Good morning, everybody, and welcome to the lunch session of JP Morgan's 12th Annual Retail Roundup. It is our distinct pleasure to host it here inside JP Morgan's new global headquarters. I am even more delighted that I have Walmart's Chief Financial Officer and Executive Vice President, John David Rainey. It's good to be here. John David, thank you for coming and spending some time with us. Yeah, it's good to be here. Thank you. The good news is, unlike last year, where the end of the day was the Liberation Day announcement, we've had, at least for a short period of time, some things to celebrate. What a difference a year makes. Yeah. As I said before, I think the certainty of constant uncertainty, then you can operate in that. Just don't expect anything else. That's true. It feels like the environment that we've been operating under for a period of time. I always find it helpful to set the table, so to speak. At the Analyst Day, a little over a year ago, the management team codified a bold plan that embedded continued share gains as the omni-channel flywheel churns with the accelerating margin expansion and accelerating cash flow generation over the planning horizon. A lot has happened since that moment, tariffs, a war, a CEO change, complicated geopolitics. It's an open mic question for you. Can you reflect back on how the financial plan is perhaps evolving, given how much the environment has changed, and to what extent Walmart's core strategies have also evolved, given how the environment has changed? I'd be happy to. I'd start with, as we're sitting here in a period of uncertainty, as you kind of prefaced in your remarks, I feel like we are really well-insulated from some of the whims of the economy. Like if we get into a period of time where there's higher oil prices or a more recessionary type of environment, I would argue Walmart is positioned as well as any company to actually do well in that type of environment. Wallets have been stretched. If they get stretched further, people are still going to look for value. They're still going to want to eat. Food is the largest thing that we sell. I don't want to be dismissive of sort of the macro environment and some of the things that are in the news, but I feel like we're in a pretty good place right now. 3.5 years ago, three years ago, we had our Investor Day, and our posture at that point in time moving forward was, I think, considerably different than what the last five years had looked like. I think for some investors, it was like, well, a show-me story. I feel like we've done a pretty good job of that over the last three years. We've grown operating income faster than we have revenue. In fact, if you adjust for some one-off things, like our claims expense last year, roughly twice the rate of growth and in the high single- digits, and I think there's even more opportunity from there. What's happened in our business is it has fundamentally changed over the last decade to where e-commerce is roughly 20% of our business today. What that allows us to do is participate in other profit streams like advertising, like Fulfillment Services, many of these other things that are growing much faster and have higher margins, and you've seen that translate into our P&L and the benefits there. As I look forward over the next several years, I think I'm probably more excited than I was three years ago when we were making what was seemingly sort of a bold statement at the time, because I think the opportunity is just as immense as it was at that point in time. Excellent. I started covering retail stocks in 2003. I've watched a lot of legends ride off into the sunset, and what Doug McMillon put in place is right up there with so many legends of retail, and frankly, on par with the turnaround story that Frank Blake executed at The Home Depot. It's gone even broader, because he took Walmart down so many different paths that they weren't there before, but also had to fix the core business. As you think about, as we look forward and think about John's leadership. Can you talk about how perhaps he's different, how the strategy maybe is different, how he executes maybe is different, and just a broad question on what does John bring to the table? Sure. I'd be happy to, but if you'll allow me, I want to spend a moment just talking about Doug, because I do agree, he was a titan of retail. In fact, I would say more than just retail. He was a titan within the business community, and his legacy will be there forever at Walmart. It's amazing when you think about our 63-year history, how few CEOs that we've had. Doug took the helm for about a 12-year period, if my math is correct, and left a lasting impact on every single associate that ever interacted with him. He obviously was the architect of a lot of the improvements that we are realizing the benefits of today, the investment in price, the investment in wages, the investment in technology, all took off underneath him, and I think that has positioned us to be successful for decades more because of that. What's interesting about John is actually the consistency with Doug, but not only in terms of their strengths, but also how they lead. They're both very much servant leaders. From an investor perspective, what I would encourage you to think about is this is going to be very much a consistent strategy. This is not a pivot in any way. In fact, if you look at the parts of our business that have probably changed most appreciably over the last five or six years, it's things like advertising, membership, supply chain automation. John's