Suppliers ship the balance of the Walmart International segments purchases directly to our stores in the various countries in which we operate. Our Walmart International segment is comprised of our wholly-owned subsidiaries operating in Argentina, Brazil, Canada, China, Japan, and the United Kingdom; our majority-owned subsidiaries operating in Chile, Mexico, 12 countries in Africa and 5 countries in Central America; our joint ventures in China and India and our other controlled subsidiaries in China. Approximately 500,000 full-time and part-time associates at Walmart U. Historically, its highest sales volume and segment operating income occur in the fiscal quarter ending January 31, which includes the holiday season, and the lowest sales volume and segment operating income occur during the fiscal quarter ending April 30. Linda Wolf and Pam Craig are retiring from the Board and will not stand for re-election. The company has been hiring talent to acquire the internal resources to challenge industry leaders such as Amazon.
Our future operating results in these countries or in other countries or regions throughout the world could be negatively affected by a variety of factors, most of which are beyond our control. In March 2011, the Office of the District Attorney for Riverside County, California, notified the Company that it had initiated an investigation of whether third party contractors hired by the Company had violated California laws regarding the disposal of construction materials at a local landfill. From March 2007 to January 2010, she served as Divisional Senior Vice President of Walmart U. The various risks inherent in doing business in the United States generally also exist when doing business outside of the United States, and may be exaggerated by the difficulty of doing business in numerous sovereign jurisdictions due to differences in culture, laws and regulations. These proxy materials offer shareholders the opportunity to provide feedback on Walmart's corporate governance practices by casting their proxy vote in a timely manner. The Company is cooperating with the District Attorneys Office. These conditions may adversely affect our net sales, gross margins, cost of sales, inventory turnover and markdowns or otherwise adversely affect our operations and consolidated operating results.
We must anticipate and meet our customers' changing expectations while adjusting for new developments and technology investments by our competitors through focusing on the building and delivery of a seamless shopping experience across all channels by each operating segment. These conditions may adversely affect our gross margins, cost of sales, inventory turnover and markdowns or otherwise adversely affect our operations and operating results in our Walmart International segment. Political and economic instability in the countries in which foreign suppliers and their manufacturers are located, the financial instability of suppliers, suppliers' failure to meet certain of our supplier standards including our responsible sourcing standards , labor problems experienced by our suppliers and their manufacturers, the availability of raw materials to suppliers, merchandise safety and quality issues, disruption in the transportation of merchandise from the suppliers and manufacturers to our stores, clubs, and other facilities, including as a result of labor slowdowns at any port at which a material amount of merchandise we purchase enters into the U. In particular, we are currently a defendant in a number of cases containing class-action allegations in which the plaintiffs have brought claims under federal and state wage and hour laws, as well as a number of cases containing class-action allegations in which the plaintiffs have brought claims under federal and state consumer laws. An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures was performed as of the end of the period covered by this report. Although we have independent, redundant and physically separate primary and secondary computer systems, given the number of individual transactions we have each year, it is critical that we maintain uninterrupted operation of our business-critical computer systems.
The Sams Club segment includes the warehouse membership clubs in the U. Such information is included in Exhibit 13 to this Annual Report on Form 10-K. As defined by the U. Although the retail industry as a whole is highly fragmented, certain segments of the retail industry may undergo consolidation from time to time, which could result in increased competition and significantly alter the dynamics of the retail marketplace. As do most retailers, we receive and store in our digital information systems certain personal information about our customers and members, and we receive and store personal information concerning our associates and vendors. In October 2015, Walmart Brazil filed its defense with the agency against the imposition of this penalty.
Stock Incentive Plan, Notice of Non Qualified Stock Option Grant is incorporated by reference to Exhibit 10 i to the Annual Report on Form 10-K of the Company for the fiscal year ended January 31, 2011, filed on March 30, 2011. Such information is included in an exhibit to this Annual Report on Form 10-K. Morgan Trust Company, National Association, as Trustee, is incorporated herein by reference to Exhibit 4. As a result of information obtained during that review and from other sources, the Company has begun an internal investigation into whether certain matters, including permitting, licensing and inspections, were in compliance with the U. Consequently, fluctuations in currency exchange rates may adversely affect our results of operations. Higher interest rates, lower or higher prices of petroleum products, including crude oil, natural gas, gasoline, and diesel fuel, higher costs for electricity and other energy, higher transportation costs, inflation, higher commodity prices, higher costs of labor, insurance and healthcare, currency exchange rate fluctuations, higher tax rates and other changes in tax laws, changes in healthcare laws, the imposition of measures that create barriers to or increase the costs associated with international trade, changes in other laws and regulations and other economic factors in the U.
The future expansion of our operations in countries outside the U. In addition, if our costs of labor or related costs increase even more significantly for other reasons or if new or revised labor laws, rules or regulations or healthcare laws are adopted or implemented that further increase our labor costs, our financial performance could be materially adversely affected. We undertake no obligation to update any of the forward-looking statements to reflect subsequent events or circumstances except to the extent required by applicable law. If we fail to maintain or grow our overall market position through the integration of our physical retail presence and digital retail, our net sales and financial performance could be adversely affected. Since fiscal 1992, our international presence has continued to expand.
All store leases provide for annual rentals, some of which escalate during the original lease or provide for additional rent based on sales volume. We discuss this case and other litigation to which we are a party in greater detail below under the caption Item 3. Through fiscal 2011, the Company maintained separate profit sharing and 401 k plans for associates in the United States and Puerto Rico, under which associates generally became participants following one year of employment. Sam's Club also competes with other retailers and warehouse clubs for desirable new club sites. Increasingly, customers are using computers, tablets, and smart phones to shop online and through mobile commerce applications with us and with our competitors and to do comparison shopping. In our operations outside the U.
Our ability to continue to conduct and expand our operations depends on our ability to attract and retain a large and growing number of qualified associates globally. Our forward-looking statements also include statements of our strategies, plans and objectives for our operations, including areas of future focus in our operations, and the assumptions underlying any of the forward-looking statements we make. The report is available digitally and can be viewed. Walmart Brazil is cooperating with the agency as well as the District Attorney's Office for the State of Rio Grande do Sul and has filed a mitigation plan to address the situation. Also included in the announcement were comprehensive changes to our hiring, training, compensation and scheduling programs, as well as to our store management structure.