and duration of economic stimulus, and the midterm economic climate globally. Even if conditions stay generally similar to now, for any length of time this year and with limited additional stimulus, we would expect continued solid underlying performance from Walmart U.S. with low single-digit comps and continued solid e-commerce sales growth. Low single-digit comps would result in around a 10% comp growth on a two-year stack basis, so very healthy growth. We would expect the level of comp growth to be more heavily weighted toward the middle of the year as a result of the timing of COVID-related demand and stimulus in FY 2021. Of course, that could look different depending on future stimulus and/or significant changes in customer spending patterns as the COVID crisis hopefully moderates at some point. The comparisons against last year are unique. There were stretches that were really strong and others less so, driven by how people responded to the virus, how they stocked up, how they responded to being at home more, and of course, stimulus actions. In International, excluding divestitures, we expect to see higher level of sales growth versus the U.S., with strength in India, Mexico, and China. At Sam's, we expect low single digit comps excluding fuel and tobacco. Total company sales are expected to decline due primarily to the divestiture or anticipated divestitures of businesses in the U.K., Japan, and Argentina. Excluding that, we would expect total company sales to grow in the low single digits. From a profitability standpoint, given the assumptions mentioned earlier, excluding the impact of divestitures, we would expect operating income and EPS to be flat to up slightly versus a very strong profit year in FY 2021. In regards to the U.K. transaction, when we announced it, we said we expected EPS dilution of approximately $0.25 in the first full year, assuming we held proceeds in cash. We expect to hold more cash than normal during this time due to strong cash flow. Plan to reallocate that cash in a thoughtful way in the coming quarters into new projects, as well as share repurchase. We still expect to make up for the EPS hit in the midterm. There will be timing impacts that negatively affect FY 2022 EPS by about $0.20. However, this should provide a tailwind to EPS growth in future years as we reallocate more of that cash. Due in large part to the international transactions, we expect operating income dollars and EPS to decline slightly in FY 2022 on a consolidated basis. We expect Walmart U.S. operating income to increase in spite of some continued COVID costs, accelerated technology costs, and increased wages. Alternative revenue streams like advertising and Walmart Fulfillment Services are gaining traction and are expected to become a larger portion of profit growth in the future, including FY 2022, along with a fairly steady gross margin rate. Due to the international transactions in FY 2021 COVID-related expense and profit timing, we expect the FY 2022 quarterly profit growth cadence versus last year to be quite variable. We expect Q1 operating income to be relatively flat to last year and EPS to be flat to slightly up, reflecting the presence of Asda in our financials for about half the quarter and some tax rate fluctuations. Due to the timing of FY 2021 costs and divestitures, Q2 and Q3 operating income and EPS may be down mid to even high single digits, with Q4 operating income and EPS potentially up mid to high single digits. Again, and I probably can't stress this enough, we're in a very unusual time, causing projections, even in the short term, to be very challenging and open to significant fluctuation. Many times I get asked by analysts, investors, and others, "Are we missing anything about Walmart?" I've thought a lot about this question lately. Even for someone like me that's been here for over 20 years, I have to step back and see the evolution through a different lens. Walmart's different than it was last year, three years ago, and certainly five years ago. It's faster, it's more creative, and it's less risk-averse. It's actively creating its future by building on a set of unique strengths and capabilities. Let me describe the Walmart I want you to see. We have more customer store traffic than anyone in the world. We have one of, if not the largest pickup businesses in the world, and we're scaling delivery. We're one of the largest e-commerce companies in the world, approaching $100 billion in revenue in the next couple of years, and we believe $200 billion a few years after that. We have one of the largest marketplace businesses in the world, and now we're scaling a marketplace fulfillment services business to grow even faster. We're a majority owner of one of the most successful retailers in the world, Walmex, with over a $50 billion market cap with great growth opportunities. In India, we're majority owner of one of the largest e-commerce and payment businesses in one of the largest and fastest-growing economies in the world. We have a $75 billion club business globally, one of the fastest-growing segments in the retail industry. It's a winner in three key markets, in the U.S., Mexico, and China. We have a rapidly growing advertising platform, which should be a multibillion-dollar business in the very near future. We're a global leader in supply chain innovation with exciting initiatives on the table. We're a global leader in sustainability with a clear aspirational goal to become regenerative. We have both growth and scale. We reduced our exposures in Brazil, Argentina, the U.K., Japan, and we'll still have a top line that's over $0.5 trillion. That's the Walmart I want to make sure you see. This is the time for us to accelerate, and we are ready. As always, I thank you for your interest in Walmart, and I'll turn it over to Doug. Thank you, Brett. Thank you for your leadership and partnership. We're pleased with our results for the fourth quarter and the year. Growth was strong across the company. Innovation and speed picked up. We moved quickly to add new capabilities to protect the health of our associates, serve customers and members safely in our stores and clubs, and serve them with more capacity for pickup and delivery. We found ways to support the explosive growth in e-commerce and learned how to hire people in hours rather than days, which enabled hundreds of thousands of people to get work when they really needed it and when we really needed them. We managed our business well in an unpredictable environment. We certainly didn't get everything right. Given supply constraints, our in-stock suffered significantly during portions of the year. Store standards were impacted. We would reduce store hours and limit customer density all over again, but that did impact our sales. Those realities should provide some upside in 2021 as we lap the extraordinarily strong results of last year. I want to thank our associates around the world. They have been courageous. They are adapting to change. They worked really hard to overcome the hurdles presented by one of the most difficult periods in history, and I know they'll continue to do so. The challenges of the past year came in different forms and weren't limited to the health crisis. We're all aware of the difficult social, political, and economic realities that we face. These are deep-rooted problems that we all have to tackle. As for Walmart, we will continue to be part of the solutions. As it relates to the health crisis, we helped with PPE for healthcare workers and stood up COVID testing sites. We donated more than 625 million lbs of food and over $55 million in grants for hunger relief in 2020. Now we're supporting the country in the vaccination effort. As it relates to the financial crisis, we'll help with employment, and we'll help small businesses by buying their goods, building an expanded marketplace for sellers, and as Sam's Club serves family-owned restaurants and other small businesses. Small businesses are vital to our economy. When it comes to the social and political challenges we all face, we will engage in public conversations in ways that are thoughtful, constructive, and in line with our values. We are committed to racial equity. We'll keep changing inside our company and find ways to leverage our business and influence to shape systems extending beyond our company. This work is important to me, and it's important to our associates, including our leadership. We know it's strategic. Being diverse and inclusive is smart business. 2020 not only confirmed our strategy, it accelerated it by fast-forwarding many of the customer trends we've been building towards. We feel emboldened and are now moving with even more speed and aggressiveness. We're scaling new capabilities and businesses and designing them to work together in a mutually reinforcing way. As we imagine the future, we believe people, our customers, families, will want an even better value for their money, a merchandise assortment that is relevant to their life and seems limitless, services that help them save time, save money, and get or stay healthy, an experience that is easy and enjoyable, and the knowledge that the company they do business with can be trusted to treat everyone in their supply chain well and take actions that strengthen our planet. In the future, people will still want to shop in compelling stores, but more and more, there will be occasions where they prefer to pick up an order or have it delivered. Some customers will eventually allow us and pay us to keep them replenished in their homes on the items they routinely purchase. For an increasing number of customers, Walmart will be seen more like a service. Customers will think of us as the merchant that serves their wants and needs, but in ways that take less time and effort. We won't just be utilitarian for them. We'll serve up items and ideas that are relevant and exciting. We'll reach them directly and through other platforms. Our customer relationships will continue to broaden and deepen in health and wellness and financial services. Our customers view these as natural and expected components of their Walmart experience. We'll weave all these things together in a seamless way. We're in an early stage of building a new business model that will enable us to serve people how they want to be served in any particular moment and thrive in the next generation of retail as a business. Over time, we believe the big winners in retail will be those that deliver a unique, interrelated ecosystem. Many of you will remember the original Walmart productivity loop. We lowered prices, grew sales, and leveraged expenses. Some of you will remember the ecosystem chart we shared in 2018. Well, we continue to learn. Our thinking moves on, and so we'd like to share today's version as a way to describe our emerging business model. It should help you better understand how we'll serve customers and drive sustainable, diversified operating income growth over time. As I describe it, some of my comments are specific to the U.S., but you should think of this as applying in all of our priority markets around the world. Think about it as a flywheel that's spinning, powered by a mutually reinforcing set of assets. We start with the customer in the center. We're designing for them. Our relationship with them is founded on our ability to provide them the lowest prices on the items they buy all the time. They come to our stores and our app to get the things they want or need. Our first priority is to continue to earn their business when it's time to buy the big basket, the stock-up trip, to be the best and first place they shop. We do that well with the Supercenter format. Having a broad assortment so close to 90% of America is an advantage. As we've added pickup and delivery capabilities, we've experienced a lot of growth, but too often, we aren't able to meet the demand. This is a good problem to have, but we need to solve it quickly given how trends accelerated as a result of the pandemic. We're going to invest more aggressively in capacity and automation to position ourselves to earn the primary destination position with customers. We are absolutely playing offense here. Customers can choose to visit a store, pick up their order, have it delivered, have it delivered into a secure box on their front step, into a garage refrigerator, or all the way into their kitchen, even when they're not at home. When you hear us say delivery, define that as the combination of delivery from our stores, clubs, and e-commerce fulfillment centers. Our customers and members are indifferent as to whether their delivered items come from a store or an FC. We can optimize for speed and cost behind the scenes as we meet or exceed customer expectations. Over time, more and more of our customers will want Walmart+ because it makes life better. That relationship will drive repeat business and provide data that enables us to serve them even better and be more personalized. It's an important piece of our strategy. For now, we're focused on continuing a high-quality experience for Walmart+ members as we add capacity. Over time, we'll add more benefits to the membership to broaden its appeal. Moving to three o'clock on the wheel, the demand we've been experiencing in general merchandise is amazing. Beyond the pandemic, our e-commerce business will continue to grow at a fast pace. We expect our e-commerce sales globally to be over $100 billion in the next couple of years. We continue to add assortment and brands. Our emphasis here is on general merchandise. We've got a lot of upside in apparel, home, and hard lines. To capture that upside, we're going to pull forward investments in space and automation. As our fulfillment capacity grows, we'll use it to improve the customer experience, expand our first-party assortment, grow our marketplace, and build our fulfillment services business, which is scaling nicely. Beyond selling merchandise, we can do more to serve the healthcare needs of families. They want and need high-quality preventative, accessible, and affordable healthcare. As you evaluate our opportunity in healthcare, consider not only our pharmacy, optical, hearing, and OTC businesses, but also consider our position as the country's largest seller of food and how that relates to health. Our locations, which enable access, our large stores and large parking lots, which give us room to expand, our experience with associate benefits, where we cover a lot of lives, and our growing digital capabilities. Together, they create the opportunity for a differentiated omni-channel healthcare business that helps a lot of people. We aren't starting from scratch. We're convinced our customers want this, and they trust us to provide it. Financial services are also a way we can help make daily life better for customers. Last month, we announced the formation of a new fintech startup designed to develop and offer innovative and affordable financial solutions. Our customers have been clear that they want more from us in terms of financial services, and this new approach will help us deliver for them in a differentiated way more quickly. For a fintech startup, customer acquisition costs are high, and our platform lowers those costs. We have a head start. Moving to six o'clock on the wheel, our purpose is to save money and help people live better. We must operate at a lower cost and do it in a way that's sustainable. As you know, we've had several automation tests going on. I'm very pleased to share a few of the most important forms are now ready to scale. These investments will enable us to improve the customer experience and increase productivity. Our digital transformation continues. Our way of working, our use of data, and the modernization of our tech stack continue. Earlier, I mentioned diversifying our profit base. Scaling new profit pools is a priority. Think marketplace and fulfillment services, advertising, financial services, data monetization, and last-mile delivery. These are all early-stage businesses that are scaling or are positioned to scale. The resulting more diversified model will allow us to sustainably reinvest back into the customer value proposition and choose how much flows through into profit. As I walked through the flywheel, I mentioned several investments. Based on everything I've learned over the years and the opportunity I see looking ahead, this is the right time to make these investments. The strategy, team, and capabilities are in place. We know where the customer's going. We have momentum, and our balance sheet is strong. Here's what we see. First, the combination of stores and e-commerce is a winner. Last year step changed our e-commerce business, and our stores are an asset. We have demand and need more space earlier than we had planned a year ago. Given that delivery is a key driver of Walmart+, we need more capacity to grow Walmart+ with a high Net Promoter Score. Second, our automation plan is now ready to scale. We'll be investing in our distribution centers, our e-commerce fulfillment centers, and in market fulfillment centers, which will, in many cases, be inside of or built beside our stores. John will tell you more about what this means for our U.S. business. Those investments will enable productivity improvements for years to come. They have a nice IRR. Big picture, think of our U.S. supply chain with hundreds of distribution and fulfillment centers, thousands of stores and clubs so close to so many people, functioning in a hybrid fashion, automated where they should be based on volumes, and complemented with on-site market fulfillment centers or off-site MFCs where we see incremental demand. Importantly, imagine our supply chain is interconnected so the cost to meet or exceed customer expectations is optimized. Imagine our growing network with a next-gen level of automation. I think the next few years will represent more change in our supply chain than even the grocery DC rollout we did to support Supercenters. It's really exciting. We'll keep investing in store remodels so that our stores are fresh and appealing. We'll also continue to invest in our people. Last fall, we changed the structure in our U.S. stores, leaning even more into teams. At that time, we gave a raise to 165,000 people. Now we'll be raising wages for 425,000 more. These are investments in people that are important to our future because they provide a great pickup, delivery, and in-store experience for our customers. These investments are part of a strategy we've pursued since I started in this role. We've increased our starting wages by more than 50% since 2015. Once these increases are implemented, approximately half of our U.S. hourly associates, about 730,000 people, will earn at least $15 an hour. Our average wage in the U.S. will be at least $15.25 per hour. Our supply chain associates are already earning $15 or more, and we've made additional wage investments in Sam's Club over the last few years. Importantly, in addition to hourly wage rates, we'll continue investing to provide career opportunities through our internal education programs and access to affordable degrees. Because of technology, the future of work will be different, and we want to prepare our associates for that journey. We believe we should do more than provide just an hourly wage. Bonuses for some roles, our 401(k) match, stock ownership plan, affordable healthcare, and other components are smart investments. We'll make these investments in our supply chain and people while also staying on