ROGERS, Ark., Oct. 15, 2013 – In opening remarks at the company’s 20th Annual Meeting for the Investment Community, Wal-Mart Stores, Inc., President and CEO Mike Duke today said that the company is focused on near-term execution to grow comp sales in Walmart U.S., improve returns in Walmart International and leverage expenses for the full year. At the same time, he said the company is making substantial or, in some cases, even “step-change” progress in key areas, including leverage initiatives, capital discipline, e-commerce, compliance, talent recruitment and corporate responsibility.
“We have delivered consistent growth and returns to shareholders for many years, and we will continue to do so,” said Duke. “No matter what environment we’re in -- today, a year from now, or five years from now -- we are driven to win. And we’re never satisfied at Walmart until we do.”
Focus on Near-Term Execution
Acknowledging the challenging retail environment, Duke said: “We’re in a tough and unpredictable global economy. The competition is also tough. And the holidays are right around the corner -- raising the stakes even further on serving customers and delivering on performance. All of this is to say that near-term execution is critical for us.”
Duke started with the priority of growing comp sales at Walmart U.S. He said, “When you go to our stores, you’re going to see fantastic new merchandise, aggressive investments in price through lots of rollbacks and better in-stock levels. We’re focusing on execution to deliver results.”
Duke also discussed returns in Walmart International, saying the company could improve “even in places where we’re already doing well.” Duke said that the division recently assessed its portfolio and made important strategic decisions on current operations. “These actions, combined with capital discipline and e-commerce investments, will deliver a solid framework for future growth and improved returns,” added Duke. “Walmart International is a great business that we are only making stronger.”
Duke then turned to a company-wide goal he set at the annual investors’ meeting two years ago: reducing operating expenses as a percentage of sales by at least 100 basis points over five years. “We made progress on that goal last year, and our goal is to deliver leverage again for this fiscal year,” said Duke.
Substantial Progress in Key Long-Term Areas
Highlighting the long-term areas where the company is making progress, Duke started by saying that investments in leverage initiatives are paying off around the world. For example, the U.S. logistics team is reducing shipping costs and increasing transportation efficiency, a single process initiative is generating significant savings in labor productivity in China, and the company has migrated all but one market in Latin America to its Costa Rican Shared Services Center. Duke added, “We’re driving costs out of our system so we can invest those savings into lower prices for Walmart customers.”
Duke said the company is “much more streamlined in how we make real estate decisions and invest capital.” He highlighted the stronger performance of new stores and progress in bringing down the cost to build, expand and remodel stores.
Duke said he “loved the progress that the company has made in e-commerce over the past year. The biggest opportunity we have is winning the intersection between physical and digital retail around the world. We’ve never been more connected across the company on e-commerce, and our results demonstrate this.” In the first half of the year, Walmart’s e-commerce sales grew 30 percent globally, including a strong performance at Yihaodian in China.
As the company has discussed previously, Walmart has made major investments in compliance over the past year. Its focus has been on better processes and procedures, increased training for associates and strengthening organizational leadership. “This is the right thing to do,” Duke said. “And let me be clear that our progress with compliance makes us a stronger business for the long-term. Compliance is an essential part of our growth strategy.”
Turning to Walmart’s 2.2 million associates worldwide, Duke highlighted that global associate engagement scores are currently at their highest mark ever, the company has hired more than 16,000 veterans in the U.S. in less than six months, and some of the best talent anywhere is excited about joining Walmart. “I feel better than ever about our talented associates and the career opportunities we provide at Walmart,” said Duke. “The quality of the leaders we’re recruiting is just incredible.”
Duke also said that he was very pleased with the work the company has done to make a difference on big issues around the world. “We’ve only accelerated in the past year -- with our commitments on renewable energy, to reduce certain chemicals in products and to help revitalize manufacturing in the U.S,” said Duke. “We set the pace for how companies take on big issues facing society, and we’ll keep leading because it’s good for our business.”
