We ended the quarter with inventory about flat to last year, which is better than we anticipated and even better when you consider how inflation lifts that number. And they did it while improving in-stock levels. I'm impressed with how they brought it all together, and want to highlight our store club and supply chain associates who handled a lot of volume to make this happen. As we navigated the short term, we also advanced our strategic priorities. Big picture, our strategy is simple. It's to bring our purpose to life for those we have the privilege to serve. We're a people-led, tech-powered omni-channel retailer that's dedicated to helping people save money and live a better life. That's who we are. Why do we exist? It's to help people save money and live better.

How do we do it? By being people led with clear values, a unique culture and tech powered. We're a people business focused on customers, members and associates. We're constantly adjusting to put the right combination of wages, benefits and education in place so that our people can build lifelong careers and achieve their full potential. You can start your career assembling bicycles and end up leading all of our U.S. stores. You can start as a cashier and become a truck driver. You can start unloading trucks in a DC and grow to oversee an automated system moving freight through that DC. We provide opportunity even as we continue to innovate through technology and prepare our business and workforce for the future. One of the things I have always appreciated about this company is that it's naturally hedged.

If customers want more of something and less of something else, we shift our inventory. If the economy is strong, our customers have more money, and that's great. If things are tougher, they come to us for value. With today's inflation, we're continuing to see that happen. We're gaining share across income cohorts, including at the higher end which made up nearly half of the gains we saw in the U.S. again this quarter. And we're also capturing a greater share of wallet at Sam's Club in the U.S. with both mid- and higher-income shoppers. Our goal is for the experience they're having in our stores and clubs combined with our current capabilities for pickup, delivery and membership to result in them choosing us even as inflation eventually subsides.

As we plan this new fiscal year, we've anticipated stubborn inflation in dry grocery and consumables in particular, which will have some mixed impact. We'll stay focused on general merchandise and earn sales in those categories to offset that impact as much as possible. When we think about our business today compared to what it was during prior economic downturns, we now have a more compelling offer, a true omni-channel experience that makes us optimistic that more higher income families will continue shopping with us across categories because we have pickup, delivery and membership. And we're improving in categories like apparel and home. Our recently remodeled U.S. stores have a focus in those areas, and the early response from customers is promising.

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We're also improving our e-commerce assortment and presentation in those categories. We've always been known for great prices. And because of the work we've done around pickup and delivery from stores, clubs and expanded assortment through FCs, we're increasingly known for the convenience we offer. In fact, our U.S. customer feedback showed strength in price and convenience. Our reputation for price remains strong, and our score for convenience has risen to nearly the same level. Our Walmart Plus members recognize our strength for convenience even more than the average customer. As it relates to our customer or member value proposition, we continue to have a strength with respect to value, while we're expanding choice by growing our assortment on Walmart.com and we're improving as it relates to experience.

Being an at-scale omni-channel retailer creates unique opportunities to innovate in the area of experience. That includes products like scan & go at Sam's Club and a newer in-house conversational AI platform enabling a voice and chat capability being used by more than 50 million customers and an average of 1 million associates across the U.S., Mexico, Canada and Chile. We're driving a lot of change inside our company. We know where to tap the brakes on cost and inventory, but our focus is more on the gas pedal with respect to our strategic improvements related to assortment growth and our customer member experience. We'll keep shaping the business model by scaling our newer mutually reinforcing businesses in areas like marketplace, fulfillment services and advertising.

It's exciting to see our global advertising business grow to $2.7 billion for the year we just completed. That's nearly 30% growth. Over the last three years, while our frontline focus was on navigating the pandemic and inflation, we still launched and started scaling new complementary businesses using the technology and expertise we developed over time. You can see this in some of our recent announcements. The partnership we announced with Salesforce to help scale local fulfillment and delivery solutions for customers on their e-commerce platform is a good example, or our new Walmart business e-commerce site is another, where we're helping small and medium-sized businesses and nonprofits save money and spend less on purchasing the items they need every day.