track to modernize our technology. To pay for all that, we'll keep growing sales, expand our general merchandise business, and scale mutually reinforcing and profitable businesses. The guidance that Brett provided this morning includes these investments for these areas I've just described. One way to think about us is to recognize our people and physical assets as strategic moats and realize that we're changing how we think and work to build digital products and related businesses that complement those assets and have helpful margins. Marketplace, advertising, and membership income, for example. We aren't strangers to membership. Sam's Club in the U.S., China, and Mexico is performing very well, and that performance accelerated during 2020. Sam's is innovating, adding new capabilities, and improving our merchandise offer, especially in fresh food and with our Member's Mark private brand. Sam's is a big business for us, and it has strong momentum. As I mentioned before, this mutually reinforcing flywheel concept applies in our priority markets outside the U.S. Specific elements of the flywheel, such as pickup and delivery, e-commerce and marketplace, fulfillment services, payment and other financial services, and advertising have application in Mexico, Canada, India, and China. The same flywheel assets are adapted to be relevant to the specific needs of the customer in each market and to leverage our different operating models. Let me focus on Mexico and India for a minute. We see an opportunity to grow e-commerce market share in Mexico. Our stores business is strong. An omnichannel approach will be a winner in this market. Our Walmex team has done a great job of growing e-commerce, including a strong same-day delivery option from stores and clubs. The pandemic had a similar impact to customer trends in Mexico as it did in the U.S. Now the next step for us is to leverage the momentum we have to grow 1P and 3P e-commerce through investments in technology, supply chain, and customer acquisition. The team is building alternative income streams to complement our traditional retail business, including advertising. In India, our momentum and potential for growth make this a unique opportunity. E-commerce penetration is still low but growing rapidly. We're well-positioned to grow as an emerging middle class spends more money through their mobile phones. Like the U.S. and Mexico, this is a market where we'll step on the gas to ensure we have the appropriate level of investment in areas like supply chain. The PhonePe business continues to grow and perform very well. These are homegrown businesses with innovation and problem-solving for the Indian customer at their core. We continue to be impressed with Flipkart and PhonePe talent led by Kalyan and Sameer. You'll hear from them along with Judith in a little while. I've talked a lot about investing for growth. I also think it's important for us to call out the areas where we're narrowing our focus and making choices. We're deploying capital to areas where we see the best opportunity for growth while pulling back in other areas. Over the last few years, you've seen us divest restaurants, an apparel specialty chain, banks, Vudu, and e-commerce businesses and brands, along with markets like Brazil and Argentina. We've announced new ownership structures in the U.K. and Japan, moving us to a minority position. We've executed these decisions to narrow our focus while also developing important partnerships to drive growth, like those with JD.com, Dada, Aditya Birla Fashion and Retail, and Ninjacart. We're being deliberate about where we invest, where we divest, and where we partner. We're a good partner, and we're flexible. In order for us to pull all of these work streams together into a cohesive, well-executed strategy, the organization has to think and work in new ways. Think about it as an enabler of our strategy. Whether it's moving to an agile way of working, prioritizing digital acumen and diversity in our talent base, or developing new ownership structures around the world, we will function in a way that supports innovation, speed, and productivity. Our product teams and technologists are working hand-in-hand with business leaders every day to develop and deploy the right products at the right time for our customers and associates. The tech team we've assembled is working to take our technology to the next level. We'll do the things I've described while staying true to our purpose and our core values, and while taking a shared value approach. The best way to create a valuable company is to build for the long term, manage the short term, and serve all the relevant stakeholders. We're systems thinkers. We connect dots. We design sustainability into our holistic supply chain and save money doing it by eliminating waste. Environmental, social, and governance issues aren't side projects. They are strategic, core, and part of our culture. Aspirations push us beyond sustainability. This is a holistic approach that supports and replenishes humanity and nature. Regeneration means renewing and replenishing in addition to preserving and doing less harm. Our target of zero emissions by 2040 with no offsets is an ambitious and motivating challenge. We believe it's important to push towards zero in our own operations, even where it's difficult and may not be feasible with current technology. Our push will help drive necessary innovation. We'll lead where we can and help make possible what's not currently possible. Climate change remains at the forefront of our ambitions on regeneration. You've heard us talk many times about Project Gigaton and our efforts to reduce emissions in the supply chain of our business and those of our suppliers. To date, suppliers have reported a cumulative 375 million metric tons of avoided emissions. We're well on our way to our goal of avoiding 1 billion metric tons of emissions. In summary, we are confident in our strategy. Now is the time for us to be aggressive. Speed matters. We're going to keep the customer in the center and design for them. The new business model we're building will allow us to thrive, to reinvent. There is so much opportunity in front of us. Our associates, including our leadership, are the reason we have so much confidence. Sam Walton was described as a merchant with a servant's heart. Our associates are continuing that legacy. Thank you for your attention. In a moment, we'll begin the first of two Q&A sessions. Brett and I will take your questions about what we've shared so far. You'll hear more from the team. Thank you for joining our Q&A session this morning. As a reminder, if you have a question, please click Raise Hand. You can find this under the Reactions or Participants button. When the host calls upon you, click the Unmute button that will appear on your screen, and then you may ask your question. We'll take a moment. Our first question will come from Peter Benedict at RW Baird, and after that, we'll go to Paul Trussell. Peter? Okay. Dan, thanks. Can you hear me? Yeah, we got you. Yep. Oh, okay, great. Hey, guys. Thanks. I guess two-part question here. First, just on the higher capital spend, maybe can you tease that out a little bit more, Brett, maybe some of the components there, what areas of the business are getting how much? Then as you think beyond this year, you talked about the 2.5% to 3% of sales. Are there certain areas that will get more of that versus less? Kind of what continues beyond this year? I guess related to that, on the U.S. wage investment, when do you think your U.S. associate base should all be making at least $15 an hour? Is there a timeframe we should be thinking about for that? Thank you. Peter, thanks. I'll kick off. On capital, as I mentioned in my remarks earlier, we're going to lean into the places that we've talked about from a strategic standpoint, really for several years, but definitely this morning. We'll lean in more particularly on supply chain and e-commerce. Peter, you've been following the company for a long time. If you go back several years, we were spending 50%, 60% or more of capital on new stores. Now that's turning toward ensuring we have the right amount of capacity we need to fulfill the customer's desires as much as in the way that they want to be fulfilled, also getting it to customers more quickly. Those are the kind of things that we're going to be focused on. In innovation, there's so many things that are going on from an innovation standpoint in supply chain. We've been on the front edge of that, Doug, in thinking about how we get pallets to stores and how we make it easier to pick in the back rooms. Those are the kind of things over the next few years where you're going to continue to see us lean in, globally, not just in the U.S. Yeah. Good morning, Peter. I'll just add that I'm really excited that we're now to the point where we can invest in some of this automation. I know you've been following this closely. We've been working on this for a while. Now we've got these various forms, distribution center technology, fulfillment center technology, store-level market fulfillment center technology, that we can start to really scale. That'll take a few years to roll that out. We like the customer experience benefits. We like the productivity improvements that we're going to see. This year just really fast-forwarded things in terms of customer behavior. We think the vast majority of that behavior is going to last, and it's terrific that the automation we've been working on is now ready. Maybe if anything, I wish it'd been ready a year ago, but at least we're there now, and we can get going on it. I'm really excited about that. As it relates to associate wages, the approach that we have been trying to take for years now is to make sure that we're creating this ladder of opportunity, providing an opportunity for people when they start with the company to build a career like so many of us have. The investments that we're making right now are aimed at this new structure that we've put in place. It's even more of a team approach to getting the work done across the store that needs to get done. Obviously, picking in the store has become really important. Managing inventory is obviously really important, and this new structure's going to help us do those things more effectively, and those people that we're raising wages for tend to have been with us for a longer period of time than someone that might be earning the entry wage. We're trying to move that average up, create that ladder, and continue to have associates that come through our system and become store managers. We've got about 75% of our store management that starts as hourlies. The alternative would be to invest all of that to try and get to $15 faster. If we do that, we wouldn't be able to create this succession that we're committed to creating. We will raise our starting wage rate over time. I think our history proves that. I mean, we've gone since 2015, from $9 to $10 to $11, we're up over 50% in our starting wage rate. We will be sensitive to geographies. There are parts of the country where the starting wage should be lower than others. We're obviously really well aware of what's happening nationally with this discussion around $15. Think that that's an important target. Also think that that should be paced in a way that's good for the U.S. economy. You can kind of see us as a model working through how that works. I'm really excited to raise the wages today for so many people. Great. Thank you, Peter. We'll go to Paul Trussell at Deutsche Bank next, and then Karen Short after that. Go ahead. Good morning. Thank you for the color, and especially for the willingness to provide guidance, in a volatile and dynamic backdrop. Guidance is really where my questions lie. Brett, to the extent you can dig deeper, can you just help us a little bit more on some of the many moving parts in looking at your fiscal 2022, just how best we should think about the impact of the U.K., Argentina, Japan, wage investment, COVID costs, just as best as you know today. Doug, as you kind of still expect the top line in the U.S. to remain positive despite the tough compares, just discuss what's driving that confidence and what the digital contribution to that growth looks like. Yeah. Paul, it's good to see you. You almost answered your question as how you were asking the question. As we were talking through, as you can imagine, talking through wanting to give guidance this year because we want to give you the best view that we have right now, knowing everything that we know. We know less than we typically do in a normal year about what's going to happen with the vaccine, what's going to happen with economies, what's going to happen in other parts of what's going on. We've tried to raise up the guidance a little bit and to be fair, to give you a little more high-level guidance than we have, and so getting to the individual pieces and talking about any of those specifics would be pretty challenging. If you look at even the top-line guidance we've given you as close as we can without divestitures or excluding divestitures. We're trying to give you apples to apples. With that, we think low single-digit growth for the company and Walmart U.S. is possible, and you've got stimulus plans and other things that are sitting out there. Even with that, Walmart U.S. would have a 10% two-year stack. It'd be very healthy growth. Same thing on the EPS and operating income. We're trying to give you apples to apples as if Asda and Japan and all that are still in the business. Obviously, they're not, and there'll be an impact top line and bottom line from that. I know you appreciate the situation that all of us are in with COVID, and we wanted to give you as good as guidance as we could right now. As it relates to U.S. growth, Paul, obviously, there's a lot of variance week to week, month to month, quarter to quarter, and I'm sure every retailer, and we certainly did, kept a really good diary about what was happening every day as we went through that year. Just looking back on all the things that happened even in February and March a year ago is a long list of activities, things that occurred in the environment and decisions that we made. Many of those decisions restricted sales in our stores. We changed hours. We metered how many people could be in the store. Obviously, we were hit hard from an in-stock point of view. Normally, it's a great thing to have inventory turns, and we were managing our supply chain well, but we didn't have these huge stockpiles sitting to the side for the surges that we saw in things like consumables. I've never seen anything like what happened in our stores as we went through the year, and it was a real challenge for our associates. Our store managers, our assistant managers, our associates deserve so much credit for being able to adapt. Some of them were on leave. We had people join the company. We hired over 0.5 million people during the course of last year to help fill in for those on leave and to react to the additional demand that we had for pick and delivery. Imagine being a store manager, dealing with a lot of associates without much experience. We've got all these things underneath the surface, in-stock, store hours, associates that were less experienced. All of those factors cause us to think if things continue to improve, the vaccine rollout continues, people start to come back out. People will come back to Walmart that may have been shopping locally because they were trying to manage the COVID situation carefully. We've talked about our market shares as we've gone through the year. We think we've got an opportunity in food and consumables to grow market share this next year. Those are the kinds of things that cause us to feel like it's appropriate to forecast that increase in sales and then go earn it. There will be a lot of volatility quarter by quarter, and we'll just do the best job we can, Paul, of explaining what we're seeing as we go through it. Thank you, Paul. Next, we'll go to Karen Short with Barclays and then to Simeon Gutman after that. Hi, thanks. Can you hear me? Hi, Karen. Hey there. Yeah, thanks so much for all the color. Really helpful. I wanted one clarification just on the EPS. We use 528 as the base, correct, in terms of flat to slightly up? The bigger question I had was just on the U.S. operating profit in general. When I kind of do back of the envelope math on the employees getting a wage increase, I get kind of close to 14% impact to operating profit in the U.S. You've obviously guided to slightly up operating profit in the U.S. Maybe can you parse that out a little bit more? I know you've guided to up sales, so they're up comps in the U.S., so that's a component of it, but maybe a little color on that, because that 14% hit, it seems like a fairly large lump to overcome to still have the U.S. be up. Sure. I'll walk you through that. On the EPS, you're correct. The $0.20 that we've talked about is related to Asda. There'll still be a little bit of impact from Japan because that is accretive as well, assuming we get that transaction closed in the next few weeks. The way you did your math would be accurate. On the U.S., there's a lot changing in the P&L. One of the things over the last several years is we've had gross margin that has decreased fairly significantly as we've invested in price and done other things. Now, as we have price gaps in a pretty good position, certainly versus where they were years ago, the way that we're able to move product, we're getting efficiencies there. The new income streams that you see us having, the general merchandise business, which has improved, that helps mix. E-commerce contribution margin that continues to improve. All of that helps gross margin. In the past, where you were starting with gross margin going down fairly significantly at times, that's really not the case probably as we look forward. On the expense side, do have increased wages, but you also had significant COVID costs this year and other things that hit the expense line. When you balance all of that out, and again, Karen, we're giving you the best view that we can, we do think that Walmart U.S. can continue to grow operating income. There's just a lot of things inside of that. It's helpful to have the e-commerce improvements that we saw. Brett mentioned the contribution profit improvement. That's driven through apparel and home mix and other things, including the fact that we finally put our merchant teams together, and John and Marc worked really well with the merchants, Scott McCall and others, to help people come on board and take on that additional responsibility in a way that's been helpful. The volume growth leverages fixed costs in a different way. As you've heard over and over again, a lot of things just got fast-forwarded and changed the shape of what we're looking at. The additional revenue streams that we've been talking about and we will talk about even more this morning, advertising, financial services, marketplace, those things that really weren't large businesses at all, they're growing and they're scaling and they're becoming a bigger part of the Walmart U.S. P&L. That's a positive. Thank you. Thank you, Karen. Next, we'll go to Simeon Gutman with Morgan Stanley, and then we'll go to Bob Drbul at Guggenheim. Hey, Simeon. Good morning. Thanks for taking my question. I first have maybe a two-parter for Doug and then a one part for you, Brett. Doug, you mentioned balancing and managing all