fingerprints are all over those things. He was the architect of many of those things. I think very much it will be a continuation of what you've seen over the last several years. We're all very excited to have John at the helm. John is not a newbie in our business. He's been there for 35 years. His retail knowledge is as strong or stronger than Doug's, and Doug would tell you the same thing. It's fascinating to walk a store or club with him and the amount that you can learn just through that interaction and experience. I emphasize this point, Chris, because I think in a world of changing commerce where we talk about agentic commerce and things like that, the thing that is probably most underappreciated is the complexity of end-to-end retail. Being really good retailers matters no matter what the channel is that someone is going to be buying something from one of our stores or e-commerce sites. Yeah. Awesome. Dovetailing back to your first response, there's a lot of crosscurrents right now. On one hand, you have tax refunds. On the other hand, you have a consumer that seemed to be more price inelastic as 2025 progressed, especially the low to mid end, and now gas prices have surged. Historically, Walmart has been more sensitive to the ebbs and flows of gas prices. Can you just talk broadly about what you're seeing from the consumer side? Are you seeing the uncertainty and the stress having an impact? To what extent do you think that tax stimulus is perhaps offsetting that? Sure. I would start with the fact that I am probably more constructive on the consumer than what one would glean from reading the headlines of news publications. There's a lot of alarmist headlines and what the impact can be on the consumer, but the consumer continues to be very resilient. In fact, if I go back to our last earnings call and the outlook we provided on the quarter, we still feel like that's pretty much intact. I mean, it's very consistent with what we expected at that point in time. There have been puts and takes. As an example, I think tax refunds has had a bigger benefit than what we imagined at that point in time when we gave guidance for the quarter. Offsetting that, we did not expect to be at a war at that point in time and certainly didn't expect oil prices to get above $100 a bbl. Something I monitor closely is our look at our consumer health, our customer's health, and members' health. They're continuing to buy things. I think it's too early probably to provide a verdict on the impact of fuel prices, because how high those go and how prolonged that is can certainly have an impact as you get into cost inputs like fertilizers and things like that can then bleed into food prices. We'll keep an eye on that. At the same time, if you were to go back to the mid-2000s, and I was in the airline business in the mid-2000s. When we had the oil shock there, as context, a $1 per bbl increase in the price per barrel of oil cost us $300 million a year. This was a company that was basically making $3 billion. When it went up $50 over that period of time, the ability to manage that is pretty challenging. We're not impacted like that. Certainly, the higher fuel prices and higher oil prices have an impact on us, but well within our ability to manage at this point in time. I think the thing that we're focused on is consumer health and what can happen there. The last thing I'll say on this is if you do subscribe to some of these more doomsday scenarios around what can happen to oil prices, oil got to $130 a bbl in the 2000s. Inflation adjusted, that's about $200 a bbl now. Things like horizontal drilling and fracking were just taking off right then. I think we're in a much better position globally from a supply perspective to be a little more insulated from some of the shocks than maybe what we were at that point in time. Remains to be seen, but we'll keep an eye on it. Just to rephrase that response, because it sounds like you talked to the top line as well as to the margins. So far, the consumer absorbed it. There's some puts and takes that have roughly offset. The question becomes if prices stay this high for a longer period of time, then the risk is something could go to the downside. Yeah, I think there's a little bit of a tell to changes in consumer behavior. The example I gave in a meeting earlier this morning is my son lives in California, and gas prices there are $6 a gal. He drives a Jeep, pretty fuel inefficient vehicle, and he's beginning to complain about that and saying, "Maybe I need to get something that's more fuel efficient." Those things take time before you see the types of changes in behavior. So I think we need to keep an eye on this. Again, I think the consumer has shown a resiliency and probably is a little healthier than what one would glean just from kind of reading publications. Understood. Then just to clarify in terms of how energy costs and diesel and ocean freight and so forth, how does that impact the margin of your business? Is there a shorter-term answer versus potentially a longer-term answer? Yeah. Well, there's a direct cost impact. We're one of the largest trucking operations in the world. We certainly are impacted by that as a direct cost input. There's obviously the impact as a cost input into food and grains and things like that. We'll need to keep an eye on that. We've been able to manage what is in excess of $100 million headwind within the levers that we have in the quarter. I think we're probably a long ways before this bleeds into prices for us. Again, we'll have to see what happens and we're wired