Our fast-growing businesses in India, Flipkart and PhonePe announced a full separation, which will allow both companies to focus on their own growth paths independently and help unlock value for shareholders. Flipkart has continued to strengthen its market leadership position in e-commerce and is entering this year with good momentum. PhonePe also announced the closing in January of the initial tranche of a fund raise that values the business at $12 billion pre money. This is more than double the previous valuation just two years ago. And our Sam's Club U.S. team announced expansion plans that will have us opening more than 30 new clubs across the country over the next several years in addition to a multiyear plan to invest in and modernize our supply chain, especially in the U.S. I'll wrap up my comments today by saying thank you to our associates.

I'm grateful for how they continue to step up for our customers and members, and I'm impressed by their creativity and resilience. We've worked through a lot of the operational stress in our business from last year, and we made progress on strategic initiatives as we did it, and we're doing it in a way that's uniquely Walmart. John David, over to you.

John David Rainey: Thanks, Doug. I'd like to start by thanking our customers, associates and partners for helping us deliver a strong quarter to wrap up the year. We're pleased with how we finished the year. Our team demonstrated our agility and responsiveness to overcome the operational challenges from supply chain disruptions, excess inventory and the shift in our merchandise mix. For the full year, enterprise sales on a constant currency basis grew more than 7%, and we surpassed $600 billion in annual sales for the first time. Adjusted EPS declined 2.6% for the year. Our performance in Q4 was better than our expectations due to sales upside and good expense leverage. Constant currency sales grew 8% with strength across all segments, including strong performance throughout the holiday season.

Walmart U.S. comps increased 8.3%, including 17% growth in e-commerce with a combination of pricing due in part to inflation and share gains. Sam's Club U.S. delivered its 12th consecutive quarter of double-digit comps with growth of 12.6%, excluding fuel and tobacco. And constant currency sales in Walmart International increased 5.5%, led by Walmex. As I discuss our profitability, it's important to note the reorganization and restructuring charges within the International segment affect year-over-year comparisons. So my comments regarding Q4 results will focus on the business, excluding adjusted items. Gross margins were down 83 basis points, largely resulting from additional markdowns taken to address carryover inventory balances, mix headwinds and underlying inflation in our cost structure.

With strong sales growth in the quarter, we levered SG&A expenses by 89 basis points. Taking all this together, adjusted operating income grew nearly 7%. Adjusted EPS of $1.71 was better than we expected going into the quarter. GAAP EPS was $2.32. The difference between adjusted and GAAP EPS reflects a $1.16 benefit from unrealized gains on equity investments, partially offset by a $0.55 charge related to business reorganization and restructuring in international. Inventory at quarter end was relatively flat to last year. This includes a nearly 3% decrease from Walmart U.S. I'm pleased with how our teams responded to the challenge early in the year to aggressively rebalance inventory for the current environment, and it sets us up in a really good position going into the year.

Let me briefly reference key highlights for Q4 by segment. For Walmart U.S., comp sales were strong throughout the quarter, and December was the largest sales month in Walmart U.S. history. This was led by strength in food sales, which increased high teens partially offset by a mid-single-digit decline in general merchandise sales with softness in toys, electronics, home and apparel. The effects of product mix shifts have negatively impacted our margins. Over the last year, grocery and health and wellness sales, which have a lower margin than general merchandise, have increased by 330 basis points as a portion of our mix. We continue to see strong share gains in grocery with nearly half coming from higher income households and private brand penetration increased over 160 basis points as customers prioritize value.

Inflation remained high, up mid-teens in food categories, which was similar to Q3 levels. E-commerce sales were led by continued strong growth in store-fulfilled pickup and delivery in Q4. Over the last two years, store fulfilled delivery sales have nearly tripled, and we're now doing over $1 billion a month, which gives you an indication of why we're so excited about the progress here. Advertising sales were also strong this quarter, up 41%. Higher sales and lower COVID costs contributed to SG&A expense leverage, which offset gross profit pressure, resulting in operating income growth of 3.8%. In international, strong sales trends continued with growth of 5.5% on a constant currency basis led by double-digit growth in Walmex in China. Currency negatively affected reported sales results by about $900 million or an approximate 340 basis point headwind to growth.

Q4 sales benefited from successful festive events across our markets. Year-over-year comparisons were negatively impacted by the timing shift of Flipkart's Big Billion Days event to Q3 this year versus Q4 last year. Looking at the second half of the year in total, International sales grew more than 9% in constant currency. E-commerce sales were strong with penetration at 21%, with China leading the way at 48% penetration for the quarter. Walmex had another great quarter with sales strength in Bodega stores, Sam's Clubs and 14% growth in e-commerce. Segment adjusted operating income grew faster than sales, up nearly 17% in constant currency, helped by effective cost management across markets. In India, Flipkart continued its strong momentum through Diwali and other seasonal events.