the interests of stakeholders, and you guys have done a good job of that over the last few years. This is the why not invest more upfront in this year? How much of a debate is that? Can you tell us how much of this investment plan is new, or is it pulling forward what would've been a 5 or 10-year plan? To you, Brett, thinking about fiscal 2023 and beyond, I realize you gave a construct. Is the leverage point of the business or, again, of a retail business increasing such that you can't get higher incremental margins over time? For some of those things you just mentioned, plus advertising, it seems like the incremental margin should get better, especially as you invest in supply chain and get more efficient. You said roughly in line EBIT growth to sales. I'm sure it's far out, so you're being careful, but why shouldn't we expect higher incrementals over time? You want me to start? Do you want to? I'll go first. Okay. When you think about why not more, the two pieces that go through my mind are the automation investments and then the wage investment. On the automation side, I think we're going as quickly and as aggressively as we can and should go. These things will take some time. If we find that it's working really well and we can go faster, I'm going to be in the camp of wanting to go faster because this looks like it's going to be really great for our supply chain, great for customers, great for the company from a financial point of view. On the wage side, we've been on a path. We've got a strategy, we've got a plan, and we're executing that plan. You'll just see us continue to make investments at the right time, we think in the right levels, while also investing in automation to help with productivity. We're trying to play a harmony here and balance these things together. One of the things I'm excited about, by the way, is that as we've been changing, we've been able to add a lot of jobs, which I think is great. It's great for the economy. It's great for people to have employment. Automation historically tends to change work and create new opportunities. I think that's what we're seeing. The number of people that we've hired to pick orders in stores and the number of people that we'll need to run the automation investments that we're making, there's going to be opportunity for folks. We're trying to craft this whole approach with not only hourly wages but what we do with benefits and incentives, what we do with healthcare, what we do with 401(k) match, and all of those things to retain people in a way that you get the highest level of productivity because people are bought in on what the company's doing. We think we're doing this strategically at the right pace as it relates to the wage investments. I think the one place where we could go faster, if it all works, is automation. It is a pull forward. We were planning on doing these things. I think two things happened. One is the pandemic changed behavior faster than we would've had in our model. Secondly, it just so happens that two or three of these kind of came together in a way that they're ready to be scaled at the same time, and that's great. Yeah, Simeon, the way you're thinking about the profit algorithm is right. I've said in my comments that this company looks pretty different than five years ago, and five years from now, it's going to look different again. The comment I made in the remarks was that I do think operating income should grow faster than sales. As an executive team, as we talk through these investments, making these investments, that's what we think we should do. When you look at our ability to generate revenue and profit in different ways, if you look at a general merchandise business that's growing and changes the mix, as you look at contribution margins in e-commerce changing, all of that leads you to believe that operating income can grow faster than sales in the mid to long term. That's what we expect to do as a company. Absolutely. We want that to happen. We think that will happen. We've got a path to make that happen, and it's cool that it's happening in a different way that's sustainable and more digital in nature. We've become more of a digital company, and that's important in the way that customers live and work and behave these days, and the way you can stitch things together. I remember growing up watching other retailers, Sears comes to mind, that diversified, and learning in business school that there were mistakes made. Looking at what's happening today and what we're trying to do, the thing that's different is technology. The internet is different. Digital is different. The way you can stitch these things together is different. When I look at the flywheel that we showed you a few minutes ago, I get really excited about the arrows that connect the dots. If we can design these things in a way that we become more of a default for certain aspects of their life because of the way we've intuitively designed things, that's where the magic can really happen. That is possible today because of digital and technology, when it wasn't years ago. CFOs don't get excited very often, but as I see this business model shaping up, it is really exciting. It's a really different look to the company. It's great. It doesn't feel like we're getting too far away from core. I'm not worried about it. Yeah. Yeah. That's what's so exciting about it. We've got a team today that thinks that way. Some of the talent that's been with us for a long time, as well as some new folks. Thanks, Simeon. Thanks, John. Next, we'll go to Bob Drbul with Guggenheim, and then to Steph Wissink at Jefferies following that. Morning, guys. I just got a couple questions. I think the first one, on the flywheel, Doug, you talked about the flywheel a little bit. Can you just talk about how you think it will evolve with the new businesses that you're adding beyond what you showed today? Can we start with that one? Well, Bob, if we were ready to talk about that, we would've gone ahead and told you that that was what we were planning. It's obvious that as you put the customer in the middle, you put families in the middle, and you think about the opportunity you have, if you're the one selling them the items they buy all the time and serving up the items that they might love to discover, it just creates all kinds of opportunity. I think financial services as a suite is one example. Healthcare leads you in a lot of different places. The idea that we could help people with healthcare in a way that makes healthcare in the country more preventative, certainly high quality, affordable, accessible, is something that I think not only opens us up to all of the industries that make up healthcare, but also helps with their overall relationship and the way that people think about Walmart. That could lead us in a lot of different directions. The other one that comes to mind that was on our list, but we didn't talk a lot about it, is data monetization. Data's obviously really valuable. We've got a history of giving our data away to suppliers and doing that so that we could get in-stock. That's obviously really important. Some portions of our data will continue to be free because we need their help serving our mutual customers. There are other aspects of our data that are really valuable and can be put to work in ways that we haven't before. The concept of building products, digital products, that we can use internally and also monetize outside is a really exciting prospect. Some of those things will be purely digital, some of them will be a combination of people plus digital. Think of Last Mile, for example. This advantage that we have with Supercenters so close to people can be monetized in ways that we haven't before because of the speed it provides and the relationship that it provides. I think in future years, just as we did today, we'll show you this evolving business model and show you new things, and in some cases, we may tell you, "This one didn't work. We're taking it off. We're adding this one on." I think that's how it should be, frankly. Go ahead, Bob. We still see you. Sorry. Yeah, just working the mute. Two questions for Brett, really. I think the first one is, can you talk about your price investment flexibility? There's been a lot of discussion from the CPG companies about taking price and their ability to take price. How do you guys fit into that, and how are you thinking about it? The second question, I think also for Brett. With the cost of debt being where it is, can you talk a little bit about your willingness to perhaps maybe take on some debt for additional share buyback, or any thoughts around that would be helpful. Thanks. That'll be it. Yes, on price, I said our price gaps are really as good as they've been. In some cases, higher than they've been. We're going to continue to be the price leader in markets. It's really important to what we do. It's important to our customers, and it's part of who we are as a company. We're going to be thoughtful about it. We're going to be strategic about it. We want you to come in, and as a customer, as you get a basket at Walmart, we want that to be the best deal you can get as a customer. That's who we are in EDLP. Can I just add that John and Scott and the team are thinking about rollbacks. There are going to be times this year that are going to be difficult for families, and we've got this history of creating rollbacks and lowering prices, and some of those plans are in place with the guidance that we gave you earlier today. Your question on capital obviously is a good one. We just announced the $20 billion share buyback today that we think we'll execute over the next three years or so. We're in an enviable cash position because of the cash we've generated, because of the execution now of the Asda transaction and cash coming in. It's okay, I think, to hold a little more cash right now. We always look at share buyback. The first thing we want to do, Bob, and you've seen it this morning, is we want to invest in the business. That's the first thing we always want to do, and I think we're doing that to the extent that we feel like we need to execute our strategy. Our dividend, we just increased it 48 years in a row. Then you get down to share buyback. I feel good about our company. I feel great about the valuation of the company. You'll continue to see us, as you can tell by what I said this morning, pretty aggressive from a share buyback standpoint. Thanks, Bob. Next, we'll go to Steph Wissink at Jefferies and then Michael Lasser after that. Good morning, everyone. We also have two questions, if we could. Doug, the first is for you. I was really struck by the language you were using around shifting from an option for your consumers to being their preferred choice or their preferred destination, primary destination. Can you talk a little bit more about how you energize your teams to really think about Walmart as the primary destination? Maybe give us a little hint on Walmart+, where you are in some of the learnings around that. Brett, a question for you, and maybe this goes back to an earlier question on the incremental margins. If I'm hearing you correctly, you're past fiscal 2022, expanding margin leverage from an expense perspective, expanding margins on the growth side from a mix and from the alternative streams of value perspective. How should we translate that into the flow through to operating margin? Something better than that 30, 40 basis points a year? Thank you. Yeah. I'll go first on primary destination. The Supercenter does a great job of doing that, and I always think of what it was like when I was a teenager and my mom was headed out the door and she would say, "I'm going to Walmart. What do you need?" I didn't really think about it then, but looking back on it now, the fact that she didn't say, "I'm going shopping," or, "I'm going to the grocery store. What do you need?" She said, "I'm going to Walmart." She bought everything that we could possibly buy at Walmart. So many Americans and people around the world do that today, and that's obviously really important. We didn't get that done in e-commerce in early stages. We weren't the first place you go when it's time to buy products online. We're trying to change that, obviously. You got to earn that. You've got to have the assortment, you got to have the price, you got to provide service, you got to deliver when you're supposed to deliver. All of those things have to be done, and it takes some time to build those kinds of capabilities. As we're building that, the opportunity that we have is in the way that we put them together. If the combination of the Supercenter stores, Neighborhood Markets, in some cases, Sam's Club, and the internet can cause Walmart in the omni-channel future to continue to be primary destination, that's obviously the number one thing that we would want to get done, and that's a priority for us. Once you have that, and that doesn't mean it's just food consumables. People are buying a lot of hard lines. They're buying general merchandise. Our general merchandise share went up this past year, driven largely by what was happening in stores. E-commerce obviously grew at a higher rate, the store volume was amazing. If we can get that done, it opens up all these other opportunities with the flywheel, as we were discussing earlier. Walmart+ is a component of that plan, the number one aspect of the three dimensions we've got today for Walmart+ is the delivery of items from our Supercenters. E-commerce deliveries are important, the Supercenter perishable assortment is obviously really important. We've got a limit on how much we can pick and deliver from stores. The automation that we're investing in will help change that, the other capacity choices that we're making will help unlock that, which will enable Walmart+ to grow more. We don't want to get ahead of ourselves and go sell too many Walmart+ memberships and have a customer experience that is less than our expectation or their expectation. Net Promoter Score is a key metric, for example, that we keep our eye on. Walmart+ will grow, and there may be some things that we add to it over time that are more digital in nature that enable even more membership growth. When I think about Walmart+, the thing that I'm focused on most is the Net Promoter Score of a Walmart+ member, not the number of memberships that we're selling. The number of memberships will work out, but let's focus on quality as we start to scale it. Walmart+ unlocks data that we can use to serve up items for customers more effectively, which helps us with margin mix. That's important and something that over time will matter to the company. We're not great at that today. It's a skill we're learning. I think in the future, it'll be even more important to the company. Yeah. The construct of the P&L, as you can imagine, is pretty near and dear to my heart, and it's been fun to go through the last several months with the executive team. Again, I said in my comments, even somebody who's been here as long as I have, you have to step back and realize how many levers we have to pull as a company. Now we're in higher growth markets in international, and we're investing in e-commerce and exciting things in international. We're growing at Sam's. There's all these levers that we can pull. The good thing about that is that there may be a year we pull this lever, maybe a year we pull a different lever, maybe a quarter we pull a lever, a quarter we pull another lever, but it all works. When you look longer term, where we're really trying to control our own destiny is really important, is we've been focused on operating discipline on the expense side, and we've made progress in that regard, and I still think that's going to happen longer term. I feel very confident about that. These new revenue streams or growing revenue streams and profit streams are a big part as well of giving us a different way to make money that just frees up even more levers and gives the company more optionality, which is so important. We talked about sales growth of being over 4% into the future. That helps a lot with every data point when you can get sales growing like that, because even at the same operating margin percentage, you can just grow dollars, and that's really what the productivity loop was all about. Yeah. There was a time when I think a lot of people thought, given our scale, that we could only grow 1% or 2%. Even before the pandemic, we had proven that was not the case. If you do what customers want you to do, you can grow the top line, and then you can manage the bottom line. We think what we've put in place the last few years, I'm really confident, will help us for a generation. That's what we're out to do. We're out to position the company for the next generation of retail. We think because of omni and because of our culture and because of our progress in technology and mindset shift, that we've got the opportunity to do that. We'll manage the short term, but we're building for the long term. If these things come together the way that we believe they will and the way we've planned them, it does give opportunity for that operating margin to grow over time. Some of those things are scaling now. As we talk about fulfillment services and advertising and some of these other things, two years ago, we were just getting started, or 18 months ago. I think PhonePe's only four or five years old. Some of the numbers Judith was covering, I was like, "Really?" It reached that scale in, like, four years. Several years ago, we weren't even talking that much about a pickup business, which is huge today. Right. When I look at our situation and our flywheel, I don't feel like there is anything speculative in it. We've got traction on these things. It's just that they're smaller. The ability to grow them seems apparent if we just execute, and we can execute. Thanks, Steph. Thank you. We'll go to Michael Lasser with UBS next, and then Robbie Ohmes after that. You have to unmute, Michael. Michael, we can see you, but we can't hear you. The most uttered phrase these days, "You're on mute. Sorry. Thank you. Thanks a lot for taking my questions. Can you more deeply connect the investments that you're making this year and how they're going to allow Walmart to generate that 4% top-line growth that you're expecting? Especially because one could argue that these investments are necessary just to keep up with the changing environment. For instance, does this mean you expect to be able to maintain 20%-30% e-commerce growth in the U.S. business, even as you generate stable to improving sales in the U.S., and why? As part of this, do you expect that the wage investments to yield as much of a return this time around as they might have last time around? Whereas last time, you were a bit more proactive, and this time, the environment's a little different. I have a follow-up on the guidance for this year. Yeah, I think the wage investment will pay off and if you're one of those 400,000 people that we're talking about today, your attitude about Walmart, the way you're feeling today is different. We're asking them to do work in a different way. We're asking our associates to adapt, I think the investments we're making in them correspond to that. I do expect a nice return from those investments. It'll help with retention. It'll help with them being able to do their jobs at a really high level of productivity. I am a little distracted by Michael's lack of an ability to shave. I'm worried about our razor sales. I'm