to keep prices as low as possible as we can for our customers. We're going to continue to try to play offense and gain market share as we've done over the last year and be aggressive on price where we can. Understood. One question that we get from investors is the strength of your e-commerce business, but concerns that retail stores alone were flattish since the third quarter and maybe slightly negative in the fourth quarter. I understand you take the omni-channel view, but is there something to be concerned about? Is it something that you focus on from a management team perspective? Or perhaps there were some factors that we just hadn't been thinking about. We've been asked that question a lot. It's obviously on people's minds. I don't want to be dismissive about flattish in-store comps, but I would actually describe myself as a little more agnostic about that, because I think it is incomplete to just look at in-store in isolation. Because for us, we have 5,000 stores in the U.S. and those are fulfillment nodes, delivery nodes for our customers that enables the e-commerce business that we have. It enables us to serve 95% of America in less than three hours. The level of comps, if they're down appreciably, certainly that matters to our business. I think you've got to look at the whole picture and look at what we're doing from an e-commerce perspective as well. E-commerce is roughly 20% of our business right now, and so it's a very meaningful and fast-growing part of our business. We'll keep an eye on in-store comps, but again, I think that paints an incomplete picture when you just look at it in isolation. Understood. You mentioned this earlier about the domestic pricing environment in terms of the grocery side of the business potentially having some lag off of energy prices and fertilizer prices. Can you talk about more of the here and now? How are you seeing the pricing environment? There's been some changes at some of your peers on the management front. How do you think about your price gaps and the need to continue to push that lever? Yeah. I think the pricing environment right now is very rational. I like where we are competitively positioned there. As we talked about last year, as a year ago sitting here on Liberation Day, we talked about playing offense and leaning into price and attempting to gain market share. We've seen that happen. Importantly, that market share that has been gained, we're seeing a retention, a higher level of retention among those new customers than we ever have before. We feel good about our price gaps. I think, by some measures, they're at a wide point to where they've been historically. This is an ever-moving game. This is something we'll need to continue to monitor, but I think we're well equipped to be very competitive in this space. It's also, as you know very well, Chris, it's tough sometimes to generalize when you talk about price gaps. It can be different regionally. It can be different based upon certain competitors. There are definitely opportunities that we're addressing and will continue to address as we look across the competitive landscape. I guess how long do energy prices have to stay here to start to see a translative impact into food inflation? It's tough to give you an answer on that. The level of price increase and how prolonged that is influences that. Is there some expectation that it would come down at some point? We'll try to absorb the cost increases that we've experienced thus far to the extent that we can. At some point, it is a cost input. At some point, you'd likely see some impact on pricing. You see this with some of the airlines right now passing on fuel surcharges. By the example I gave earlier, you can perhaps see why they're quick to act on that. We're going to try to keep prices as low as we can, as long as we can. Understood. Can you step back and provide an update on the development of the Marketplace, and provide some perspective on its scale and growth trajectory? I know you've continued to contemplate internally disclosing GMV, but where do you think you are in terms of that flywheel? Is it still accelerating? How has the reception from brands and third-party sellers changed over the past couple of years? There's a lot to that question, so if I miss something, feel free to follow up. I'm really pleased with the progress of our Marketplace business. From a total revenue perspective, it's growing roughly at a 20% rate. I feel really good about that. I think just as importantly is the benefits that it's providing to our customers. We see categories like home, hard lines, fashion, that are all growing north of 30%. These are areas that we've been a little weaker in on a relative basis. We've talked about the need to grow our general merchandise assortment. This is a great opportunity to do that. During the holiday period, I think we had 3x the number of sellers that we had versus a year before. Today, we've got roughly 500 million SKUs on our Marketplace. We want to continue to grow that, continue to provide broader assortment. There are specific brands that we're targeting. There are about 300 brands that we think of as must-have on our platform. We're about halfway penetrated into that, and probably 75 of those have happened in the last year. There can be a bit of a halo effect with some of these brands as well. When you begin to add Apple products, then maybe another product follows on because of the perception that goes with that. This is a big initiative that we have, is growing general merchandise is one of the major pillars of our strategy