McMillon: Surviving hard times, doubts make recent success ‘so sweet’

When Doug McMillon was named CEO of Walmart in February 2014, the company was being investigated by the U.S. Department of Justice (DOJ) for alleged Foreign Corrupt Practices Act violations during more than a decade of rapid international growth.

The retailer then had a stock market cap of around $194.34 billion, and faced a lackluster performance with flat overall same-store sales. However, Neighborhood Market stores were doing well with comp sales up 5.5% and the small e-commerce business was growing — but it was unprofitable.

McMillon said during a Tuesday (Dec. 9) interview with CNBC that the company began to make big decisions in his first months and years that have paid off. He said it took early decisions on wage increases, lower product prices, and investments and focus in e-commerce and technology to reorient the global retail giant. He said he had the full support of the Walmart Board of Directors and the Walton family in those early moves.

“Not everybody has that opportunity,” McMillon said. “It took the operating income percentage of the company down for a sustained period of time. It’s been a lot of fun to look back on the memories of the hard stuff that we did together. At times, Walmart was really doubted, and that’s what makes it so sweet.”

The company would change its international market focus. The company expanded in India with the acquisition of Flipkart, but pulled out of Brazil, Japan and the United Kingdom under McMillon’s tenure.

The company also settled with the DOJ in 2019 for $282 million in fines to resolve criminal charges related to corruption practices uncovered in Brazil, India and Mexico.

Walmart announced Nov. 14 that McMillon will step down Jan. 31, 2026, the end of the company’s fiscal year, with Walmart U.S. CEO John Furner stepping into the top job.

When asked by CNBC why he was retiring, not yet being 60 years old, McMillon said he didn’t quite know if he was young or old, as it can be confusing these days.

“I think when you see somebody who’s ready to run the next lap better and faster than you are, it’s time to hand the baton and get out of the way and just cheerlead. And that’s what’s happening,” McMillon said. “I had a great opportunity to do this job for a long time, and I’d like to see that happen for the next person (John Furner). John’s ready to do it. He has the wisdom and experience, and I know he might run faster, but John’s also been with the company for more than 30 years, and he’s eight years younger than I am.”

McMillon said Furner has done all the jobs in the company, from being a merchant to operations and sourcing, and he has worked in all three segments.

“His dad worked at the company,” McMillon said. “John met Sam Walton when he was a kid. He met his wife at Walmart, and he loves the company, loves our associates, and has a vision for the future and with what’s happening with AI.”

McMillon said he might begin the transformation of Walmart with AI, but he would not be able to see it through. He said Furner has a long runway at Walmart to take the company into the future. McMillon said there are no storm clouds, nothing in the future that is pushing him into retirement.

“I think what you’re going to see from the Walmart team is they’re just going to keep scaling what we’ve already started, build some new stuff on top, and then use AI to transform it all,” McMillon said.

He said the Walmart Board of Directors talk about succession at each board meeting, and he began thinking about an exit in the last year. McMillon stopped short of sharing any future plans during the CNBC interview, but said he will work in a consultant role with Furner over the next year to provide for a smooth transition.

Over the past 11 years of McMillon’s tenure, Walmart shares (NASDAQ: WMT) have increased in value by more than 355%, and now has a market cap of around $917.21 billion. Walmart is the largest company at nearly $1 trillion in market cap to move from NASDAQ to the NYSE. McMillon said the move to the NASDAQ 100 comes after Walmart invested billions into its technology capabilities that have transformed the company top to bottom.

“Walmart’s changed a lot, and we’re trying to make sure everybody knows it,” he said.