$60 For Every Man, Woman and Child

Walmart (WMT) released its earnings report yesterday. I’m always astounded by the size of this company. For 2010, Walmart had sales of $418.52 billion. That works out to an average of $1.14 billion in sales every day of the year—or nearly $50 million every hour of the day. Another way to think about it is that it’s equal to roughly $60 in sales for every man, woman and child on planet earth.

Despite what many critics may think, Walmart’s profit margins are very small. For 2010, Walmart’s gross margins worked out to 25.3%.

Gross margin refers to the profit compared to the variable cost of each item. If we go down another level to operating profit, which includes fixed costs, Walmart’s profit is just over 6%. Then when we get to post-tax net income, Walmart’s profit margin is just 4%.

As impressive as Walmart’s numbers are, ExxonMobil (XOM) will probably top them this year. The current consensus is that XOM will have revenue of $460 billion this year.

Posted by on February 23rd, 2011 at 7:50 am


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