Winning in Any Retail Environment
Duke closed his opening remarks by sharing his overall view on Walmart’s global business and where it’s headed: “Even in a tough and unpredictable economy, there is strength in our businesses around the world. We’re making substantial progress in areas that are the foundation for long-term growth and shareholder returns. And whether I’m meeting with the leadership team in the Home Office, or walking stores and clubs in any market, I see a team that’s disciplined, focused and executing on the fundamentals. Walmart will win.”
Wal-Mart Stores, Inc. (NYSE: WMT) helps people around the world save money and live better – anytime and anywhere – in retail stores, online, and through their mobile devices. Each week, more than 245 million customers and members visit our more than 11,000 stores under 69 banners in 27 countries and e-commerce websites in 10 countries. With fiscal year 2013 sales of approximately $466 billion, Walmart employs more than 2.2 million associates worldwide. Walmart continues to be a leader in sustainability, corporate philanthropy and employment opportunity. Additional information about Walmart can be found by visiting
http://corporate.walmart.com, and on Facebook at
http://facebook.com/walmart and on Twitter at
http://twitter.com/walmartnewsroom. Online merchandise sales are available at
This release contains statements that Walmart believes are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, that are intended to enjoy the protection of the safe harbor for forward-looking statements provided by that Act. Except as noted below, these forward-looking statements are identified by use of the words or phrases “will continue,” “could improve,” “will deliver,” “is to deliver,” and “will keep” or a variation of the foregoing words or phrases in these statements, in the descriptions of certain assumptions on which expectations, forecasts or projections discussed in this release are based. The forward-looking statements discuss, among other things: management’s expectations to deliver consistent growth and returns to the Company’s shareholders for many years, management’s statement that the company can improve even in places where the company is already doing well in Walmart International, management’s expectation to deliver a solid framework for future growth and improve returns, management’s goal to deliver leverage in fiscal year 2014, and management’s expectation to continue to lead on how companies take on big issues facing society. These forward-looking statements and the information in the charts described above are subject to risks, uncertainties and other factors, domestically and internationally, including general economic conditions, including the effects of the current economic situation, competitive pressures, geopolitical conditions and events, inflation, deflation, consumer confidence, credit availability, spending patterns and debt levels, currency exchange fluctuations, unemployment and partial employment rates, personal income and other tax rates, trade restrictions, availability of attractive investment opportunities in non-United States markets, availability of appropriate locations for new or relocated units, local real estate and other laws, ordinances, legal restrictions and initiatives that may prevent the company from building or relocating, or that impose limitations on the company’s ability to build or relocate, stores in certain locations, availability of persons with the necessary skills and abilities necessary to meet the company’s needs for managing and staffing its new stores and conducting its operations, including in the e-commerce area, availability of necessary utilities, weather conditions, availability of skilled labor, labor, material and other construction costs, insurance costs, operating expenses, fluctuations in market rates of interest and other capital market conditions, and other factors and risks. The company discusses certain of these matters more fully in its Annual Report on Form 10-K for its fiscal year ended January 31, 2013, and this release should be read in conjunction with that Annual Report on Form 10-K and together with all of the company’s other filings, including its Quarterly Reports on Form 10-Q and Current Reports on Form 8- K, made with the SEC through the date of this release. You are urged to consider all of these risks, uncertainties and other factors carefully in evaluating the forward-looking statements contained in this release. As a result of these matters, including changes in facts, assumptions not being realized or other circumstances, the actual implementation of the company’s operating and other plans by one or more of its operating segments, its actual capital expenditures, unit growth, and square footage growth in one or more of its operating segments, the formats of the units built, the conversion of discount stores to supercenters by the Walmart U.S. segment, the focus of the company’s expansion and sales and operating income growth may differ materially from the expected results and the plans described in these forward-looking statements. The forward-looking statements included in this release are made only as of the date of this release, and the company undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances.