Yesterday, Walmart hosted its annual meeting for the investment community where its leadership team discussed how the retailer is shaping its future, moving with speed and innovating to win. The company also shared select guidance metrics for the next fiscal year.

  • The company reiterated its FY19 total sales growth expectations and updates FY19 GAAP and adjusted EPS to include the expected 25¢ per share Flipkart dilution.
  • FY19 GAAP EPS guidance is now $2.65 to $2.80, and FY19 adjusted EPS guidance is now $4.65 to $4.80. This compares to previous guidance of GAAP EPS of $2.90 to $3.05 and adjusted EPS of $4.90 to $5.05.
  • Walmart expects total FY20 sales growth to be 3% or greater, negatively affected by about 100 basis points due to the deconsolidation of the Brazil operations and planned reduction in tobacco sales at Sam’s Club.
  • Walmart U.S. comp sales growth is expected to be in a range of 2.5 to 3% and eCommerce net sales growth is expected to be around 35 percent for FY20.
  • FY20 operating income is expected to decline by a low single-digit percentage range but is expected to increase by a low single-digit percentage range when excluding Flipkart in both FY19 and FY20.
  • FY20 EPS is expected to decline by a low single-digit percentage range versus FY19 adjusted EPS. Excluding Flipkart, EPS is expected to increase by a low to mid-single digit percentage range versus FY19 adjusted EPS.

“We’re adapting and transforming with speed to better serve our existing customers and reach new ones,” said Walmart President and CEO, Doug McMillon. “We’re operating with discipline, balancing our short and long-term opportunities. While we’re excited about what we’ve done so far, we aren’t satisfied. As we execute today and build for tomorrow, our associates and unique omni-channel assets position us for success.”

McMillon discussed:

  • Progress over the past year at Walmart U.S., including strong traffic and comp sales, online grocery pickup and delivery, and associate empowerment and training.
  • Walmart’s focus on price leadership, broad assortment and efforts to save customers more time by making shopping easier, faster and more enjoyable.
  • Momentum in areas such as eCommerce, logistics and partnerships.
  • Distinctive assets, key investments and acquisitions, including Flipkart in India.
  • Innovations that are enabling Walmart to serve local communities and customers around the world, such as last mile delivery, reducing supplier emissions, pioneering blockchain for food safety at scale, and leveraging machine learning across the enterprise.
  • How the company is utilizing this period of transformation in retail to invest thoughtfully, plant seeds for the future and generate solid financial results.
Walmart 2018 Investment Community Meeting at the David Glass Technology Center in Bentonville Arkansas on October 14, 2018.

And in a few key quote’s Mcmillion sounded like a revolutionary leading the Bentonville masses:

“I want to challenge your thinking about Walmart.”

“There are a few things you should take away from this meeting. First, you know us as a strong execution company. We’re also an innovation company. Current and emerging technologies make it possible to serve customers better than ever before, and we’re doing that. Second, we’re moving faster and we have momentum. Third, we have unique assets that will enable us to win in an omni-channel world, and we believe that is the winning model. Fourth, we can invest thoughtfully, plant seeds for the future while delivering good financial results in the near term”

“Looking back, we had a proven model, and we naturally focused on execution. As the numbers grew, we worked on optimization and unintentionally became risk averse. After all, a small mistake multiplied by a lot of transactions or stores is a big number. But today, we’re getting to reimagine retail and our business. To do that, we take risks, try quite a few things and learn from our failures. That type of behavior is in our DNA, and we’re waking up that part of our original culture. Sam Walton himself said, we’re always driven to buck the system to innovate, to take things beyond where they’ve been. There is a cultural change underway at Walmart, and we are enjoying it”

“We see the big picture as it relates to an emerging retail business model that operates as an ecosystem. We see lots of natural adjacencies to our core business. It starts with the customer and what they want and need. We can serve them better by leveraging data and relationships to create a unique network of assets, capabilities and services that provide solutions for them in an integrated and seamless way. Buying and selling merchandise is important, and it’s a competency that takes time to develop that scale. We are thankful it’s a core competency.”

Walmart 2018 Investment Community Meeting at the David Glass Technology Center in Bentonville Arkansas on October 14, 2018.

Steve Bratspies speaking about private brand added:

“Our commitment to quality isn’t just limited to fresh though. We spend it to all of our private brands. So whether we’re talking about Great Value, Equate, Marketside, Mainstays, or our new apparel brands, we’re going to continue to innovate and invest to ensure that every product at Walmart delivers great quality.”

“Now, another terrific quality play is over here which is our Winemaker Selection. Now, this is a premium private brand wine and our goal is to increase our quality perception and build customer loyalty. It is selling great. We’ve launched the first 10 varietals in May, and we added nearly a 100 basis points to our overall wine business. So we’re going to add another 11 SKUs in next spring, it’s been a real winner for us so far.”

Financial Framework
Walmart CFO Brett Biggs will outline the company’s financial framework of strong, efficient growth, operating discipline and strategic capital allocation to drive long-term shareholder value.

Biggs commented, “I feel great about Walmart’s position in this rapidly changing retail landscape. We are leveraging our scale, assets and financial strength in ways unique to Walmart to enhance and build competitive advantages. We continue to operate with discipline, we’re strengthening our cost culture and we’re leveraging technology, data and analytics in new ways to be more productive. Our financial strength gives us the flexibility to deliver near-term results while making strategic decisions for the longer term.”

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Christopher Durham
Christopher Durham is the president of My Private Brand and the co-founder of The Vertex Awards. He is a strategist, author, consultant and retailer who built brands at Delhaize-owned Food Lion, and lead strategy and brand development for Lowe’s Home Improvement. He has consulted with retailers around the world on their private brand portfolios including: Family Dollar, Petco, Staples, Office Depot, Best Buy, Metro (Canada), TLW (Taiwan) and Hola (Taiwan). Durham has published five definitive books on private brands, including his first book, Fifty2: The My Private Brand Project. In 2017, he will debut his newest book, Vanguard: Vintage Originals, a visual tour of innovation and disruption in private brand going back to the mid-1800’s. Dynamic in his presentation while down to earth and frank in his opinions, he has presented at numerous conferences, including FUSE, The Dieline Conference, Packaging that Sells, Omnishopper and PLMA’a annual trade show in Chicago. Durham lives in Charlotte, NC with his wife, Laraine, and two daughters, Olivia and Sarah.