going forward. Marketplace is the vehicle by which we'll do that. I'm curious how the dialogue with the brands have changed and adding 75 this year, roughly halfway there to the 300. To what extent are you slowing it yourself in terms of making sure you have the right experience for the consumer versus brands trying to figure out if walmart.com is the right customer acquisition base? Yeah. It's less because we're trying to pace it. There's a pipeline that exists in terms of doing this, and oftentimes you start small, demonstrate that you can grow their share and that it's good for them, and then you add on more to that. Sometimes you might start online and then based upon that experience online, then move to in-store. There are plenty of examples of doing that. I think just as hopefully investors have realized that Walmart has changed a little bit in the last few years, our vendors are as well. They're recognizing that if you want to be selling at a place that is acquiring new customers, growing share, Walmart is a property to do that, be it physical or digital. It follows that advertisers are doing the same thing. Advertisers are going to chase the eyeballs, and as we're growing share, we have more affluent customers that are coming to our properties. That's where they want to advertise as well. As you think about that continuing to grow that 150 roughly to the 300, is there certain categories where you feel you're further along, versus other categories where you're continuing to catch up, so to speak? Broadly, I would say general merchandise is our focus. Without getting into subcategories, I think there's opportunity in all of those. I talked about some of the progress that we've made in fashion and home and hard lines, but baby apparel is another one where we've made good progress. Feel good about that. There's still a lot of work to be done, but I don't want to cast this as just something on our to-do list. We've actually made really good progress. I'll give you an example. If you take fashion as a category, if I include first- party and third- party, so including everything we're selling in our stores, fashion as a category has grown in the low teens percentage year to date for us. People don't think of that as being a strength of Walmart, but that shows you two things, both the quality of the improvement in the assortment that we have, as well as the broader assortment overall. The fact that we can be growing something low double- digits, year to date, I think is a really encouraging sign about how our business is changing. You talked about, you characterized it on the fourth quarter call that 3P and Fulfillment Services are still in an investment year, so to speak, and that there was an expectation that this alternative profit pool was going to turn to profitability. What drives the inflection ultimately? Is it just simply the scale of the business, or is there actually some sort of source of funds where your investment, quote unquote, recedes? I think scale is an important part of it, but also further penetration into Walmart Fulfillment Services. To frame this, roughly half of our GMV that we sell on our Marketplace is from sellers that are availing themselves of Walmart Fulfillment Services. When you consider the delivery promise to a customer, the ability to deliver same day or next day, when someone avails themselves of our Fulfillment Services, we do a really good job there. When the seller is taking that action on their own, sometimes it might be three days, four days, five days. That's not as good of an experience for our customers. I think that Fulfillment Services for us, like if you're a seller, you're not actually using us properly unless you're using Walmart Fulfillment Services because of what we're doing there. I want to be really clear on this, there are parts of our business where maybe we're structurally disadvantaged or something like that, but Fulfillment Services is not one. We aspire to be the best in the world at Fulfillment Services. I'm encouraged to see that growth, and I think the economics around that will also inflect and help us with the overall profitability of Marketplace. Understood. Focusing more on the gen merch side of the U.S. business. Last year, despite tariff pressures, Walmart invested in price and gen merch, which is obviously a hallmark and a religion at the company to drive share in general merchandise, and it certainly paid off from a share perspective, particularly as the year progressed. We're now at a really interesting moment post the Supreme Court decision. As many of the specific heavily imported categories are coming in at a lower tariff rate, particularly some of the categories you've mentioned, in the back half of the year, versus the back half of 2025. My question is, how do you think about the structural nature of the prices that are in the Marketplace today? It seems like just given how inventory turns and what seems like a pretty good consumer backdrop, there's not a risk that prices actually go down. As you think about the year progresses and you get the back-to-school and holiday again, what's your expectation in terms of the stance that you might take in some of those categories that do have lower tariff rates? Where we can and where we think it makes sense for us from a P&L perspective, we'll certainly try to invest in price where we can. It is interesting what a difference a year makes. As we were sitting here a year ago and had the prospect of who knows how large are tariffs over the forthcoming time period, but I think we've managed