We are particularly pleased to see Flipkart's positive contribution margin expanding. PhonePe's recent valuation that Doug talked about was supported by annualized TPV, reaching more than $950 billion, about 50% higher than just one year ago, while also exceeding more than 4 billion monthly transactions. Turning to Sam's Club. Our strong momentum continued, with comps up 12.6% in Q4 and up 23.4% on a two-year stack. The segment delivered another quarter of record member counts and membership income growth was above 7%. In addition to solid increases in both transaction and ticket, Sam's e-commerce sales were up 21% year-over-year with contributions from both curbside and ship to home. Operating income was pressured in the quarter by elevated markdowns lapping higher co-branded credit card income last year and an inflation-related LIFO charge of $14 million.

With the strong trends at Sam's over the past several years, we're excited to expand our physical footprint through a multiyear investment in new clubs and supply chain optimization. Turning to guidance. As we sit here today, we find ourselves in a similar position to each of the last three years, where there is a great deal of uncertainty looking out over the balance of the year. While the supply chain issues have largely abated prices are still high and there is considerable pressure on the consumer, attempting to predict with precision these swings in macroeconomic conditions and their effect on consumer behavior is challenging. As such, our guidance reflects a cautious outlook on the macro environment, but at the same time, our excitement about our recent results, momentum in all segments and progress on our strategy both for this year and the years that follow.

We are positioned well and convicted about our plan. In FY '24, we expect operating income growth to outpace sales growth. Given the persistence of high prices and the potential for further macro pressures, we are taking a cautious outlook for the year. We are guiding enterprise sales growth of 2.5% to 3% in constant currency and operating income growth of approximately 3%. This guidance assumes product mix pressures persist, but that our business mix continues to improve. Even with an estimated 100 basis point impact from LIFO charges, we still expect to grow operating income more than sales. We also expect Walmart U.S. comp sales growth of 2% to 2.5%, and international sales growth in constant currency of approximately 6% and Sam's Club comp sales growth of approximately 5%, excluding fuel.

Based on FX rates at the end of our fiscal year, we estimate a potential year-over-year enterprise sales tailwind of about $1.2 billion from currency. Our purpose starts by helping people save money and live better, and it's more important than ever in this environment as consumers manage household budgets more tightly, making frequent trade-offs and biosim spending toward everyday essentials. We're reinforcing our value proposition across our merchandise offering, including featuring high-quality owned brands and leaning into opening price points. We're accelerating share gains in our food categories and seeing signs of improved attach rates in consumables and high-frequency purchase areas of general merchandise. Our multiyear sales and operating income targets are just that, multiyear.

In some years, our performance will be higher and in some years lower. We are confident, however, that we're building a business that allows us to grow our top and bottom line throughout an economic cycle. Over the past five years, sales have grown approximately 6% on average, excluding divestitures. This year will likely be lower, but we look forward to getting back to a sales growth trend more in line with what we've delivered over the last few years. Over that same period, operating income has grown at about half the rate of sales growth on an adjusted basis, excluding divestitures. This is the result of important investments we made in associate wages pricing, technology and supply chain, which together strengthened our core business and position us well for the future.

Importantly, while we navigate some of the short-term challenges, we're continuing to invest for the future, invest in ways that strengthen our retail advantages by expanding our capabilities in marketplace, ad platform, data ventures and fulfillment as a service. We're providing more convenience for customers, including pickup and delivery, scan & go and Walmart+. We're working in partnership with our suppliers and sellers to use data, scaled fulfillment capabilities and our rapidly growing ad platform to elevate inventory accuracy and in-stocks, lower the cost to serve and drive improved conversion. All of this improves the trajectory of our ROI and our margin profile. We will continue to invest in our associates through increased pay and benefits to reinforce the latter of opportunities at Walmart, but we're managing our cost in a way that allows us to achieve our operating income goals with these investments.