sorry, I could not get that thought out of my mind. Times are tough. We sell a lot of razors on the app, Michael. You can give [audio distortion] I'll be there. I know there's a lot of folks. We haven't seen some of you in a while. I look forward to when we're together in person. It's a challenge to do all this virtually. As it relates to the 4% growth, we just have a lot of opportunity with e-commerce. We're not good at it yet. We're adding assortment, we're adding brands. Things are scaling. The marketplace is scaling nicely. We need more investment and capacity to have the fulfillment service achieve its potential and serve customers as well as ultimately we must. I think the investments that we're making are going to create upside, which should translate into not just keeping up with market growth, but exceeding market growth, building on the other relationships we have with customers, including the one that's most important right now, which is the one in our stores. One thing too, Michael, if you think about now the international markets that we're in, they're, for the most part, higher growth markets than the total that we've had over the last several years. That helps as well. My follow-up question is, as you pointed out at the outset, there is a lot of uncertainty with trying to project sales this year, and this is happening at the same time that you are making these sizable investments. If your top line result is a little bit lower than you expect, do you see outsized deleverage in your P&L, or is there room to preserve your profitability such that we should think about while there's uncertainty with the top line, there is less uncertainty with the bottom line for this year? Yeah. There's some room, and we'll manage the year as we go through it as best we can. We've got, as Brett and I talk about all these levers all the time, and gross margin's one of them, but I wouldn't want to do anything, Michael, that harms the business or slows down the strategy beyond this coming year. I think we're going to be fine this coming year, and we've done the best job we can of describing to you what we see, but the decisions we're talking about mostly today are not aimed at the next 12 months. They're aimed at the next few years, and we won't lose sight of that. We'll stay on track as it relates to those kinds of things. Thank you, Michael. Thanks, Michael. We'll go to Robbie Ohmes with Bank of America next, and then Seth Sigman. Sorry, guys. Can you hear me? Hey, Robbie. We're good. Great to see you. A couple questions. I guess, for you, Doug, I was hoping the multi-billion dollar ad business in the near future, I was hoping you could maybe talk about, that's a little more than I was expecting. Where's the confidence come from? I don't know if you can weave into it the TikTok situation. Is there anything you guys learned from that situation about where Walmart fits in within this social media platform world that you can share with us? I'll ask my separate question for Brett after you answer that question. I think as it relates to advertising, Robbie, we've got a unique opportunity because of our stores. We've got all of the things available to us related to e-commerce growth and digital growth, the reporting we provide for the investors in our advertising program is there. We can show you that down the road, if a customer decides to come into a physical store, our store, and buy it, we can connect those dots for you. That's the unique proposition of our advertising program. We just haven't been that aggressive with our site and app. We want to preserve the customer experience when they're looking for an item and not have ads clutter that up in a way that is going to detract from the experience. We're going to manage that as we drive the growth up. As I mentioned before, there's just a ton of traction there. What's happening with social commerce is exciting. It's been nice to have assets around the world, including in China, to learn from how people are behaving as it relates to social commerce. We think we've got an opportunity to partner in different ways with different people to connect the dot on commerce, because sometimes a marketplace approach to a front end that's driven by advertising doesn't result in the best customer experience because of lack of fulfillment or other components that make up a great, seamless, fast, simple experience. The TikTok livestream that we tried, I think attracted 700,000 people, and that happened kind of quick, and I think we can do an even better job of bringing attention to events like that when we want to. The team's learning, and I think in six months, 12 months, we'll look back on social commerce, and we'll see more traction, and we'll see Walmart playing a role in that. In some cases, that'll be just a simple partnership, and we'll work out the terms of that partnership. That's what I think you can expect from us as it relates to that. There is a connection back to advertising. I think our mindset needs to be, we're retailer first, commerce first, serve the customer first, and all these other things that flow from that, including the monetization of data and advertising, will be secondary and tertiary to the number one thing. That's helpful. Thanks. Brett, I was hoping you could, if you take the U.S. e-commerce business and take away alternative profit streams and just look at the profitability per transaction across the U.S. e-commerce business, how did that look this last fiscal year versus previous years? Maybe automation and a lot of these investments you're making, do they improve the profitability of the transactions, or is that more about driving revenue growth in digital? Yeah. Robbie, we've talked about several things over the past few years, several things we look at when we look at that e-commerce P&L, which is a very integrated part of the U.S. P&L. We look at contribution margin, and this year has improved the years before that. That's a big reason of why we've seen losses reduced in the U.S. e-commerce business. Also on the logistics side, the cost to ship, the variable cost to ship, has continued to improve. These investments are, I would answer yes to all of what you just asked, is they are there to drive revenue. They're there to drive efficiencies. They're there to drive better customer service, better customer experience. It's all of that, and that's what's great about these investments, is there's all of the pieces that we need from the e-commerce business, it fulfills that. The growth in marketplace was a big deal too. The first-party contribution profit got better, then marketplace scaled, which helps blend the whole thing together. Robbie, it's kind of reminiscent of how we managed mix back when I learned merchandising to begin with. We had items that we made higher margins on and items we made lower margins on. Today, we're just doing the same thing. It's mix management. We not only manage category mix, but we manage channel mix with 1P, 3P, all the components that we're talking about, which I think is helpful, as it relates to our structure now. The omni-channel approach gives people an opportunity to manage things across, and that's how they should be managed. Thanks, Robbie. Thanks, Robbie. We've got time for just one more question. We'll go to Kelly Bania with BMO Capital Markets. Hi, Kelly. Hi. Can you hear me okay? We can. Perfect. Just wanted to ask another question on U.S. e-commerce, maybe following up a little bit from Robbie's question. When we look at U.S. EBIT dollar growth, it was about $1.6 billion-$1.7 billion this year. Can you just help us understand a little bit the magnitude that the improvement in e-commerce losses contributed to that? Could it be a third or more? I guess, Brett, you talked about reaching maybe $100 billion globally, I think that was, in e-commerce over the next few years. It sounds like maybe 15%-25% growth. Can you talk a little bit longer term about what mature margins could be there? As you think about advertising, financial services, marketplace, what is part of that as you think about U.S. e-commerce margins, or maybe those are separate. There's a lot in those questions, Kelly. As you look at the profitability increase in Walmart U.S., particularly this last year, there are so many pieces of that. There's improvement. Obviously, 8.6% comp sales help a lot all the way down the P&L. Gross margin rates with improvement in mix, as Doug was talking about, general merchandise. We had a lot of increased costs, over $4 billion in costs globally as a company related to COVID. It's a little tough to parse out all of that. The e-commerce business is becoming even a more integrated part of what we're doing in the stores. E-commerce losses did improve significantly during the year. As we think about going forward, what I'd said in my remarks is that we expected $100 billion in global e-commerce over the next couple of years and could see $200 billion a few years after that. I'm going to go back to the comment I made about levers. We certainly think about and we know the pieces of the business and what the profitability of is each one. That's important. We are looking at that total and how do we grow the total. We wouldn't be going into any of these businesses if we didn't think they weren't going to be profitable long term. Each business serves a purpose, and it serves potentially a different purpose at a different time. All of this goes into how we think about our financial algorithm. Having that 4% top-line growth, having operating income grow faster than sales, that's the algorithm. How we get there can change over time. I think that's great that it can change over time, that we have that flexibility to do that. Thanks, Kelly. That wraps up our first Q&A session. We're going to take a brief 10-minute break and then we'll resume our program. Thank you. [Break] Good morning. I've never been more proud to talk about what's happening in the U.S. Let me start by thanking the team, our store associates, our people in fulfillment and distribution centers, our drivers, our technologists, and corporate associates. Our people stepped up these past months like never before, and they helped their fellow Americans get food, medicine, essential supplies, gifts for holidays and birthdays, and even items to start new hobbies. Now they've distributed COVID tests and they're doing vaccines. I was in stores throughout the year, and it was just incredible to see how our people worked so hard through so many obstacles. The pandemic, civil unrest, natural disasters, accelerated customer volume, constant changes to laws and regulations, and staffing disruptions due to leave that were understandable, but it did affect operations. Amid all of these challenges, we still reset layouts, managed availability, and we improved quality. This is a picture of what we refer to as Produce 2.0. Our team was able to implement this last year, and they did a great job maintaining the department all year with quality and availability. There were other parts of the store where we struggled with being in stock, but we saw improvements in the recent quarter, and our results reflect that. The in-store experience, it's the foundation of our business. I've seen a lot of progress recently, specifically in the last quarter. Of course, we also saw major changes to customer behavior last year, including nearly 3x the digital growth we were expecting before COVID. We believe that represents lasting, permanent change. That's why we think this is the time to invest more aggressively in our supply chain, in automation, in technology, and in our people, specifically those in omni roles as we shared today. We're showing you the flywheel so you can see why we feel empowered to make these investments right now. Our overall business is becoming healthier. We have billions of dollars in opportunities that when scaled, can drive the returns we need. Our investments are about adapting to how customers want to shop. Look at our flywheel and understand that it's more than that. We're investing to grow. Looking at the center of the flywheel, our top priority last year outside of COVID concerns, was to become even more customer-driven, and we've done that. We combined our apps and many of our services together. We redesigned stores. We launched Walmart+, a valuable and unique proposition that's simplifying customers' lives. For the past year, we've been working as a combined organization. One merchandise org, one supply chain org, and one finance org for all the items Walmart sells with corporate incentives that are aligned and reflect that. We are now one business representing how the customer sees us, and we're now better able to identify and attack problems from the mindset of the customer using whichever assets make the most sense. For example, the bag you see on that porch contains items someone ordered from our traditional walmart.com site just a few hours before. We have algorithms that tell us when a customer's walmart.com order includes items that are sitting in their local store, and when it makes sense, we just pick those items from the shelf, and we use our Last Mile network to drive them right to the home. Most customers are very surprised the first time this happens, as they're expecting everything to come in a box a couple of days later. 3,000 of our stores are now doing these deliveries, and they've added density to our Last Mile business and helped accelerate it. Think of the savings on something like a television that we're now able to deliver from a store a few miles away instead of from an FC several states away. For years, we said that one of our biggest advantages was having 100,000 of the highest demand items within 10 mi of 90% of U.S. households. This is a way we're better leveraging that advantage to serve our customers. Now looking at primary destination, I'll add last year, we saw the power of EDLP in great items like never before. We just delivered an 8.6 comp for the year. We had a historic fourth quarter that was just shy of $100 billion in sales. Now, it's amazing to think about that because in 1993, the year I joined Walmart, we reported about $55 billion in sales for the year. Well, last year, Walmart grew $40 billion, and in the U.S. alone, we grew $29 billion, more than half the volume we reported back in 1993, my first year. Very different from my first year, 1993, last year, we picked almost 6 billion items for pickup and delivery, and we were recognized as the most downloaded U.S. shopping app. The reason you see arrows on the flywheel is that it's mutually reinforcing. Primary destination is fundamental, then we grow by deepening and expanding that relationship. We see two fundamental paths to expand general merchandise. One is delivering almost all the Supercenters straight to customers' homes. This is especially important as Walmart+ grows. The proposition will be and should be that you can have almost anything we sell in stores delivered within hours. The new delivery capability I mentioned is a big step towards getting there. Path two is using walmart.com to expand way beyond the Supercenter in a way that's healthy for the long run. We've made a lot of progress adding brands such as Lee, Reebok, DKNY, and S'well. This year, we'll add many more, some iconic names that I'm very excited about. We have 13 general merchandise private brands that would be classified as billion-dollar brands, and three of our apparel lines are $2 billion brands. We're seeing some strong initial progress from the combined merchant organization. Our customers and merchants are now able to benefit as our merchants think about all of our channels: stores, pickup, delivery, first party and third party, and that's led to new brands and better buying. walmart.com contribution profit rates for categories have been up year-over-year each and every month since we combined, and we expect that that will continue. Our furniture and mattress business, for example, continues to be one of our top profit-driving categories across walmart.com, and it continues to grow. We've seen a multiplying effect for things like accessories. Customers who buy a mattress on walmart.com are more likely to buy a mattress cover or sheets in a store. We put new emphasis on building out a trusted world-class marketplace business that dramatically expands our product and services. We've got a lot of momentum, and we plan to accelerate it through strategic partnerships with Shopify, ChannelAdvisor, and PayPal, and we're working with Judith's team on an international platform to reach customers and sellers outside the U.S. Health and wellness and financial services are on this part of the flywheel because they're adjacent to our core business, and it's a natural fit with customers. We now have 20 Walmart Health centers, and with more in the pipeline. Looking at monetizing assets, the marketplace business I just mentioned is a huge opportunity because of what we can offer sellers. We have big goals with Walmart Fulfillment Services. With Walmart Connect, our advertising business, we have a multibillion-dollar opportunity when you consider our reach, our website and app, our TV walls and self-checkouts, and our ability to help suppliers place ads outside the Walmart ecosystem. Five years from now, we expect to be well within the top 10 advertising platforms in the U.S., ahead of big players like Hearst, Fox, and Twitter. Walmart's one of the biggest buyers of media in the country. We understand the relationship between advertising spend and business returns, so we know what marketers want. In terms of the flywheel, the Connect model will grow as other parts of the businesses grow, because we can do things like help marketplace sellers reach target audiences, creatively place targeted ads and buy buttons on digital platforms. This is something that's happening a lot in other markets, but it's totally underdeveloped in the United States. As Walmart+ drives loyalty and brings more data, we can help brands create new ads and experiences for our members. We're also very excited about our Last Mile delivery business. We're now doing about 1.5 million deliveries each and every week from stores, which is more than 7x what we were doing a year ago. We're doing this through a combination of our own Spark Driver platform and third parties. We're quickly getting items to customers, we expect to see delivery costs to continue to go down as we build volume and density. I'm sure you've noticed that this flywheel is based on foundational components that have always been a part of our DNA, in particular, EDLC. We're working with a number of suppliers on next-generation fulfillment technologies, and we're scaling what's working. In our supply chain, we're using robotics to pick and palletize items by store, department, and aisle, and this has helped both with productivity and in-stock. In stores, we're very excited about our market fulfillment centers, which store and pick both refrigerated and non-refrigerated items. We've actually expanded our picking capacity stores in the past year, but we still have room to grow. Market fulfillment centers make the process significantly faster and more profitable. They move a significant amount of the picking off the sales floor, allowing us to do more within the box. One of these fulfillment centers can serve a large area spanning multiple communities. We're now moving to scale these locations, and we expect to have over 100 of these within the next couple of years. At some stores, we'll carve out existing space for them, at others, we'll add on, and some, we'll build as standalone units. There's a lot of good work with packaging, and we're also building a supply chain engine to anticipate demand specific to the locations and times. There are literally billions of dollars of opportunities on the table here. I'm also proud that we have so many members of our technology, product, and design teams focused on building tools for our store associates. Now, you may remember me talking about Ask Sam, an app that we developed when I was at Sam's Club. It lets associates speak questions into their handhelds and get immediate answers that in many cases save them a trip to the back room or across the store. Well, we've rolled out Ask Sam at Walmart, and one metric that shows you just how much our associates like this app is that once someone starts using it, they ask an average of 10 questions a day. The last part of the flywheel is reinvesting in the customer value proposition. That's the whole point of this flywheel, how we create the growth and profit pools we need to be an even better retailer. We'll keep innovating, and we'll keep investing where we need to, including in our people. In the past year, for example, we doubled the number of our store associates supporting omni initiatives. We restructured to a team-based model that's more aligned with an omni focus, and we've continued to invest in wages. Today, I was proud to inform more than 400,000 people that they're getting a raise, and I know this will lead to an even better customer experience. I'm really excited about our strategy in the future. It's a tremendous opportunity to have the largest retail business in the U.S. growing sales with profitable billion-dollar businesses inside it and to be moving as quickly as we are right now. In just the past six weeks, for example, you saw us create a fintech startup, announce the expansion of fulfillment technologies in stores, rename and expand our advertising business, launch delivery from our 3,000th store, and begin scaling vaccinations to do more than 10 million doses per month. We're moving fast, but we have to move fast, and we're making the investments we need to move fast. We hope you see today that we're doing it in a strategic and healthy way. In a world full of friction, we're making life easier for people in a way that's authentic to Walmart. Thank you. Thank you, John. It's great to see how the flywheel is working and generating continued momentum in our U.S. business. Today, I want to talk about two things, the universal applicability of the flywheel to our international businesses, with a particular focus on Mexico and India. Also talk about the changing shape of our international portfolio. You can't talk about our businesses without first saying a massive thank you to our 700,000 extraordinary associates in Walmart International. They have stood tall during the last year and served our customers when they needed it most. They are true heroes, and in all of the numbers and strategies you'll hear from us, they are the real story in every corner of the Walmart world, and they make our business possible. This has been a strong year for the international business. We have delivered strong results. We've reshaped our portfolio, making deliberate choices about ownership for Asda, Japan, and Argentina. We've created new and exciting partnerships which help build out our ecosystems. We have significantly accelerated growth in e-commerce. In fact, e-commerce penetration of international sales grew by almost 40% last year. Turning first to the portfolio, we have closed on the deals with Argentina and Asda, and we expect to close the Japan deal in the very near future. That's three major transactions, all done virtually with virtual transition plans in place. I want to specifically recognize the teams in each of those markets for their work this year. A pandemic and a sale process is not easy to manage. We know that we're bringing to life our strategy of strong local businesses Powered by Walmart. One of the key points that makes our operating model unique is that we are flexible. We will find the right ownership structure to be successful in each market, be it wholly owned, majority owned, or minority stake. We're also building strategic partnerships through equity investments to support our core businesses. First, in JD and Dada in China, and now Aditya Birla Fashion and Retail and Ninjacart in India. All great examples. All these structures contribute to Powered by Walmart as we learn from those that we have a relationship with, be it through boards or direct commercial relationships. That learning is already benefiting the whole of Walmart and shaping our perspectives. The portfolio moves we've made allow us to focus our resources to invest in our growth markets and drive their flywheels. Mexico, Canada, China, and India will all see investments this year. It's all part of building strong local businesses Powered by Walmart. Our markets may have different structures, but what's common are the fundamentals of the flywheel to drive sustainable growth. At their core, they're all customer-centric and have mutually reinforcing assets that generate innovation, engagement, growth, and profitability. The secret is that each one is tailored to the market which it serves. What is most relevant to the local customer, and where is the country on its development curve? Each market is testing, developing, and scaling products and services that build out a flywheel relevant to them, whether they create them themselves or they adapt from other markets. Over the past year, we've seen exponential growth in e-commerce. We've grown e-commerce sales in China by 89%. We've added pickup and delivery capabilities to hundreds of stores across Canada. We've seen e-commerce growth in Mexico of 171%. We're processing over 1 billion monthly payment transactions in India with PhonePe. Our recent launch of Flipkart Wholesale, we brought together Flipkart's core strengths in technology and logistics with Walmart India's cash and carry business to help step change B2B retail in India, creating opportunity to support millions of kiranas across the country. Our success in e-commerce last year has been in part because of our unique global footprint and the access to markets with some of the most innovative e-commerce and omnichannel ecosystems in the world. In 2020, best practice sharing truly lived up to its promise, bringing Powered by Walmart to life, and we were able to leverage skills, technology, and products and iterate in real time to serve our customers. Around the world, we're making progress at every stage of the flywheel, and especially in Mexico, where it's been a year of true acceleration. I talked last year about the strengths of Walmex, and thank you to those of you who followed up after that. It's been another strong year for them. Remember, this is a public company listed on the Bolsa, and earlier today, we presented Walmex results and strategy plans to the market. Walmex is a scale business, serving more than 5 million customers daily from nearly 3,500 stores and clubs across Mexico and Central America. Gui and his team have done an outstanding job in an incredibly challenging year, with the pandemic and other natural disasters significantly impacting Mexico and Central America. They have still delivered high growth, strong margins, and a very strong ROI. Walmex has always been good at boldly innovating within the market, first with Bodega, then bringing Sam's Club to Mexico, and now with e-commerce. They are putting in place the elements of the flywheel and seeing results. I ask Gui to tell you in his own words about the business. Thank you, Judith, good morning, everyone. Let me begin with our results for calendar 2020, which we just shared with investors in Mexico this morning. This has been a challenging year for our business, and I'm very proud of the way our associates rose to the occasion. They delivered great results. We saw total revenue increase 8% year-over-year in Mexico. We were able to grow 130 basis points ahead of competitors. E-commerce sales grew 171%, and we reinforced our leadership in online grocery. Disciplined cost control allowed us to grow our more than $1 billion e-commerce business while we improved NPS and profitability. We also innovated to expand omnichannel and Last Mile capabilities across our fleet. Before I go on, I want to remind you of who we are today. Walmex is the largest private employer in Mexico, with nearly 200,000 associates across the country. We have stores within 10 minutes of 85% of Mexico's population in the top metro areas, and we are a major contributor to the Mexican economy. We have unique strengths that position us to become Mexico's leading omnichannel retailer. By now, you are familiar with the flywheel, and I'm going to spend a few minutes showing you how our flywheel works in Mexico. At the very top, we are focused on winning the primary destination. The shape of retail is changing faster than ever, and we're growing differently than before. While new Bodega stores continue to be a driver for us, our growth engine has been strong, efficient comp growth. Last year, that was 6.7%, with nearly 3% of that coming from our growing omnichannel capabilities. We continue to innovate and move with speed to serve our customers better. We reinforced our omni business by enabling 586 on-demand stores, 1,349 pickup locations, and 1,128 kiosks. We built 63 stores, opened three new distribution centers, and rolled out our Spark Last Mile delivery program to almost 30 stores. We also invested to add capacity to our supply chain and drive automation. Going forward, we will double down on each of these fronts. As we move through the flywheel, our next step is to further extend GM assortment. This year, we will significantly increase the number of sellers in our marketplace, first focusing on local, then develop through cross-border trade. At the same time, we are creating mobile financial solutions that will further link customers into our ecosystems for payments, credit, and remittances. This year, we will give customers the ability to load their digital wallet with credit and debit cards and to use it as a payment method in our online business. This is a natural build on our omni business that helps us solve another customer pain point, speed of payment and money transfers. Moving around, we see cost control and new revenue streams adding further momentum to the flywheel. EDLC and productivity have been core to our business from the beginning. This year, we launched Smart Spend, which allow us to leverage learnings across U.S. and international markets. We are excited about the potential for a high margin advertising business, Walmart Connect, which we expect to grow by 60% in the coming year. All this comes together as we invest into our core customer and associate value propositions. Customer expectations took a giant leap forward in 2020. Thanks to the resilience of our team and the flywheel model, we had the resources and agility to accelerate our strategy and leap with them. Back to you, Judith. Gui, thank you. We're proud of what you and the team are doing, and I'm excited to see your flywheel gain even more momentum as we go through 2021. I said I would come back to India, and while the flywheel specifics to Flipkart and PhonePe are different to the ones that you've heard about earlier, the concept is just as relevant there as anywhere, with a customer-centric ecosystem central to success. It's 2.5 years since we invested in Flipkart, and the fundamentals of why we invested remain unchanged, and we continue to be impressed, and we're learning a lot. I am more confident than ever in the work that they're doing to serve our customers in India, and they're building a strong business and helping support economic growth right across the country. Flipkart and PhonePe have risen to the challenges of the health crisis. With digital adoption in all its forms accelerating in India, both have emerged stronger as we entered into 2021 than when I last spoke to you in 2020. Flipkart saw more than 250 million customers over a five-day period during its recent Big Billion Days event, and PhonePe has just reached that milestone of 1 billion monthly payment transactions. Both businesses have consistently delivered against our expectations. Flipkart and PhonePe are part of each other's ecosystems, but they are separate businesses. We recently completed a partial spin-off of PhonePe that will see each business get its own Board of Directors and give each more independence. Let me first look at Flipkart. Flipkart's GMV growth was impacted by a 53-day shutdown in the first half of the year. The business rebounded and exited Q4 with strong momentum, delivering GMV growth roughly double that of the full year. This is a credit to the resilience and the agility of our CEO, Kalyan, and his team, who were able to pivot and continue to drive growth, recognizing the role that they had to play in serving customers. At the same time, they strengthened the core business to be more resilient. That agility is not surprising to us because Flipkart is a tech company with customers at its heart. This is a rapidly expanding e-commerce platform with a growing suite of bundled services, a market-leading position in categories like fashion, electronics, and appliances, and are promising AgTech and wholesale businesses. We believe that Flipkart is positioned to win India's e-commerce future. I caught up with Kalyan earlier this morning to share more about the opportunity in India and how the team is innovating and building capabilities to deliver their priorities this year. Kalyan, India remains one of the most promising growth markets in the world for retail, but I'd love to hear from you in your own words what makes the market so special? Judith, India has roughly 1.4 billion people today. 34% of the population are millennials, young people. By 2030, there is an estimate that this young population of millennials and Gen Z will be 75% of the total population. 700 million Indians are digital today. I also want to just quickly acknowledge the Digital India vision of the government of India, which has actually enabled this. You have a unique combination of a big market, completely digital, getting wealthier, and very young. Let me just quickly talk about the e-commerce opportunity also in India, which is a result of the Digital India vision. A few years back, there was an estimate that by 2025, the e-commerce market size in India will be $50 billion-$60 billion. I just read a report from consulting firm Bain & Company that by 2025, the latest estimate is actually $90 billion-$100 billion. That is the real opportunity we're looking at in India today. It's remarkable, isn't it, the step change that's happening and has happened. We could see that when we invested three years ago. What I've loved seeing is how Flipkart has grown and leant into that shift in behaviors, really. What is it that makes Flipkart so uniquely suited for this moment? Judith, let me just first give a headline on Flipkart. We are a company built by Indians for Indian consumers. Roughly 300 million customers shopping 150 million product listings across 80 categories. We are the leading product marketplace in India today. Flipkart is known for local innovation. If you just look at the last seven to eight years in commerce in India in general, I would say a huge number of innovations across commerce in the last several years have come from Flipkart. Judith, this is not just in one area. When you open the Flipkart app to shop, everything you see there, just the access, searching for products, digital payments, and the way you receive products, everything is innovated for the local Indian consumer. That's what Flipkart is all about. Very quickly, just talking about some innovations which we are very proud of, which just happened in the last couple of years. Flipkart today offers five native languages in which you can actually get access to the product catalog of Flipkart. We recently also launched voice-enabled shopping, which is very unique in India today. These are some of the big innovations which we've done in the last few years, Judith. Yeah. I just love the innovative nature of this and the fact that you're absolutely designing what's right for the Indian customer. It's more than you're just a platform, though. There's so much more to what you're doing as well, isn't there? Absolutely, Judith. I think what people see in the world when they open the Flipkart app, it's just an app with a lot of products there. Behind the scenes, there is a few things which is really enabling all of this. First is talent. We are so proud of having the best of best talent in India. Actually, our engineering talent, technology talent, is actually a global talent sitting in India. Outside of that, if you just look at the top investment areas for Flipkart in the last few years, which will actually continue into the next few years, will be in technology and infrastructure, supply chain through eKart, which is among the largest consumer supply chains in India today. That's incredible, isn't it? The way that you've used eKart and integrated it in has been amazing. It just reminds me when you talk about innovation and some of those areas, just how quickly you and the team turned things around. You were shut for 53 days during last year due to the pandemic, and I remember them well. When the challenges that you faced in 2020, really, you reacted so well to them, and you actually finished the year even stronger than you started, despite everything. What was it that really made the difference for you and the Flipkart team? Sure, Judith. That's a great question. While 2020 saw great customer adoption, we saw an acceleration in the business, it was actually not about the business in 2020. It was all about safety and partnerships. Once again, we were really inspired by the government of India. They were the ones who initiated this trade-off in favor of safety. We worked with our employees, our ecosystem partners, and invested heavily in safety. This is not just financial investments, infrastructure investments, education to all our ecosystem partners and employees on safety. Second is we over-indexed on partnerships. We were very clear in the beginning of the year itself, that in a pandemic like this. Actually, it will be easier for bigger companies to pull this through, smaller partners, ecosystem partners of Flipkart will actually find it quite difficult to get on the other side of this. We invested in partnerships in a big way. We, once again, invested not just financially. We actually listened to them, spoke to them, and understood what they really wanted. It was a big year for partnerships. To your specific question, we absolutely saw an acceleration in customer adoption. Customer is at the core of Flipkart, and that's the way it has been for the last several years. In the beginning of the year, we saw several new insights come up for Flipkart, customer insights, and we saw some new trends emerging, which was not there before. The meaning of essential categories people were shopping for was evolving very rapidly. Once again, we worked with our seller partners to make sure that we have the right selection for the consumers, which is evolving in 2020. That was another big priority. Finally, we also used this opportunity to actually completely rearchitect our