that pretty well. We paid billions of dollars in tariffs to the government. We've absorbed a lot of that. In some cases, we had to pass along that price increase to customers. I know there's been a change in terms of what the tariff environment is right now versus a year ago, but I don't think we're in a period of time that I would describe as being highly certain of what it looks like after that. Our posture is, I think, very similar to where it was a year ago on this, and in terms of our buying activity, what we're assuming around the level of tariffs overall, I think it's very consistent with that. Overall, from a basket of inflation perspective, food and consumables are kind of flattish, and we do see general merchandise has continued to be more inflationary and kind of the low- to mid-single digits. Where we can, as we've done over the last year, we're going to try to be very competitive on price and absorb some of that if it makes sense for us so that we can continue to gain share. Understood. Is there an upside opportunity to maybe talk about as you think about the ability to retain, hold price in the market, keep strong price gaps and drive share, but at the same time take some of those billions of dollars that you paid back into the P&L? Yeah. Well, I think there's a balance to that. Sometimes you might let that fall to the bottom line. Other times you might want to invest that if you think that the LTV around that decision is better that way. I think our teams strike a good balance there. We've been in a period of time where wallets have been a little more pressured, if you will, and so there's probably a greater need, particularly if you think about where fuel prices have been, to make sure that the consumer is still able to spend. The way that our merchants view this is, how do we optimize the basket of items that they're buying. We might absorb price increases or tariff increases in one area in order to allow them to buy more in a different area when we consider the basket of items that they buy. I think our teams have done a good job managing that, and I think the environment will be very consistent as we look out over the next coming quarters. Understood. It seemed like just on the tariff refund question, I'm sure you've been asked about this, the supposedly tariff refunds are going to start flowing to companies in June. What are your expectations around the tariff refund process? Yeah. It would seem to be very complex, and by extension, probably not something that's going to happen very quickly. We'll certainly avail ourselves of the opportunity that we have to get a refund, but when that happens remains to be seen. I'm not close enough to it to really have a good understanding of how quickly that can take place. There is a precedent for this back in the 2018/2019 time frame, and I think it was a pretty cumbersome process at that point in time. We effectively kind of absorbed this in our day-to-day business as we incurred these tariffs last year, and I think the reverse of that would be true right now. It would be recognized in earnings from an accounting perspective. That is a P&L benefit if and when we should get that refund. Understood. That's very helpful. The advertising revenue story has been incredible, how quickly it's grown, how quickly it's scaled. Can you talk about what has been driving the growth of the ad business, how you think about the trajectory of growth going forward, and why do advertisers select Walmart versus perhaps another option? Sure. I think part of it is what I said earlier, is we're gaining customers and customers from all income cohorts. Advertisers are chasing the eyeballs, right? For us, importantly, e-commerce is this newer part of our business that didn't exist to the extent that it does now historically. That's given us new options to, or new opportunities to advertise to customers in very rich contextual ways that is actually, in many cases, improving the customer experience versus degrading it. I think this will be like the growth that we've seen here and the benefit to our P&L will continue into the future. I'm really excited about the rolling out of our VIZIO acquisition. VIZIO gives us an ability to participate in the profit streams that exist from selling TVs on the software side, where historically we've only done that on the hardware side. Importantly, it allows us to do non-endemic advertising. Instead of just advertising for a product that we sell, we can advertise for a F-150 as you're streaming media on your TV. This is yet another way that I think we can continue to improve the P&L through advertising. I'm very excited about it. I know there's discussion around whether there will be channel shift related to agentic commerce, and some of that may be true, but it doesn't change my outlook on advertising. As you're thinking about that non-endemic opportunity, I don't know if there's any quantitative you could provide or maybe like what inning are we in of serving F-150 ads, and was there any unique observations in terms of what types of non-endemic advertising that you're drawing in? Well, we are doing a very small amount of that already. We're rolling this out and we'll continue to do more. If I were to say innings on non-endemic advertising, we're probably in the first inning. A long ways to go there. On advertising in general, though, I still would put us in what I would describe as early to mid innings too. I think maybe a way to frame this is if you look at what maybe best in class is in terms of advertising dollars as a percentage of GMV, that's