You are here
Wal-Mart Stores Inc. has unveiled a new plan to drive sales by bolstering its U.S. and e-commerce businesses.
The Bentonville, Ark.-based mega-retailer intends for its new three-year strategic framework to improve the in-store experience, use Walmart’s unique supply chain capabilities to lower costs, and establish meaningful digital relationships with shoppers.
"These are exciting times in retail, given the pace and magnitude of change," said Walmart President and CEO Doug McMillon. "We have strengths and assets to build on and are making progress to position the company for the future. We're encouraged by recent customer feedback and will continue to get stronger. Our investments in our people, our stores and our digital capabilities and e-commerce business are the right ones. We will be the first to build a seamless customer experience at scale to save our customers not only money, but also time."
Higher Earnings Ahead For Walmart
Walmart noted that due to a stronger-than-anticipated impact from currency exchange rate fluctuations, it currently expects net sales growth for the current fiscal year to be relatively flat. Excluding this impact, net sales growth would be about 3 percent for 2016. Last February, the company said that it expected net sales growth of between 1 percent and 2 percent.
"Our sales growth over the next three years is estimated to range between 3 percent to 4 percent annually, which will add approximately $45 billion to $60 billion in sales," observed Walmart EVP and CFO Charles Holley, whose impending retirement at the end of 2015 was recently made public. "Within the last year, we have experienced traffic and comp sales improvements in our Walmart U.S. business, and our plan reflects that positive momentum continuing."
According to McMillon, Walmart is "actively reviewing our portfolio to ensure our assets are aligned with our strategy. But we will be thoughtful in our approach, recognizing our responsibility to drive shareholder value."
Discussing Walmart's long-term profitability, Holley noted: "Fiscal year 2017 will represent our heaviest investment period. Operating income is expected to be impacted by approximately $1.5 billion from the second phase of our previously announced investments in wages and training, as well as our commitment to further developing a seamless customer experience. As a result of these investments, we expect earnings per share to decline between 6 percent and 12 percent in fiscal year 2017; however, by fiscal year 2019, we would expect earnings per share to increase by approximately 5 percent to 10 percent compared to the prior year."