financials. I would summarize 2020 as a year when we got closer to our seller partners, closer to our consumers, a more trusted employee brand, and finally, more financially prudent. Yeah, that's great. I couldn't put it better myself. I think what was really fascinating to watch is the way that you reacted in the moment to what you needed to do, but you really kept keeping a long-term view of how the company could evolve and grow in different ways. Let's look forward now to 2021 that we're already in. What priorities are you thinking about as you continue to build out your ecosystem and really think about driving growth for Flipkart? Sure, Judith. Actually, once again, just mentioning the point I mentioned before, we are very good at listening to our customers. That's the core of Flipkart. One big insight which we've seen in the last few years is that India as an e-commerce market is evolving from trialist consumers to loyal consumers. One of the biggest challenges we've taken on ourselves is how to have a very strong value proposition for a loyalty program. Flipkart Plus, which is a very uniquely local loyalty program, is one very big priority. Second is grocery as a category is something where we want to strengthen our value proposition, especially partnering with the roughly million kirana partners we already have in our ecosystem. Fashion is a very big category in India, under-penetrated digitally, we want to actually capitalize on that opportunity. Finally, as I mentioned before, technology and infrastructure will be two very big investment areas next year and going forward. We are also experimenting with more and more revenue models. For example, continuous investments in our advertising platform, which is among the top five advertising platforms in India today. Overall, Judith, I would summarize Flipkart and India as a big opportunity ahead of us. Of course, there are challenges. We are up for the challenges. It sounds fantastic. Thank you so much for joining us today. I'm really excited about what the future of Flipkart looks like, and huge thank you to you and the team for everything that you've been doing through 2020 and are going to do in the years to come. Thank you, Judith, for the partnership. Thank you, Kalyan. We're really looking forward to seeing your progress as you bring the next 200 million Indians online. Let's move on to PhonePe. The Indian government's vision for digitization really comes to life when you think about payments. UPI was launched in 2016 and has enabled extraordinarily rapid growth. In fact, I recently read that the UPI value of transactions is now equivalent to 15% of India's GDP. That growth is remarkable, and as the market leader in UPI transactions, PhonePe is enabling access and inclusion for hundreds of millions of Indians right from their phones. Last year, we spoke about PhonePe's ambition to build capabilities that allow Indians to spend, manage, and grow their money. I'm excited to introduce Sameer, Co-Founder and CEO of PhonePe, to update on where the business is along that journey. Also talk about their focus on being an open platform, innovating for our B2C and B2B customers, and on developing new revenue streams. Thank you, Judith. It's been another year of significant progress for PhonePe, but what stood out for me the most during 2020 was the sheer resilience of Indians during these testing times. Here's a short video showing just that. What next? [Non-English content] Last March, while India was under a strict national lockdown due to COVID, in true PhonePe spirit, hundreds of our employees worked together and launched the I for India donation campaign to help raise money for the PM CARES Fund. Our month-long national campaign helped raise more than $6 million from 1.6 million donors. Post-lockdown, our offline sales force resumed their hard work to digitize kiranas and small businesses across India. PhonePe has already added 16 million merchants to our digital payments network. This year, we have set a target of creating over 10,000 rural jobs to scale our merchant network to 25 million small businesses across all 5,500 semi-urban and rural districts in India. Last year, we also started focusing heavily on building customized business growth solutions for India's small businesses and kiranas. We launched a store discovery platform on our consumer app. It helps consumers discover and chat with all their local grocery shops, pharmacies, and other essential service providers. We also launched PhonePe ATM, a service that allows small retail shops to double up as ATM centers where consumers can make quick petty cash withdrawals instead of having to visit banking ATMs that are miles away from their homes. More than 2 million merchants signed up as PhonePe ATMs in 2020. All these product innovations in 2020 have helped make our PhonePe business mobile app top 10 business category app in India that's been downloaded more than 10 million times already. On the consumer side too, COVID-related lockdowns and social distancing needs have really accelerated the consumer shift in favor of digital payments, which is here to stay. India is witnessing unprecedented growth in digital payments adoption. Our own transaction volumes reflect this growth. PhonePe now has more than 275 million lifetime registered users, which essentially means that one in every five Indians now has PhonePe. Our monthly transaction count is up nearly 100% year-over-year. Our MAU has crossed 110 million monthly users with a very healthy 97% monthly customer repeat rate. Even in terms of monetary value, our annualized TPV run rate has crossed the $300 billion mark. At PhonePe, we continue to be a very small, lean organization that harnesses the power of technology to transform lives positively. We obsess about building simple, scalable, and innovative products for every Indian. We are now applying the same philosophy to build what we hope will become India's most comprehensive financial services platform. I'm happy to report that our mutual funds category now has users spanning over 90% of the pin codes in the country. We are also India's fastest growing Insurtech platform, having sold nearly 1 million insurance policies since March 2020. We started this company in 2016 with a vision of building India's best digital payments company. Today, I'm very proud to report that PhonePe is leading in India across most key industry metrics, active users, active merchants, total transactions, and TPV. Back to you, Judith. Thank you, Sameer. The team are doing some truly amazing work. Finally, let me reemphasize our key takeaways for international. Firstly, the shape of our portfolio is changing, and we're focusing our resources on markets where we see the greatest opportunity for long-term, sustainable, and profitable growth. Strong local businesses Powered by Walmart. Secondly, Walmart International has a unique global footprint and is able to move with speed thanks to our access to innovation around the world. Finally, the flywheel applies no matter the shape or nature of our businesses. Building an ecosystem of mutually reinforcing assets with the customer at the center is our path to win the future of retail across international. Now, I'm delighted to have the opportunity to introduce Kath McLay, CEO of Sam's Club U.S., to talk about the Sam's Club format, which has also been a real powerhouse for us in international. I want to personally thank her and her team for the knowledge and learnings they continue to share about Sam's Club across our business. Over to you, Kath. Thanks, Judith. You're going to hear me talk today about how we're leveraging those learnings across the enterprise. This year, the warehouse channel has thrived in the U.S. and abroad. Consumers turned to warehouse clubs that could provide larger pack sizes and fewer trips. At Sam's Club, we were ready with a strong omni foundation to serve members how and when they needed us. Our associates turned up to take care of our members and serve them in an omni way during this most unusual period. These patterns were consistent across the globe, driving growth in Sam's Club in the U.S., China, and Mexico. In FY 2021, our club format recorded $75 billion in sales. We have great momentum and now we're accelerating. Today, I'm going to talk to you about our business in the U.S., but I'm also going to talk to you about Sam's Club in Mexico and China, led by my colleague Judith, and the country presidents in each market. While they are separate businesses, we're working together in ways that make our strong businesses even stronger. In the U.S. and abroad, Sam's Club is growing. That growth is driven by a focus on items and omni convenience. The power of the warehouse model and strengths of Sam's Club were even more evident during COVID. The effort we put into investing in tech and improving our item quality really paid off this year. Let's turn to the U.S. Comp sales, excluding fuel and tobacco, were up 15.8% in FY 2021, and transactions increased by 8.9%. Families also responded to our contactless omni offerings like direct-to-home shipping, Curbside Pickup, and Scan & Go. Equipped with these digital tools, Sam's Club saw tremendous membership growth and hit an NPS of an all-time high. This all added up to a banner year for membership in the U.S. We added 6x the number of members than we did in previous years. We also saw a 400 basis point improvement in our renewal rates. You can see how that adds up to a 9.4% increase in membership income, our greatest annual increase in six years. We're confident that we have the right offer to keep these members and attract even more while working the model to grow profits. To explain why, let's walk through the warehouse model. Great items at disruptive prices are fundamental to the model. Sam's Club is an item business with a curated SKU range, so every item matters. Our merchants are experts at finding great items that members rely on, and the unexpected products that members are excited to discover. Last year, we added more than 200 national brands like Beyond Meat, Casper, and Cole Haan. This coming year, we're making significant investments in digital tools that will arm our merchants with the best data so they can predict trends and select merchandise that seems handpicked for our members. Our Member's Mark private brand continues to be vitally important in all our Sam's Club businesses. We know from our data that members who purchase Member's Mark are more likely to renew. We want to continue to be hyper-focused on quality and innovate to build a bank of items that delight. I want to tell you about a few of my favorite Member's Mark items. Let's start with our shuffleboard and dining set. This is definitely the item no one knew they needed, but everyone wants as soon as they see it. Our senior merchant noticed members were responding to multifunction items, and during COVID, members were looking for at-home entertainment. She worked with the supplier to create an on-trend dining table that is not only a 12 ft shuffleboard, but a bowling game as well. With six tools, marine-quality decking, and an included cover for just $1,899, it is already a hit with members. There is nothing else on the market like it, but just the shuffleboard and chairs alone would cost $3,000 at another retailer. Another one of my favorite discoveries are our danishes, and they highlight our merchant's commitment to quality. I've done a blind taste test with one of our competitors, and our version wins every time. This pastry went through a complete overhaul inspired by member feedback and a competitive review of similar items across the country. Our new recipe is exclusive to Sam's Club. We create it with carefully sourced ingredients on European equipment to ensure the traditional processes are replicated. It is made with 100% butter, and the dough is twisted by hand. Since we launched this recipe as a three-pack for $2.98 last summer, sales are up 270%. With a new supplier production facility coming online, we expect to double our sales this year. Great items drive the model, it really starts to work when our merchants and operators buy for less and operate for less, so we can offer disruptive prices. I am really proud of how our merchants and operators are working together to drive efficiencies across the club. We're simplifying our buys to make it easier on our associates and drive productivity. For example, we streamlined our freezer/cooler category by removing SKUs and increasing the number of full door presentations for on-trend items like our frozen acai bowls to reduce labor. You've heard us talk about our apps like Sam's Garage and Ask Sam, which as John mentioned, is now at Walmart. We have a lot more where that came from. We have apps for inventory management, for planning, for emergency operations, for pickup, and more. These tools drive incredible productivity and allowed us to handle unprecedented sales volume growth this year while maintaining a high NPS score. This is no easy feat. One example is the Fresh app. Earlier this year, we rolled out a major enhancement using machine learning to improve production planning of our fresh offerings, like the danishes I talked about earlier and other items we prepare in the club. We streamlined the process from eight steps to three and significantly improved accuracy. We're more efficient, we sell more, we produce less waste. What used to take eight minutes now takes 30 seconds. All of that adds up to saved labor costs, so we can invest back in price. Let's talk about convenience. Earlier, I talked about our omni offerings, Scan & Go, as well as Curbside Pickup and Direct-to-Home. All three of these offers saw significant adoption increases in FY 2021. Let's talk about my favorite, Scan & Go. Looking for a safe way to shop, members flocked to this tool in FY 2021. Penetration for Scan & Go increased by 560 basis points. We built on this strength with the launch of Scan & Go Fuel in the fall. This launch significantly boosted adoption. Many members tried Scan & Go Fuel, sparking use of the tool in the club as well. As you know, these products are transferable to the rest of the formats, and Walmart is now using Scan & Go, too, launching it as part of their new Walmart+ membership. We will continue to innovate on Scan & Go, and you'll see us testing some exciting new features this year to make this clever tool even better for our members. I'm also proud of our Curbside Pickup offer. At the onset of the pandemic, we listened to our members and launched a concierge service in just six days. That allowed our members to shop our assortment without having to leave their vehicles. Not only did this provide a critical service for our members when they needed it most, it helped inform and accelerate our curbside strategy. We quickly launched Curbside Pickup across the fleet in June. We have seen curbside orders increase triple digits for the year. We've expanded our GM assortment, and we have more than doubled the capacity to meet strong member demand. Members love this service. It has an NPS of 80, a significant increase since June. We're not just focused on digital convenience, though. We're committed to making the omni experience come to life in the physical environment as well. Last year, we piloted a new look and feel in a few of our clubs. The new branding is modern and minimalist while highlighting the best things about Sam's Club, our incredible items, and our omni offerings. We've already made these updates in 56 clubs and plan to hit half the fleet this year and the remainder next year. We will continue to accelerate here to maintain our leading position and make shopping Sam's Club the most convenient experience in the channel. I want to talk briefly about ways we leverage Walmart's scale at Sam's Club and, in turn, how we export Sam's Club assets throughout the enterprise. As part of Walmart, Sam's Club can leverage best-in-class services and resources like supply chain tech and procurement. This helps us keep our SG&A low so we can invest in digital tools and convenience that sets Sam's Club apart from the competition. Abroad, we've taken a great brand and made it successful in China and Mexico. What we've learned in these markets helps make the whole enterprise stronger. Our Mexico and China businesses have adopted tools that worked well for Sam's Club in the U.S. Mexico launched Express Membership, which allows members to sign up in one minute, something that used to take 15, and is currently testing Ask Sam and our Fresh app. We've expedited the member sign-up and renewal process in Sam's Club China through our WeChat Mini Program. We also work together to share items that will be relevant across markets under the Member's Mark label and leverage supplier agreements to lower costs for both private and national brands. In 2020, our global leverage program helped launch 700 new items in Sam's Club in Mexico and China. We have some really high-performing clubs in Mexico and China, and we expect to open as many as 30 new clubs between the two markets over the next three years. In closing, you can see we're excited about the Sam's Club business, and we are building on fabulous momentum. Abroad, we will continue to innovate while building clubs. In the U.S., we will remain an item business with a focus on quality, price, and assortment that continues to build on our strengths: an incredible team of associates, a winning model, a culture of innovation, and digital assets that set us apart. All of this comes together to increase member advocacy that will continue to fuel growth. Thank you. Now I'll turn it over to Doug. Thanks, Kath. Now let's talk technology. I'm joined by Suresh Kumar, our Chief Technology and Development Officer. I know many of you had a chance to meet him at last year's meeting. He has been busy. He and his team are leading the effort to modernize our tech stack, put our data to work, and build new capabilities and income streams. Suresh, last year we shared our plan to modernize our tech stack. Please tell everyone about our progress. Thank you, Doug. Absolutely. Last year, we talked about approach to moving faster and taking advantage of the developments in machine learning, artificial intelligence, and other new technologies. Now, these modern technology elements will enable Walmart to move with speed, be innovative, and become more productive. Now, we are modernizing our tech stack on an innovative hybrid cloud platform that is uniquely suited for Walmart, and I'm really pleased with the level of progress that we have made in this area on several different fronts. Now first, we added a lot of great talent to our tech team. Sure. We brought in senior leaders from across the industry. This has really created a deep domain expertise as we start building out more modern applications. Second, we have been aggressively upgrading our infrastructure. We upgraded more than 50,000 servers, and that's allowing us to take advantage of the latest hardware and software. We also upgraded more than 2,000 stores to 1 Gb per second fiber connection. What this is allowing us to do, we can run machine learning and data workloads like computer vision and augmented reality, which demand a lot of bandwidth right inside our stores. More than anything else, we have doubled down on our move to the cloud. We ran 100% of our U.S. e-commerce and Sam's customer journeys on the cloud this past holiday. We also ended up building a data lake in the cloud and migrated more than 1.7 PB of data