easily twofold where we are today. What's exciting to me is we can get further penetrated into that as a percentage of GMV, but at the same time, we're growing the addressable market too, or growing our GMV. I think there's a big opportunity for us. Importantly, one of the changes that John made when he took over as CEO is to approach these growth areas of the business from more of a platform perspective. Seth Dallaire used to run part of these businesses for us in the U.S. He now has an enterprise remit, and so the same things that we're doing in the U.S., we can do in Mexico, we can do in Canada and other parts of the world, which are much further behind where the U.S. is right now. There's a big opportunity. It's a great segue into agentic commerce, especially after your recent announcement of integrating Sparky with ChatGPT. Can you tell us more about that new feature? More broadly, where are we in the agentic commerce journey, and how do you think it changes online shopping? Yeah. There's a lot there. Well, yeah. Again, to stick with the baseball analogy, we're maybe first pitches of the ball game here in terms of where we are here versus where it could go. What I would want all of you to take away is we are not sitting back and letting this happen to us. We are helping to shape. We were one of the first to partner with some of the hyperscalers to help contribute to that outcome. We also have Sparky, as you mentioned, which is our own agent. The early returns on this are really, really encouraging. Roughly half of our app users today are engaging with our commerce agent, Sparky, in some way. Of those customers that actually buy something through the Sparky experience, the basket size is 35% higher than what it otherwise would be. At this early stage, I think that's really exciting for us. These experiences are more contextual, they're richer, they're allowing us to better serve customers than we could without the search history and the relevance of all of that. The way that I think about serving these customers today, it's done on a customer by customer basis versus just serving a category of customers that buy cereal, as an example, or buy size eight tennis shoes, where it's individualized to the customer basis based upon their preferences, their data, their search history, what they like. I think it's a huge opportunity for us. People have talked about Walmart for years as having these rich data assets, but I don't know that that has necessarily translated up to this point into the P&L benefits. We're going to be seeing that with what we're doing with agentic commerce. I'm not sure if you know the answer to this question, but as you think about that basket build, is it, well, I want to make carrot cake for Easter and you're selling the pan as well? Any sense on how that 35%, what side of the business, in category-wise, that's coming? Yeah. It's coming in all categories, but if you would imagine an experience where you buy something and we have the context for why you are buying that. If you're throwing a birthday party for your kid or whatever it is, that allows us to offer up other things that you might want to buy in tandem with that. It's much richer than saying, customers that bought this item also bought this item. We actually have that search experience and the context behind that query to know that if you bought this item, well, these are actually items that are specific to your use case. That's where we're seeing some of the early returns around this. Taking the, I guess, more concerned view about agentic commerce, there's a big question on how the growth of advertising changes as agentic commerce, direct agentic commerce, grows over time engagement goes. Can you help us think about how you're trying to get ahead of that, and how you think about the risk around the LLMs diminishing your ad revenue potential? There are both puts and takes, I think, in this space. Will there be some channel shift, where maybe we're disintermediated in some way and don't control the customer experience? Yeah, I would expect that. I see it with my own behavior in some cases. At the same time, offsetting that, and we're seeing this already, is that a channel for us to acquire customers as well. Very, very importantly for us is the experience that customers have when they're shopping at maybe one of the hyperscalers. You can imagine a few variants of what that experience could be. It could be just simply a dumb pipe where you've got sort of the checkout experience and not much more than that. Second, you could have an experience where it pipes you back over to Walmart and there's friction from a customer perspective, or it can be embedded, where we actually have what is effectively our app within their experience, and we're controlling the actions, we're controlling the data. That's what we're doing. We still retain that touch and that contact with that customer. That's very important to us. Importantly, when a customer does come to a Walmart property and they're using Sparky or just searching on our site, we get to participate in what the context of that query that they had at one of those hyperscalers. We know that if you bought a sleeping bag that you were searching for a camping trip that you're going on. Having that context allows us to serve up a richer experience when they are at our properties. In terms of advertising dollars, will you see some ad dollars shift? I would imagine so. At the same point in time, if we have a richer context associated with that, it allows us to have even more tailored