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Wal-Mart Stores, Inc. outlined its strategic framework to grow by serving customers across all channels to create a seamless shopping experience at its recent 2016 Investment Community Meeting. The company also imparted select guidance information, as well as its capital expenditure estimates for the next fiscal year.
Walmart President and CEO Doug McMillon highlighted four key areas of focus: making every day easier for busy families; operating with discipline, including a continued focus on expense management; being the most trusted retailer; and delivering results and positioning the company to win.
According to McMillon, ongoing success will arise from several factors, among them continued momentum in the U.S. business; strong growth in major international markets such as Mexico and Canada; a sharpened focus in China; and e-commerce investments.
“We are encouraged by the progress we’re seeing across our business, and we’re moving with speed to position the company to win the future of retail,” said McMillon. “Our customers want us to run great stores, provide a great e-commerce experience, and find ways to save them money and time seamlessly – so that’s what we’re doing.”
Walmart CFO Brett Biggs discussed the company’s financial plan to deliver strong, efficient growth; operate with discipline; and allocate capital strategically to drive long-term shareholder value. The company will rely more on comp sales and e-commerce growth to drive the top line and will slow the pace new-store openings, while ramping up investments in e-commerce, technology, store remodels and other customer initiatives.
“I’m pleased with the momentum in our business,” noted Biggs. “We have the financial strength to strategically invest in growth, while returning significant cash to shareholders in the form of dividends and share repurchases.”
In its most recent guidance for fiscal year 2018, Walmart expects GAAP EPS to be relatively flat to fiscal year 2017 adjusted EPS, and anticipates continued momentum in its store business. Incremental U.S. e-commerce operating investments, including the newly acquired Jet.com, are expected to accelerate e-commerce growth. For fiscal year 2019, the company expects EPS growth of around 5 percent. Walmart expects its capital expenditure plan to be about $11 billion in fiscal year 2018 as it moderates new store openings, accelerates the pace of remodels, and invests in e-commerce and digital initiatives. The company remains on course to generate about $80 billion in operating cash flow from fiscal year 2017 through fiscal year 2019.
Walmart operates 11,539 stores under 63 banners in 28 countries, and e-commerce websites in 11 countries.