into it. This is allowing us to run very advanced analytics in a very efficient manner. Lastly, we rolled out our cloud-powered checkout system to nearly 23,000 point-of-sale devices. By the way, this is the same technology that powers the contactless customer experiences that Kath talked about in Sam's. This migration to the cloud really has been at the center of our modernization efforts this past year. That's really good stuff. To me, the highlights are the team we've assembled and the fact we stayed on schedule with all of those things during a pandemic, and you worked remotely to get it all done. It's just amazing. A lot of the work that you just described, though, is necessary for kind of the mid and long term. We are actually already seeing some benefits from the modernization now. Would you share some of those? We absolutely are. The most visible benefit was how we handled the volume surge when the pandemic started. Our everyday volume levels started to rise, and it rose to levels even higher than our prior holiday peaks and well above anything that we had seen when we started running holiday shopping events. Migrating to the cloud allowed us to keep the site available for our customers while operating a lot more efficiently because we could scale up, and we could scale down in a very seamless manner. Second, supply chain scaled very well during the holiday. We lit up over 2,500 stores to start delivering online orders, in effect, turning our stores into fulfillment nodes. Very cool. We could do this, by the way, because we built a system that crunches millions of pieces of information to find the fastest and lowest cost node to deliver a particular order to a very specific customer. Of course, this is a huge win for our customers and for our business because not only did we deliver to customers a whole lot faster, but also at a lower cost. Our store associates enjoyed doing it, too. Absolutely. Another big benefit of modernization and using new technologies is actually for our store associates. Now, John mentioned Ask Sam, and this is an app that uses natural language processing. We have also started testing out a new app that we call VizPick, and this one uses augmented reality. What this does is it directs our associates in the background to very quickly identify what needs to be taken up front. Using this app, associates are able to take only 1/3 of the time to complete a task which they previously had to do by scanning each and every case. That's huge. By the way, these are just a few of the examples that illustrate the benefit of the work that we are doing. We are enabling the business to move at speed, become more productive, and we are innovating on customer and associate experience. You and the team did some incredible things in 2020. For example, supporting the surge in e-commerce was amazing. What are you most proud of? Doug, when the pandemic hit, we found ourselves needing to deliver a new set of urgent priorities to help our associates and to help our customers. For example, we had to scale our VPN capabilities by 600%, our video conferencing capabilities by over 100%. What this allowed us to do is to enable our corporate associates to work remotely without skipping a beat. Now, similarly for our customers, we delivered on features that allowed them to shop safely and conveniently. Everything from contactless shopping options, COVID testing, site support, to delivery prescriptions. We launched over 100 features, big and small, to enable shopping during COVID. What I'm really proud of is how our team continued to make progress on our strategic initiatives, our tech modernization efforts, while at the same time actually innovating with speed to deliver on COVID-related business features that were needed to serve our customers and our frontline associates. Yeah, your team stood tall in 2020. Looking forward, we're changing our business quickly, and we're building new capabilities with tech playing a key role. What are some of the things that excite you the most? I continue to be excited about the work that we are doing with machine learning. It's helping us both improve efficiency in the business, and it is transforming our customer and our associate experience. One good example is how we manage our assortment. We built a machine learning model to optimize the timing and the pricing of markdowns. This one effort alone saved us $30 million in markdown costs. Awesome. Now, of course, we are going a whole lot further. We are building algorithms to better forecast demand and to optimize both the location and quantity of inventory so that we reduce the need even to have markdowns in the first place. Another key area where we have applied ML is in facilities maintenance. We now have an automated system to review thousands of proposals and invoices every day, and it does it for accuracy across multiple dimensions, like historical labor hours, cost of parts, travel time, and then the system recommends the ones to either approve or to reject. Our associates in real estate use the recommendations to increase proposal and invoice accuracy, and this has resulted in savings of at least $40 million last year. One more example is on the pharmacy side, where we have been building out our data lake so that we can run ML models on top of it. We took out millions of dollars of cost by improving our supplier agreements and by improving our merchandising choices. We analyzed agreements to see where we could buy a whole lot more effectively. At the same time, we recommended what drugs could be added to our $4 generics program. Of course, this helps strengthen our customer offering while at the same time improving our cost position. I've highlighted a few areas, but the power and the potential of ML is applicable in every single thing that we do, and that is something that I'm really excited about. Me too, really appreciate those savings, by the way. Let's talk about priorities. What will you be focused on looking ahead? Doug, last year was building about foundational capabilities, about accelerating the modernization work to enable the business to go faster, to become more innovative, and become more productive. This year onwards, it's going to be about unlocking the future of shopping for our customers, meeting them in their shopping journey in a highly personalized omni-fashion. In fact, we want to start serving our customers right when they start consuming content, social commerce. On our associate side, we want to reduce the time that they spend on activities like inventory counting, making multiple trips to the backroom for stocking, picking, all of this kind of stuff, so that they can focus on serving our customers. We are focused on building systems that optimize all aspects of inventory and do that in real time. Everything from how we get inventory from our suppliers, to keeping our products in stock, to fulfilling customer demand in the fastest and lowest cost way possible. We want to enable our merchants to focus on the art of merchandising. Have the systems take care of everything else. The foundation that we have built is truly helping us reinvent how we serve our customers, how we run our business. Really excited about the potential that we can unlock. Now, as I said in the beginning, technology will enable Walmart to move with speed, be more innovative, become more productive, and we see our role in technology as powering Walmart to lead the next retail disruption. Of course, that is well underway now. It sure is. Suresh, thank you for everything your team's doing. Thank you for the momentum that you're building. We covered a lot today. Thank you for your time and attention. Our focus is on our customers, on people, on the families we serve, and we're excited about getting even more aggressive. We have a strong, deep team, and we will execute. We will strengthen this company in a way that benefits a lot of people for a long time to come. Now, we'd like to give you a five-minute break to grab a coffee and stretch your legs. When we come back, we'll have a Q&A session that will include Brett, John, Judith, and Kath. Thank you all. [Break] Thank you for joining our second Q&A session today. Just as a reminder, please unmute your Zoom when we call on you. That, we'll go to our first question from Oliver Chen at Cowen. From there, we'll go to Ed Yruma at KeyBanc. Hi. Good morning. Thank you very much. Regarding technology, what are some of the learnings from India that will be most applicable to the U.S.? Also curious about edge computing and how that may play a role in thinking about leveraging stores and technology there. Yeah. Judith, do you want to kick that off? Maybe John, you can comment. Yeah. Hi there. I think the leverage from India is really understanding how they're building out their ecosystem. We're starting to really see the difference that they're making for India in the way that they're joining together different bits of the platform that they've got and building out a flywheel, albeit different to the flywheel that John described for the U.S. We've got some interesting things happening. They're building out AdTech, for example, as well. That is a developing market, so slightly different to the U.S. We're just about to start a trial in our Chile business using the Flipkart AdTech app, which is really helpful to a similar kind of market to be able to trial that out in. Two benefits to that. The first is, of course, that Chile benefits from that. Secondly, Flipkart learned how to produce commercial-grade tech, which potentially might have a future for them as well. We learned lots, not just about the tech, but about how they approach things and about how they're building out a broader flywheel as well. Thanks, Judith, and Oliver, good to see you. Thanks for the question. I think I would just frame up the answer by saying one of the extraordinary things about Walmart is we're local in about 5,000 communities. That's been extremely advantageous in the last few years, particularly last year, as our teams did so much to serve communities all over the country. This local presence has so much meaning in terms of being real in the community, our ability to serve customers in a number of ways, whether it's picking up in a store or shopping in a store, using our local facilities as points of distribution and with the supply chain investments we're making. Your point on edge computing, it's a great one. It certainly does open up real possibilities for us considering we've got these properties all over the country. We're within about 10 mi of 90% of the population, and going forward, I think that's a huge advantage, whether it's in our core retail business or some of the other income streams that we covered this morning. As it relates to edge compute, Oliver, this year's focus was on increasing the pipe or the bandwidth into a lot of our stores because we imagine future use cases along the lines of what Suresh talked about just a few minutes ago with an app that you can hold up and see which merchandise to pull forward. We'll use handhelds for that for a period of time. Someday we may have wearables, and we can imagine other enterprise uses in addition to that example, and there may be excess capacity to monetize on top of that. We'll just have to see how much we need ourselves. Thank you, Oliver. Next, we will go to Ed Yruma and then to Greg Melich after that. Hey, thanks for taking the questions. I guess first you guys have kind of laid out some very rough outlines on some interesting developments in your distribution capabilities. Can you talk a little bit about micro fulfillment, the Last Mile investments? Are you seeing a step change in terms of the consumer that wants items delivered versus pickup? How does that change the longer-term profitability of e-com? As a follow-up, you guys have done a great job kind of reformulating your international mix. How do we think about contribution longer term, now that you've tipped into kind of higher growth markets? Thank you. Yeah, John, I might kick it off just by saying we made a deliberate choice years ago to focus on pickup in the U.S. before focusing on delivery. We were doing delivery in the U.K. and other markets, and Judith, we were learning a lot from what Asda had done with delivery. In the U.S., we thought based on how large the country is and how people like to drive their cars and they do drive-throughs for food and banks and everything else, that we had the opportunity to really focus on pickup for a few years, which was obviously advantageous to us economically. Those capabilities, which we cut and paste software from Asda to get started, which is great. Those capabilities actually, John, were the unlock to productivity for delivery, which you're building on now. Yeah. I'm really glad that work was done a few years ago with Judith, Doug, because it created the foundation for what is enabling what we're doing today. Really to step back and think about what happened with the customer last year, the pandemic changed behavior, and in some ways, I'm sure it's temporary, but in many ways, these are permanent changes. Customers having the ability to shop in a store or pick up or deliver at their schedule or unattended or even within two hours are things that we're doing all over. If it weren't for the pickup capabilities that were happening in store, all that wouldn't be possible today. We talked about the growth of the Last Mile delivery, and that's always just a function of volume and density in neighborhoods. The more density you have, the more economic it is to deliver an entire range of goods. We're excited about those businesses. You also asked, mentioned local, what we're calling MFCs, market fulfillment centers. I'm really excited about the capabilities it adds for a couple of reasons. One, it'll increase capacity. The increased capacity also helps stores manage what's going to be done on the sales floor and what's going to be done in the fulfillment center. Those fulfillment centers, they can serve broader areas, including other stores. The way that we're tying all the supply chain assets together with automation and our fulfillment centers down to the Last Mile, up to the point of delivery too, and including inside the home, it's a really exciting proposition. The fact that we've attracted more new customers with the pickup and delivery services is also helpful. I think there are a lot of folks who weren't shopping Walmart in stores, that once those services were available, they were excited to take advantage of them and try them. Kath, that includes Sam's Club, where this year you've added a lot more curbside capacity. Yeah. We rolled it out across the whole network in June and have seen it successfully grow week on week ever since then. Excited to kind of explore how we can leverage synergies with Walmart from a delivery perspective moving into the next year. I think it's one of the drivers of membership growth, the fact that people could take advantage of Sam's without coming into the building during a pandemic. Maybe just, do you want me to pick up on the international and the growth piece? I will just build on the point that John was making, which is we're learning around the world, by the way, from Last Mile delivery. The Spark platform that we've got, we've got that starting in Canada. We've got it delivered in Mexico. This is not just a U.S. thing. This is around the world as well, and the capabilities that we're building are pretty universal, and I think that's one of the unique things that we have. The international mix, yeah, we've done a lot of changes this last year in international. You know that the Asda deal just closed this week, and we are more focused on high-growth markets as well. Each of those markets is a different place in its portfolio. I'm excited to see how we continue to contribute to Walmart overall. As Brett said, you'll see us with a higher sales positioning than you've seen in the past. I think also businesses that are really building out and growing for the future as well. It's an interesting and unique global footprint that we've got. The priority markets continue to be, as they've always been, with Mexico, China, India, and Canada, but also we see strength in Chile and Africa coming back as well. Thank you. Next, we'll go to Greg Melich with Evercore ISI. You're on mute, Greg. Sorry about that. Hope everyone's doing well in the weather there. I guess two things. First, for Brett, it's great to hear a CFO excited. I guess what one or two levers should we look to going forward to get the profit margin growing again into 2022 and beyond, if you had to pick all the initiatives you see out there? My second question, I think is for almost everybody, probably Doug, John, I'm not really sure. If you look at that e-commerce business now, $65 billion, how much of it is 3P? As you get to $100 billion or $200 billion, how much do you think that mix would change? Do you ultimately need to have your own drivers and assets to really scale the business? At what point of scale would you need to have your own trucks, drivers like an Amazon? Thank you. I'm glad you picked up on my excitement, Greg. actually, the question you asked is why I'm excited and very optimistic about what we can do as a company. when we look at w here we want the company to be financially two years from now, three years from now, five years from now, there's a lot of different ways to get there. It doesn't have to take one track, and that's what's so important with the other income areas that are growing significantly. Judith just mentioned international growth being more significant than it's been in the past. There's so many initiatives going on at Sam's Club that are driving sales and profit and membership. Then go to John's area, and there's so many things from talking about, again, the new revenue streams, but also the general merchandise business marketplace. There's just a lot of ways to get to the place we want to be. Greg, if I go back several years ago, maybe that wasn't quite the case. I just like the optionality that we have as a company. I think it just opens up opportunities for us. Greg, on your question on mix, it reminds me back, years ago when we were in general merchandise businesses in what we call Division 1 stores, and then we bought grocery chains, and we added those together, and we created this magic mix of the Supercenter. As the formula started to really work, we accelerated investments up to about 350 stores a year. If you think over the last eight to 10 years or so, we had the Orange app, which we talked about, which was the copy of the Asda app. We had our walmart.com app. Those have come together, and that same sort of mix equation is really exciting to see it play out. For our merchants, and we've got a fantastic merchant team, now that they're in the position to have a category or group of items or group of categories and be able to mix those across channels, and channels being everything from 3P that's fulfilled by us, 3P fulfilled by the sellers. We've got our 1P commerce business, which was strong last year, and our store business. The lines are really starting to blur, and it's all about resetting how we think about the customer and offering the customer the very best experience across all the channels. Having a 3P business that's growing like it is and fulfillment services, we see demand from sellers is accelerating, and we're really making sure that we think about sellers as a customer. I've been spending time