Associates at center of upbeat shareholders' event
Brett Biggs, executive vice president and chief financial officer, credited Walmart’s 2.2 million associates worldwide with helping fulfill founder Sam Walton’s vision for Walmart as a merchant serving the masses through “low prices for all.”
Associates’ hard work and ingenuity helped Walmart achieve some impressive financial results in fiscal 2019, when revenue surpassed $514 billion, the company generated $27.8 billion in operating cash flow and returned $13.5 billion to shareholders through dividends and share repurchases, said Biggs, who noted that Walmart has raised its dividend in each of the last 46 years. Walmart shares on the New York Stock Exchange ended Thursday at $105.11, up from $83 a share a year earlier, Biggs said. Over the past three years, Walmart’s market valuation has increased by $90 billion, he said.
In remarks delivered during the business portion of the meeting on Wednesday, Walmart president and CEO Doug McMillon said fiscal 2019 “was a strong one for Walmart.”
“Just a few years ago, our U.S. comp sales ran down for five quarters in a row, but we’ve now run up in comp sales for the past 19 consecutive quarters,” McMillon said. “Last year, excluding fuel and tobacco, Sam’s Club comps increased 5.7%, and our international markets delivered positive comps in eight of 10 markets. Our top priority is to serve customers. Sam Walton was called a merchant with a servant’s heart, and we still embody that mindset today.”
McMillon called on Congress to boost the federal minimum wage, which at $7.25 an hour is “too low,” he said. Walmart pays its workers a minimum of $11 an hour. A higher federal minimum would put more money in the pockets of Walmart shoppers.
“We’ve moved up our starting wages in the U.S. by 50% in the last four years, and we continue to adjust on a market-by-market basis to recruit and retain the talent we need to run a good business,” McMillon told shareholders. “It’s clear by our actions and those of other companies that the federal minimum wage is lagging behind. $7.25 is too low. It’s time for Congress to put a thoughtful plan in place to increase the minimum wage. Any plan should take into account phasing and cost of living differences to avoid unintended consequences.”
McMillon’s call came as U.S. Sen. Bernie Sanders, an independent from Vermont, attended that part of the meeting with workers who introduced a resolution asking for a seat on the company’s board for hourly workers. Sanders presented the resolution on behalf of Cat Davis, a Walmart worker and shareholder, and a leader of the group United for Respect, which aims to protect workers’ rights at large corporations.
Sanders was allowed three minutes to address shareholders on June 5. He said Walmart’s wages are so low that many employees are forced to rely on government safety net programs.
“Frankly, the American people are sick and tired of subsidizing the greed of some of the largest and most profitable corporations in this country,” he said.
The proposal failed to receive affirmative votes from a majority of the total shares that were represented at the meeting and entitled to vote, and, therefore did not pass.
During Friday’s meeting, Sam’s Club CEO John Furner said he’s pleased with the direction of the warehouse clubs, which have posted 13 quarters of positive comps.
Furner said Sam’s Club is introducing new technology through a concept store — Sam’s Club Now — in Dallas that opened six months ago. Members can use a Scan & Go app to bypass the checkout. The app also uses new proprietary computer vision technology that can more easily locate barcodes on bulky passages and log the data into the shopper’s app.
Furner also said Sam’s Club employees are using Ask Sam, which they can load on their own phones, to speed up their ability to help members.
Marc Lore, president and CEO of Walmart eCommerce U.S., updated shareholders on some of the company’s digital initiatives. “Look at what’s happening at Store No. 4841, in Levittown, New York. It’s home to our Intelligent Retail Lab, where we’re testing ideas that could revolutionize retail as we know it,” he said. “Just imagine using computer vision and artificial intelligence to see your inventory levels in real time, both on the sales floor and in the back room. It will allow us to speed up section work, improve on-shelf availability and have more face-time with customers.
“And then there’s Jetblack, which we announced last year. It brings conversational commerce to life. Customers absolutely love it. Today more than two-thirds of our JetBlack members engage with us weekly, spending on average $1,500 dollars per month.”
Walmart continues to bolster its e-commerce business by shortening delivery times, Lore said. “A few weeks ago we announced NextDay delivery. It allows customers to quickly receive up to two hundred thousand of our top items. The incredible thing is, it costs us less to deliver orders the next day, because items come from a single fulfillment center located near the customer, and orders arrive in one box. NextDay delivery is pretty awesome, but we can deliver groceries even faster — same day. And, earlier today we announced something new – InHome Delivery. We’re taking delivery from the customer’s front door, directly into their fridge.”
Greg Foran, president and CEO of Walmart U.S., thanked associates for their work in implementing the technology being developed to make shopping more convenient.
“You’ve heard me talk about the importance of principles, and how principles don’t change. One of the principles I’ve come to rely on more and more over the past few years is this — success,” he said.
“Success ‚ in probably all areas, including families, schools, sports teams and businesses of all sizes — depends on having some kind of a personal relationship. Personal relationships are the only way we can uphold the principles upon which our founder, Sam Walton, built our company,” Foran said. “And to be perfectly honest, I think personal relationships are the basis for how we, as Walmart, or anyone else for that matter, can uphold many of the values which bring out the best of humanity. If each of us builds those kinds of relationships reasonably well, we can help make a meaningful difference in people’s lives, and in the neighborhoods where they live and work. And by doing that honestly — by doing that well — we create a spark.”