advertising, which might actually even increase the ROAS, the return on that advertising spend even more with that context. Yeah. Bigger basket and maybe more general merchandise, too. Yeah. Exactly. Awesome. Just finishing up on the AI topic. You talked about quantifiable benefits in the P&L from AI. Can you talk more specifically of where you expect those benefits to show up and any quantification of how scaled they could be? I think we'll begin seeing some of those benefits this year. Will it be noticeable to investors? Probably not, on the margin, when you consider a revenue base of $700 billion. We're already seeing some benefits, but still early on. Fundamentally, we should see higher conversion on some of the baskets related to this. When you have discovery taking place and that's translating into people searching for items and conversion being higher, in some cases appreciably higher, it's a better experience for customers and it translates directly into P&L benefits for us. Curious, when you laid out that chart, which I can see in my mind, where margin expansion and cash flows t hat beautiful chart that goes like this over the planning horizon, were you contemplating AI as a margin benefit at that point? If not, where's that change? Yeah. That was almost a year ago where we laid out that slide, and we were contemplating AI. I don't think we probably had the insights at that point in time that we have today. I'm encouraged by this. I think this is additive to our business. Does it change what we're going to share as an outlook right now? Probably not. I think it's also prudent to be measured on this. There's probably still a lot that we don't know and we'll need to see play out. Overall, I think it creates a better shopping experience for customers, and that should translate into improvements in our P&L. Understood. Coming to another significant alternate profit pool, let's talk about memberships. Starting with Sam. Sam, you recently announced a membership fee increase. Can you talk about the thought process behind that, given the broader world at large? Yeah. What's going on with the consumer? Well, it's been four years, almost four years, since we had a price increase for our members. This $10 increase came after adding a considerable number of benefits to our members over that period of time. Most notably, what we've done in digital channels. Roughly 60% of our members engage with us digitally, and that stands to reason that's a higher value attached to that consumer. We see more engagement with them, more shopping behavior. The progress that we've made in e-commerce there has been pretty astronomical over the last year. You've followed this, Chris. The ability to get free delivery from Club and lowering the basket size for what that qualifies for, I think are really important improvements for our members. They're responding. You see it in member behavior. We felt like this was appropriate to do at this point in time. Decisions like this take months, if not quarters. It's not something that we just woke up a couple of weeks ago and said, "Let's raise prices the next day." This was in place for a while. Then, dovetailing to Walmart+. I think in our household, we have memberships, feels like everywhere. Subscriptions absolutely everywhere as well. Where do you think Walmart+ fits into the broader array of memberships that it competes against? How have your thoughts changed between this as a sort of grocery delivery business versus something broader? Yeah. What I'm about to say is maybe a little bit of a provocative statement, but I feel strongly about this. I think that Walmart+ should be the most essential membership of any membership program in America. When you consider our ability to deliver within 3 hours, to provide pharmacy, general merchandise, fresh food in that window of time, I think there's a lot of opportunity here. Now, we need to continue to improve our part of that promise. Where I talked about one to two day delivery earlier, we know we have progress to make right there. We are the only company that I know of that can deliver within the window that we provide all three of those categories to 95% of America today. We maybe over time add additional amenities to that program. I would expect to see continued tweaks there. I think we also need to get better at our fulfillment promise there. We still do not all the time do the best job. I heard an example from an investor earlier this morning where we had an opportunity for improvement. When you consider what we provide and the scale that we have and the ability to, in some cases, get something to you in as quick as 15 minutes, I think that we should be the most essential membership program in the United States. Incredible. Coming back to the margin side of the story. Membership is profitable, advertising's profitable, 3P, WFS, data services. How do you think about, in that five-year planning horizon, the profitability of the ones that aren't profitable and how they inflect over time? Marketplace, we talked about. We'll continue to invest in that. Fulfillment Services is contribution margin positive, but there's a considerable infrastructure behind that we have a ways to go before that's profitable. Really the way that I think about this is not so much on the individual components, but as it matters more to you when you look at our P&L. Like what's happening right now, we've boasted about achieving profitability in the U.S. from an e-commerce perspective when you include advertising and Fulfillment Services and these other parts of our business. An