on Zoom calls. Unfortunately, we can't have meetings together, but my team and I have been meeting with some of our largest sellers, and we're listening to all the things that they need from us, and we're enabling those capabilities so that Walmart can be a great platform for them, just like it is for suppliers and customers and all of our associates. This ability for our team to be able to mix across channels in addition to the categories they serve is really exciting as we look forward. John, maybe a little bit more on Last Mile. Our current arrangements include Spark, our own independent contractor platform, which has been scaling and growing. We also have relationships with others that do this similar type of work. You've had some experiments going on with AV. Here locally, there's a vehicle that's running around. Some experience with drones now, trying different things. Anything more on density or how you see Last Mile going forward? Yeah, for sure. Look, the customer is the boss, and customer is number one. We've said that for years, and what we have to be able to do is deliver the way the customer needs to have a delivery done or fulfilled the way they want to, and it really depends on what's going on in their life. Thinking about, just take a neighborhood where we've got a number of customers who are customers of Walmart who need to stay in stock or need to be delivered to. In addition, in the same neighborhood, we'll have people who are looking for a gift for a birthday for that week, or they're inspired by some sort of content they saw online, whether it's someone else's platform or on our platform. To be able to have density in neighborhoods is really important, and that includes items that'll come from fulfillment centers and sellers and local stores. All that down to the experiment, Doug, you mentioned, which is we've got vans that are delivering in density here locally. We need great partners like FedEx for the runs that run from fulfillment centers straight to people's homes. We are experimenting with aerial delivery, including drones. We've done COVID tests this year in communities. We've been able to launch some new items and deliver the first unit sold from stores to places with drones. Greg, I think the answer is we're going to keep learning as we go. Some of these things we know are ready to scale. We've talked about market fulfillment centers. Our Last Mile business is over 1.5 million deliveries a week now, which is up about 7x from last year, which is exciting. It's a really healthy blend of service providers and the Spark platform, which enables people to drive on our behalf and on behalf of others like Sam's Club in the future. Greg, like we do with our private fleet, there are loads that we want to move. There are times when we use third parties to move those. I think there'll be a hybrid approach here, some mix of our assets and a whole lot of relationships with others to build out the entire network. Thanks, Greg. Next, we'll go to Chuck Grom with Gordon Haskett, and then to Chris Horvers of JPMorgan after that. Hey, good morning. Great to see everyone. Couple questions for me. First for Brett. COVID costs last year were around $4 billion. Curious what's the embedded run rate this year in the guidance that you provided this morning? Also, how would you size up the wage cost headwind that you also announced this morning relative to that $4 billion? Second for John, unrelated. I'm curious how you're planning the year from a category perspective. Which areas do you think are going to do well, and what areas of your business do you think we could see the release of some pent-up demand? Thanks. Yeah. I'll kick off, Chuck. Good to see you. what we tried to do with guidance this morning, we said we're trying to give you the best view we can, given what we know is pull you up a little bit to a higher level. As we get down into the individual pieces of that guidance, there's a lot of different things that can happen in the year. How quickly do vaccines take over? How quickly do we need to continue the cleaning and maintenance that we're doing, that'll continue for some time, we know that. out of the $4 billion, there was a number of one-time bonuses that obviously is in that number, and then there is a run rate in there. we do have a run rate going forward. Obviously, we have run rate on wages. Getting into the details of that is not something that we're prepared to do this morning, but it's taking all of that, looking at the variables that could cause one to go up, one to go down, and then just looking at the most likely scenario, and that's what we felt like we gave you this morning on sales and profit and breaking it down further than that, just, we're just not going to do that this morning. Probably the number one thing we need to get done is we need to get the country vaccinated. Yes. There's a lot of effort and time and attention into how we can help scale that effort. I think, John, we were maybe 22 states last week. You might talk a little bit about vaccinations and the role we're playing as you talk about categories. Yeah, sure will. Chuck, good to see you. Brett, the year last year was extraordinary in a number of ways, and I do want to just thank our team for being so committed to safety and cleaning, and it was an enormous lift. Everything from sourcing masks and like we've got today, putting up plexiglass in 5,000 locations. They move mountains, and we really did a great job. They really did a great job prioritizing associate safety, customer safety, and serving communities. Now, which leads to vaccinations. We are here ready to help all across the country. We've got close to 20,000 pharmacists and pharmacies ready to participate. We've got capacity well over 10, maybe up to 14 million per month that we could help do. We want to help to get the country vaccinated because it gets us moving back in the right direction, and the sooner we're able to do that, the better it is for the economy and every part of the country. Chuck, on your question on mix. Just think back to last year. The swings were pretty wild, and they had impacts that stayed with us for some time. Last year in February, we saw people buying more OTC. In March, it was a big run on grocery in the stock-up phase. General merchandise really took off at the end of April and into the second quarter, which resulted in a very high number of out-of-stocks. We really struggled with conditions and in-stock for a couple of months because of the surges. Reflecting on what's happened this last quarter, it was a strong quarter. Growth was up 8.6%. Also really proud of the team that the plan they put together, they were able to not only beat the plan that they had, but grow at that level while being closed the day that we were open last year. We closed on Thanksgiving Day, and that had an impact. We were just short of $100 billion for the quarter, and I think that just a few more hours, Brett, probably would have made the difference. If I had to make the same decision again, I'd make the same decision, and I would close for our associates who needed some time off. In this last quarter, mix was pretty balanced. The food business, the consumable business was stronger. Health and wellness had a great quarter. General merchandise also had a great quarter, which we saw nice share gains in November, December in general merchandise. What happened late in the quarter was a more balanced mix of categories than probably what we saw back at different points in the year last year. Thanks, Chuck. Next, we'll go to Chris Horvers with JPMorgan and then to Paul Lejuez at Citi. Thanks. Good morning, and thanks for all the information. First, a question for Brett, and then I'll follow up on PhonePe. In the 4%+ sales construct beyond this year, how are you thinking about the Walmart U.S. comp? Bigger picture, historically been sort of a mid-single digit type earnings grower. Is the message today that with faster sales growth and potential for more margin expansion, that we could be thinking about more like a high single digit type earnings algorithm long-term? Yeah, Chris, good to see you. As you think about that 4%, given the size of the business in the U.S., you're not going to get to that number without pretty good growth in the U.S., and you're seeing a lot of the capital that we're putting forward in fulfillment, innovation, automation, making sure that we can grow the top line in the U.S. as quickly as we can. That's what we want to do. Having said that, international still being a big part of the business and having now a higher growth mix inside of international, that also helps as well. On the profit side, as I said this morning, we expect over time to grow operating income faster than the sales, and that's what you should expect from us as investors. There's a lot of different ways to do that. One of the things that I believe will look a little different going forward is the pieces on gross margin and higher margin businesses, these evolving and growing new businesses that we have higher margin mixes. General merchandise business getting stronger helps mix that out as well. As our contribution margin gets better in e-commerce, that helps as well. It's all these pieces starting to come together that gives us the opportunity to grow operating income faster than sales, which has been a little different than we've been the past few years. Understood. As a follow-up on PhonePe, can you talk about what your longer-term thought process there on the strategy? Are you thinking about this as an opportunity to scale it globally, to take some of the learnings back to other markets, and so thus it's a longer-term commitment? Do you see this over the long term as a monetization that provides fuel to reinvest in the core business? Thank you. Hey, Chris. Listen, PhonePe is an amazing business in its own right. Doug and I were just reminding ourselves it's just four years old. This time last year when we were talking to all of you, I was wowed at the fact I could say it was doing 0.5 billion transactions a month, and now I'm talking about them doing 1 billion. I think that tells you the scale and the way that it's growing. We are really excited about what the long-term future for PhonePe looks like. They're continuing on their strategy, which is send, spend, grow, and manage, and we're supporting them through that strategy as well. This has been a year where they've consolidated and really thought about India. It's been a remarkable year in India overall, and digital adoption in all its forms have stacked on, and particularly in digital payments. They're very much focused on the Indian market. At the moment, what the future looks like, they're helping us, advising us in other markets like Mexico, but at the moment we want them to focus on India. The thing that I think we did this year, which is interesting for them, is we did a partial spin-off for them. The reason for that is we've got two amazing businesses with Flipkart and PhonePe, and what we were trying to do is set both up to maximize their potential in the long term so they can both build value. They can also really think about having dedicated capital, which helps those growth opportunities. Now, PhonePe is monetizing as it goes through this. Like you've heard consistently today, it's got an AdTech platform. Many of the new areas, such as mutual funds and such as insurance, are accretive to them, but they're still in a growth phase at the moment. One of the things actually that we shouldn't overlook in what we did this year is that we have now been able to create their own ESOP for that business, which best aligns them and the management team to what the future for them will look like. We're very much interested in the long term for them. Yes, there'll be a lot of learnings around the world. I think financial services is core, and we've got a great opportunity in India. We've had a financial services business, obviously in the U.S., Mexico, Canada, other places, and it's so integral to commerce and creates so many different use cases and opportunities to deepen the relationship with the customer, save them money, which we've done well over time. It's been more store centric than what the future will look like. Because we want PhonePe to be focused on India primarily, we've taken a different approach in the U.S. John, you might elaborate more on it. Yeah. We announced a fintech startup with Ribbit Capital. We're really excited about that. I think ultimately, having a great platform like Walmart where people are looking for better ways to pay and pay in an omni-channel way, just really opens the doors for us to think creatively about a marketplace of products and services that are great for customers' financial well-being. That's all possible because of the underpinning of our ability to create a trusting environment where people buy their food, they get their health and wellness services, including clinics from Walmart. Ultimately, this, along with some of the other businesses we talked about, which I heard in your question, we're really confident that not only we have a path forward in some of these new areas, but also in others, we've really got a path to scale. Things like the ad business, it's a sizable business that's growing fast and has a lot of room to scale. Just putting us at the center of the question, why is it possible? It's because you have suppliers, you have sellers, and you have customers all looking for ways to connect. Suppliers need services to reach customer groups. Sellers need to reach customers, and sellers need to buy from suppliers. At the center, that was the reason that we decided to rename our business, which was we'd referred to previously as Walmart Media Group, to Walmart Connect, because it connects those three parties together where they can get on with it and have a great business together. Thanks, Chris. Next, we'll go to Paul Lejuez at Citi. Hey, thanks, guys. Lots of attention on wages tends to be on the SG&A piece of the equation, but I'm curious if you could talk about what you see from a top-line perspective in states where there has been some wage pressure in recent years. Do you see a sales lift in those areas? Separately, just curious how you're thinking about the top-line drivers in 2021 from a store versus e-com perspective, traffic versus ticket perspective. I'm sorry if I missed it, but did you comment on what you expect in terms of e-com profitability in 2021 versus 2020? Thanks, guys. Probably a few things in there to unpack. Maybe let's start with the associates at Walmart. For years, we've been really proud of the fact that we provide career opportunities. Almost 70%, 75% of our managers started as hourly associates. I started as an hourly associate in 1993, and we're really proud of the career ladder. As we step back and looked at, Chris, what's really happened in the last couple of years in store specifically, we've seen that the work has changed because the way the customer shops has changed. When Doug was talking about starting pickup back in the U.S., Judith, probably six years ago or so, around 2015, that was a pilot, an experiment. It's now a sizable part of not only how customers shop, but it's what we do every day. we took a step back and looked at the store and broke the store into really four big work groups. The announcement this morning is to invest in two of the most critical work groups as we look over to the next few years, and that's stocking the store, maintaining inventory levels, and I'll talk about that in just a second, and then our digital business. We're referring to it as the omni business, but it's really the pickup and dispense business, which includes dispensing to customers' cars or to delivery drivers. if that's the way the customer's going to go, we're going to stay ahead of it. when it comes to inventory availability, we've got to be right each and every day in stores for the in-store shopper and the picker who is trying to put an order together and dispense to a customer. Last year, different parts of the year, we had times of the year where we were proud of our in-stock position. We had other times where we had extreme pressure in the supply chain, and that would include availability, surges in business. We had the stock-out phase, which left us in a position of out of stocks for a long amount of time. It's the right time for us to invest in those groups of associates and create a great career map for them so that they not only want to come to work and stay with us, but they see future opportunities, including being a store manager or being a regional operator or being the CEO of one of the businesses. What we're trying to make sure we're doing is invest in a way that it's really clear to an associate who starts at Walmart this week what their opportunities are and how they'd accomplish it. Wage inflation, generally speaking, is good for us in every country where we operate. It's good for us in the United States if a market is going up. It's also good for us if our associates' wages are going up and they have more disposable income. We're obviously the first place they think of. Many of them are working there every day. We do want to see wages go up. We just got to get the pace right, all things considered. As it relates to e-commerce, Brett, do you want to comment on that? Yeah. As we said, that's been moving definitely in the right direction. We reduced losses this year significantly in the e-commerce business, and it's such an integrated part of our business. You did not miss it. We did not give guidance going forward on that. You can imagine, with the growth and profit algorithm that we laid out this morning, without continued progress in that, it would be tough to grow operating income faster than sales. That should give you some indication of we assume that progress will continue. We just these days think of it as an omni P&L even more than ever. I think Brett's done a nice job explaining it today, all these different pieces and variables, and we look at it holistically. As we've shared before, we've got a cadence that we work through to manage the financials to decide where we're going to step on the gas, where we're going to be more conservative. The e-com P&L, we won't lose sight of. We'll still track obviously GMV sales, contribution profit by category, the fixed costs. We've got great visibility into that. The customer relationship pulls stores and e-com together. Generally speaking, we're thinking about this as a holistic and omni business, not in silos anymore. Thanks, Paul. That's going to conclude our Q&A session. We do appreciate all of your good questions. Doug? Yeah. I'd just close by saying thank you. We know so many of you and appreciate the time and attention you pay to the company. Hopefully, most of you are aligned with our view. We're building this for the long term. We're going to manage the short term. There have been times these past few quarters where we've been able to have a positive surprise to the upside. We're going to go to work. We're going to execute. We're going to build for the long term and manage the short term as we go, and you guys can give us feedback and hold us accountable based on the actual results. We'll get back to work. Hopefully, we'll see a little bit of a warmer temperature around this part of the world and get all of our stores back open and get customers back in them and build from there. Thank you all. Thanks, everybody. That will conclude our program. Thank you.