Walmart CEO Says Combination of Momentum, Discipline and Investment Driving Growth

Duke said Walmart would bring the same discipline to capital expenditures and to the investments that the company is making in areas such as e-commerce and shared services, systems and global processes.

11 Oct 2012 --- Wal-Mart Stores, Inc. President and CEO Mike Duke today said the retailer’s business momentum is building strength and delivering financial results in its operations around the world. At Walmart's 19th Annual Meeting for the Investment Community, Duke also highlighted the company’s progress with the productivity loop and leveraging expenses, adding that it has a lot of "open road ahead” even beyond current plans.  He said Walmart would bring the same discipline to capital expenditures and to the investments that the company is making in areas such as e-commerce and shared services, systems and global processes.

"Walmart is strong, and we are getting stronger,” said Duke.  “We have momentum in our business that’s producing top line and bottom line results.  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.”

In remarks that opened the meeting, Duke highlighted momentum, discipline and investment as key to the global retailer’s performance, Duke said the Walmart U.S. business is “in a very good place” and making progress on a number of fronts that are driving strong comp sales.  He added that he was impressed by both the plan and the energy he’s seeing throughout the organization “to give America the absolute best possible Christmas.”

While discussing Walmart International, Duke said, “Our growth is strong, and we are winning customers and gaining share in almost every country in which we operate.”
Sam’s Club continues its “strong performance,” according to Duke, and is “testing new ways to engage existing and prospective members and to increase membership renewals and revenue.”

The company’s chief executive also sees momentum in the “leadership Walmart is providing on issues like sustainability, the economic empowerment of women, nutrition and hunger, and agriculture.”

Saying that he was personally committed to discipline in how Walmart spends money, Duke praised the company’s 11 quarters of leveraging expenses and credited the productivity loop with “savings, lower prices and more sales across our business.”

He added, “Now you’re going to see us bring the same increased discipline to our capital expenditures that we have been bringing to operating expenses.  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.  We are smarter about matching our systems investments to the size of the box and the need of the market.”

Duke also said the company is bringing a “tremendous amount of discipline” to the investments that Walmart is making to build its business and position the company to succeed in both the short and long terms.

He highlighted Global eCommerce and the company’s stake in Chinese web retailer Yihaodian, saying of the company’s online strategy, “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 also said that investments in shared services, systems and global processes are and will continue to yield real productivity and expense savings.

Duke tied momentum, discipline and investment back to the company’s ongoing financial goals of growth, leverage and returns: “We will generate growth through comp sales from existing business, new stores and e-commerce.  Our international business will continue to be a growth engine.  And at Sam’s, we’re pushing hard to accelerate growth in membership and top line sales.”  He continued, “People keep asking me how much more we can we do in leverage.  To be sure, we’ve come a long way with leverage.  And frankly, we’re at an earlier stage with capital expenditures.  My commitment is that we have a lot of open road ahead even beyond our current plans. Our op-ex and cap-ex discipline, combined with our initiatives in areas such as shared services and global processes and sourcing, will help us to continue delivering on our leverage goals.  We will also continue to deliver returns to our shareholders through dividends and share repurchases.”

Duke closed his remarks by saying, “At Walmart, we have the strongest management team we’ve ever had and more depth and expertise across key areas.  We have a business that delivers for our customers, associates, shareholders and communities.  As far as we’ve come, I believe we still have a lot of upside.  Our strategies are creating an anytime anywhere relationship with our customers that will allow us to serve them better than any other retailer.  In this changing landscape of commerce around the world, I truly believe that we will continue to be the healthiest and best-positioned global retailer.”