e-commerce transaction is still less profitable than someone going and taking something off one of our shelves than an in-store transaction. Within our planning horizon, though, we expect that to change. We expect that we will get to a point where an e-commerce transaction, fully loaded with the other benefits that I talked about, will become more profitable than an in-store transaction. That's a monumental point in time for us because, at this point in time, every incremental e-commerce transaction is still degrading our overall margin because of the architecture of that right now. That's not always going to be the case as we grow advertising and these other profit streams, as we densify our network, as we continue to have supply chain automation, as we continue to see customers that take advantage of getting expedited delivery, 32% or a third of our transactions today, someone might even have free delivery, and we'll offer them the opportunity to have that in an hour, and they take advantage of that. As all these things continue to grow and we scale, then I think we're going to see dramatic improvements in our P&L. That is the benefit of a digital ecosystem, is the ability to scale at very attractive incremental margins. We're seeing that. We're seeing double-digit incremental margins in our e-commerce business today, and that's just going to change our P&L as we move forward. Yep. As you think about the incremental margins over the overall business and how that's driven the acceleration in the operating profit dollar growth, how do they scale over time? If we go back in time before Doug embarked on this investment cycle, you had a Walmart U.S. business that was 7% segment operating margin. Isn't there an opportunity to get back there? What does that mean for the overall operating margin of the business? Yeah. I do think there's an opportunity to get back in that range. It won't be in the next year. I don't want to overpromise here, but as we think about our planning horizon, we're certainly continuing to see margins go up and to the right. The structural advantages that we have around this are immense. If you consider if you're building a digital platform or creating a new app, the thing that you're probably most focused on is customer acquisition. That's the benefit that Walmart has. We have hundreds of millions of customers that are coming to our properties every single week, and we're scaling a platform that is allowing them to shop us in the way that they want to, the way that they shop at other retailers. I think the benefits are going to continue to accrue to our P&L here. Again, a very attractive incremental margins, attractive marginal rates, low marginal costs that maybe we get back to a point within the not-too-distant future of margins at the overall level that we saw historically. For the U.S. business, the same? For the U.S. business, yeah. Now how do you think about international growth, some rapid growth businesses that are lower relative margin? Does that deter you getting the overall operating margin of the business back to 6%? No, I don't think it does because at the same time, you have large businesses, like if you take Flipkart today, that are contribution margin positive but are losing money overall. It's the same story on scale and growth there. When you are able to grow at a low marginal cost and overcome some of the platform infrastructure costs there, that ultimately turns positive, which inflects our P&L as well. I also think we have big opportunities both in Canada and Mexico to improve the margin structure there. We have a relatively low e-commerce penetration in each of those entities, certainly in Mexico. We're taking the same plan that we had in the U.S. and applying that to international entities, which give us a lot of opportunities. I'm hesitant to say what the cap is on where our margins can go, but within our planning horizon, they continue to go up. We're not reaching this point to where you begin to see the curve bent for us. Understood. Just wrapping it up, an open mic question. What gets you most excited? As you think about all the things that we've talked about and everything that we haven't talked about, what are you most excited about for the Walmart story? AI is certainly, I think, a really exciting thing. That's advancing so quickly before our eyes, and I think our opportunity to lead there is a pretty precious opportunity, and so I'm excited about that. I would say second is I'm excited about how we can better serve our customers. Like when we look at what we call a perfect order today, we grade ourselves pretty hard in this category. There's a lot of opportunity for improvement. As we've seen, as we do make those improvements, they directly translate into P&L benefits with customers coming back, engaging more. I think there's improvements we can make in assortment, and we tend to focus on general merchandise, but I think food is a big opportunity. Walmart is not a place that you just come and get American cheddar and Swiss cheese. You should get the broad assortment of everything that you want for whatever recipe that you're making tonight, and so there are so many opportunities like that. I think food is an enormous opportunity for us as we broaden our assortment there. Being a foodie, it's something I'm passionate about. I think that we can better serve the customer in many ways to where we are just more relevant overall with the consumer in the future than we are today. Excellent. John David, thank you so much for your time. Thank you, Chris. Appreciate it.