Walmart's Duke: Momentum is Driving the Top and Bottom Line
By David Gill
Walmart has "momentum in our business that's producing top-line and bottom-line results," Mike Duke, the retailer's president and CEO, told financial analysts at Walmart's 19th Annual Meeting for the Investment Community last month.
"Walmart is strong and getting stronger," Duke said to the analysts. "We're delivering on the productivity loop and being even more disciplined about operating expenses and capital spending. We're making investments that are creating a better business. I believe that the combination of momentum, investment and discipline will continue to deliver growth, leverage and returns for our shareholders."
Highlighting the key points in Walmart's "momentum," Duke said Walmart's U.S. business is making progress in a number of areas that are driving same-store sales growth. Crediting Bill Simon, Walmart U.S. president and CEO, and the Walmart U.S. team, he said,"We're executing on the fundamentals of assortment and price, driving success and key merchandise categories, and we are focused on the customer."
He added that Walmart International's growth, under Doug McMillon, president and CEO, is "strong, and we are winning customers and gaining share in almost every country in which we operate. I like how we are positioned around the world and the markets that we are in present great opportunities. We are gaining share in almost every country that we operate in."
Sam's Club's growth has also been healthy, he said, and will become more potent under the leadership of President and CEO Rosalind Brewer. "We have a clear strategy to further strengthen our merchandise offering at Sam's," Duke said. "We're testing new ways to engage existing and perspective members and to increase memberships and renewals and revenue."
Duke added that Walmart continues to invest in a disciplined way to build its business and position the company for further success. He cited Walmart's global e-commerce sector, under the leadership of Neal Ashe, president and CEO. Regarding e-commerce, "I believe we are playing to win in a very real way now, driving innovation, working together across the entire business and investing in our vision," Duke said.
He cited the company's new search engine, which has already improved conversion rates on walmart.com by 10 to 15 percent. Also, the site's new global platform, which is in the process of being built, "will significantly increase the assortment of products available on our sites around the world," he said. E-commerce will also get a boost from Walmart's investment in Chinese Internet retailer Yihaodian, which is set to close in the near future.
In terms of expenses, Duke told the analysts that Walmart has leveraged expenses for 11 quarters while achieving savings, lower prices and more sales across the business. "We are driving efficiencies in new stores and remodels by reducing construction costs while keeping our square-footage growth where we want it to be," he said. "All of this is part of our recommitment to the productivity loop, and it is paying off in savings, lower prices and more sales across our business."