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C. Douglas McMillon, President and CEO of Walmart Stores, Inc., is thrilled with the path his company is charting.
“Our underlying business is solid, and I’m confident in the company’s long-term strategies,” McMillon said during the company’s May 15 fiscal first-quarter 2015 earnings call. “We’re making progress on building a more customer-centric organization with a foundation of everyday low prices. We’re investing in technology and our multi-format portfolio to bring Walmart’s value proposition to many more customers around the world. We have a tremendous opportunity to win with the integration of digital and physical retail, as customers have the resources from us to shop on their terms.”
Walmart’s first-quarter consolidated net sales increased slightly to more than $850 million. Not unlike other retailers in the United States, the unseasonably cold and disruptive winter weather negatively impacted Walmart’s U.S. sales and drove operating expenses higher than expected for the company, McMillon explained.
McMillon noted the performance of the company’s Neighborhood Markets, which delivered about a 5% comp. Walmart has about 400 Neighborhood Markets, compared with more than 3,300 Supercenters. The Neighborhood Markets are each about 20% of the size of a Supercenter and typically sell fresh produce and groceries in urban areas.
“This strong and consistent performance is exciting, as we accelerate their rollout this year to complement our core supercenter fleet,” McMillon said. “Of course, we always have room for improvement. We continue to focus on our execution, both in-store and online, to provide customers with the merchandise and the shopping experience they desire.”
A bright spot this quarter was the performance of Walmart International. Net sales increased 3.4%.
“I’m optimistic because of the improved sales trends and the progress we continue to make on operational efficiencies,” McMillon added. “I was really pleased with our International segment’s more than 5% growth in constant currency operating income this quarter. As we focus on customer relevance, I’m excited about the progress that we’re making on our ecommerce initiatives. We will create transformative growth through these capabilities. Our investments are focused on improving customer experience and fulfillment capacity to provide the options that customers expect.”
McMillon is very excited about the company’s ecommerce initiatives.
“There are a lot of good things happening in ecommerce across the globe,” he said. “In the first quarter, we grew sales approximately 27%. We’re seeing double-digit sales growth from nearly all of our ecommerce and mobile commerce businesses around the world. Brazil ecommerce and Yihaodian in China continue to experience strong demand.”
McMillon recently returned from a trip to China.
“We’re also making great progress on our global technology platform, Pangaea, and we’re confident that customers will appreciate the streamlined functionality it will provide when we begin its rollout later this year,” he explained. “The lines between digital and physical retail have blurred and this is all ultimately about meeting and then exceeding customer expectations.”
Capital efficiency continues to be a priority for Walmart as it continues to invest in its store fleet and global supply chain.
“Also, as you’ve seen with our 12 ecommerce acquisitions over the last 3 years, we intend to be aggressive in adding ecommerce and mobile commerce capabilities, such as the purchase of Adchemy earlier this month,” McMillon said. “As we view our business through the eyes of our customers, we’re working to deliver a relevant, personalized, and seamless customer experience across all channels to further grow sales.”
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