Roughly 15,000 shareholders and Walmart employees crowded into Bud Walton Arena at the University of Arkansas in the rain early on Friday (June 7), marking the 49th consecutive year for the retail giant’s annual meeting. Walmart said another 34,000 people streamed the meeting online.
The annual meeting has become a celebration for employees in recent years as the business meeting was moved to a separate date earlier in the week. As usual, the energy was high for three-hour event where executives shared technology developments unveiled in the past year. Greg Penner, board chairman for Walmart Inc., said Walmart is where it is today by taking bold risks to serve customers better. This, he said, is linked directly to co-founder Sam Walton. Daughter Alice Walton said, “Dad always encouraged experimentation.” Those risks won’t always pay off in success, but Jim Walton – son of founders Helen and Sam Walton – said “dad always learned something by taking risks.”
“Our success will depend on the risks we take and how well we execute changes,” Penner added.
Penner said the company will continue to balance the risk with strong retail performance to deliver results for shareholders. CFO Brett Biggs said the company stands in a position of strength with $514 billion in revenue and cash flow of $28 billion last year. Over three years, he said the company has added $32 billion in revenue which is equal to a Fortune 100 company the size of Coca Cola.
He said the 3.6% comp sales for Walmart U.S. last year were the best in 10 years and online sales grew 40%, doubling in the past two years. Internationally, Walmart had positive comps in 8 out of 10 markets.
Walmart CEO Doug McMillon spoke at length about the pace of change underway at Walmart and the opportunities that creates. He joked that early on in his career he learned it was not kosher to say the word “problem.” Instead, the correct word was “opportunity.”
“Sam Walton was a problem solver. Sam thought people who lived in smaller towns deserved low prices on a broad assortment of quality merchandise just like the people who lived in larger towns. He saw the potential of solving the intersection of those ideas,” McMillon said.
For instance, the concept of the first Supercenter was a hypermart Sam Walton had seen during his international travels. The concept first failed in the U.S. but was tweaked into the successful Supercenter. McMillon said it was not uncommon for Walton to try an idea on Monday, fail on Wednesday and reiterate with something better on Thursday. He said that rapid pace of change continues and it will only be faster for those who eventually succeed him.
McMillon highlighted solutions the company provides for its massive workforce of 2.3 million around the world. He promoted one of them, Shabnam Ighani of Dulles, Va., who joined Walmart in 2004 as an immigrant from Iran who spoke limited English. He said her support manager helped her improve her language skills and she went from an overnight stocker to managing a department. She became an assistant store manager and now works in a leadership role within the Walmart Academies. He said she recently applied for a store manager’s job and he was glad to promote her to that position in Fairfax, Va.
“Congratulations Shabnam. Walmart creates opportunities. We don’t shy away from problems. We embrace them. We grow and change. We adapt,” McMillon said.
McMillon’s prepared comments from the meeting can be found at this link.
There were several musical entertainers who performed during the event. Jennifer Garner hosted and also announced a new partnership with Walmart called #SparkKindness that will help to funnel grants to projects that make a difference with kindness. Neon Trees, Lady Antebellum, Bebe Rexha, Marin Morris and One Republic performed.
Actress Sofia Vergara took the stage with Walmart U.S. eCommerce CEO Marc Lore to tout her new apparel line. He said the Sofia jeans sold online were so popular the total units if stacked up would be four times taller than the Eiffel Tower. Vergara told Lore his dull black tee-shirt wardrobe was stale so she presented him with a box of colorful tee-shirts to spice up his look.
ANALYSTS MEET, TALK TARIFFS
Wall Street analysts sat down with McMillon and his executive team following the shareholder celebration. Tariffs were a big topic as Walmart is a global retailer who imports goods from around the world such as fresh fruits from Mexico and general merchandise from China.
Biggs told analysts the company’s merchants already do a good job sourcing product from around the world and getting the pricing right for customers. He said Walmart has been out in front of the tariffs proactively looking for workarounds. McMillon reminded the group that two-thirds of what Walmart sells is made in the U.S. and the other one-third is sourced from multiple countries. He said the last thing the company will do is raise prices for customers, but only time will tell should the tariffs increase or drag on.
McMillon was also asked what role Walmart plays in helping shape policy on topics like trade. He said Walmart does use its position and has a seat at the table to share insights whenever possible.
“I do hope we find a way for China and the U.S. to work together because trade is good for the world. We have 400 stores in China and have been there since 1996. I can’t say what this looks like on the other side but we are pulling all the levers we’ve got,” he added.
When asked what advice he had for high school or college students applying for the first job at Walmart. McMillon told Talk Business & Politics several people came up to him on the floor saying they wanted his job someday.
“I told them, ‘Great come get it,’ because somebody else will have to do it someday,” McMillon shared.
He, like several on the executive team, have worked their way up through the company over decades. McMillon outlined three steps to success for students who will be signing on with the retail giant this summer.
Step 1. Do the task at hand first, don’t get ahead of yourself. Do the job you have been asked to do really well, deliver results with integrity and in the right way.
Step 2. Help other people. Helping other people even if they are your peers will develop your own leadership skills and you can become a natural leader.
Step 3. Volunteer for something extra. Take on a hard project and be interested in something that is not getting solved that might even be out of your area.
McMillon said what happens if you do those three things is the people making decisions to promote folks within the company will see you doing it already. You will become the lowest risk promotion.
Lastly, McMillon said he doesn’t sweat the day-to-day stuff at Walmart, adding there are people effectively handling that. Instead, he spends much of his time planning for the next five years and trying to steer the retail giant into the future with help from his management team.
Wall Street liked what it heard from executives as Walmart shares (NYSE: WMT) traded higher on Friday at $106.07, up 96 cents and close to the 52-week high of $106.21. One year ago, the share price was $82.99.