In other words, we're staying true to our commitment of everyday low cost, enabling everyday low prices. We expect FY '24 CapEx to be flat to up slightly in total dollars compared to last year as we continue the multiyear investment in technology and innovation to optimize our supply chain in stores. Many of these tech enhancements are reaching a stage where we can rapidly deploy them across our network, and we have clear line of sight toward better efficiencies and ROI on these investments in the medium term. I want to call out a few other assumptions for our guidance for the year. Gross margin rate is expected to increase this year, though not back to FY '22 levels yet. We expect gross margin to benefit from the lapping of higher supply chain costs and markdowns from this past year as well as growth from our newer initiatives, many of which have a higher profit margin.

Partially offsetting this, we expect product mix and inflation-related LIFO charges to be gross margin headwinds. Based on current assumptions for inflation, LIFO charges for both Walmart U.S. and Sam's Club could approximate roughly $500 million this year with a headwind equally proportioned across quarters. This is an improvement from the $1 billion LIFO estimate we provided on the Q3 call due to moderating inflation in key merchandise categories and reduced inventory levels. It's important to note that inflation inventory levels and additional factors will influence the aggregate amount. We'll commit to providing updates as we go through the year with sales growth expected at a lower rate versus the prior year and our commitment to continuing to invest in our people and technology, we expect SG&A to de-lever slightly in FY '24.

There are also several below-the-line items that will pressure EPS for FY '24. First, interest expense is estimated to be about $750 million higher than last year. This translates to an approximate $0.20 year-over-year EPS headwind with Q1's impact less than the remaining quarters. Second, we do not expect a repeat of the benefit we realized from certain discrete tax items last year. And as such, expect our tax rate to be more normalized in FY '24 at 25.5% to 26.5%, resulting in an approximate $0.10 EPS headwind. And lastly, in our non-controlling interest line, we expect an approximate $0.12 EPS headwind related to acquiring full ownership of Massmart and Alert Innovation as well as the impacts to minority interest of strong expected performance at Walmex.

In total, these below-the-line factors account for approximately $0.42 of year-over-year EPS headwind. The impact from these below-the-line items offsets the gains we're making in our core business, resulting in EPS being slightly down for the year. We expect full year EPS of between $5.90 and $6.05, including a $0.14 headwind from LIFO. For the first quarter, we expect to see a higher rate of sales growth of 4.5% to 5%, largely due to inflation. We expect operating income to increase 3.5% to 4%, including the negative impact of a LIFO charge of approximately 235 basis points. EPS is expected to be in a range of $1.25 to $1.30, including an approximate $0.03 headwind from LIFO. While we're not providing quarterly guidance beyond Q1, I want to offer the following perspective.

We currently expect sales growth to be strongest in the first half then moderating in the second half, reflecting our macro assumptions and a more difficult year-over-year comparisons. Because we will lap the benefit we received last year from insurance proceeds in 2Q, we expect operating income to be flat in 2Q relative to last year. We expect operating income growth to begin to outpace sales growth to a greater degree in the second half of the year versus the first half. In closing, I want to echo Doug's Sentiment on our business. Over the last year, our team responded to some of the external challenges with the speed and nimbleness rarely seen in a company of our size and we exited the year in a much, much better place. As I reflect on where we are today, I'm more excited about our future than at any point in my time here.

The opportunity in front of us is incredible. Our customer member value proposition has never been stronger. Perhaps that's more obvious during times like this when the consumer is pressured. We have become an omni-channel retailer. Who else has the stores and clubs so close to so many customers and members, combined with first- and third-party e-commerce and the combination of grocery and general merchandise and in multiple attractive countries. We're in the right markets with a breadth of assortment and ways of shopping like no one else with impactful and emerging digital and technological capabilities. Our plan leverages our strengths to serve our customers and members in more ways. We meet them where they are, to continue to help them save money and time, to help them live better.

But what you're going to see in the years to come is that we will keep changing, and the changes will improve the composition of our P&L. We will have related diversified higher-margin earning streams that are scaling rapidly. You will begin to see the significant benefits from the investments that we're making in things like our supply chain automation and our expanded e-commerce capabilities. We're at an inflection point to begin to accelerate margin expansion, reinforcing that the algorithm is in place. The macro pressures this year may obscure some of that progress, but won't take away from the long-term promise of many of these initiatives. We look forward to sharing more at our Investor Day in April. Thank you. Let me turn it over to the operator for questions.

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