Doug McMillon, president and CEO of Walmart Inc., participates in the Business Roundtable discussion on “The Future of Work in the Age of Automation and Artificial Intelligence,” during the Summit. Innovation Summit for CEOs, on December 6, 2018 in Washington, DC.
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FAYETTEVILLE, Ark. – Thousands of Walmart employees gathered in a large arena on Friday, dancing like Jonas Brothers has featured the return of the annual event that acts as a corporate rally. Yet despite the festive backdrop, CEO Doug McMillon acknowledged the new challenge the company faces: inflation.
Amid cheers and celebrity actions, McMillon praised how employees around the world have persevered during the pandemic while dealing with a thin staffing line due to Covid. He noted that sales rose even as stores struggled to keep shelves stocked. And he swore that the company would avoid a repeat disappointing first quarter resultswhen inflation eats into profits.
“We’ve been working to fix that and improve our performance over the course of the past year,” he said, adding that Walmart’s workforce is “resilient and we love the challenge.” knowledge of the retail sector”.
Later that day, McMillon also emphasized to analysts that the company was looking closely at its costs and pushed suppliers to cut and absorb some of the costs. And he noted that Walmart is tapping into the expertise of operations leaders in Brazil and other countries with a history of strong inflation.
“We’ve been working really hard on costs from top to bottom, taking action to keep costs down so the second quarter looks better than the previous quarter and we’re on the upswing,” he said at a press conference. events for investors near the company. headquarters in Bentonville, Arkansas.
His comments come just weeks after Walmart shares had their worst day in 35 years. In mid-May, the company Reported quarterly profit that fell short of Wall Street expectations because higher fuel and transportation costs hurt earnings. Chief financial officer Brett Biggs also noted at the time that sky-high inflation was weighing on customers, with some buying half a gallon of milk and cold cuts to save on grocery bills.
Walmart quarterly performance – and same result via Target — helped drag shares of companies and the broader markets lower, with Walmart closing down 11.4% on the day the company reported earnings. The company’s stock is down about 13% so far this year, about the same as the S&P 500 index.
Walmart’s annual meeting is known for its party-like atmosphere and traditionally coincides with its shareholder meeting.. Employees around the world flocked to Walmart’s birthplace to attend the event, the company dressed in and waving their country’s flag, at the Bud Walton Arena on the University of Arkansas campus. Friday marks the return of the event since the pandemic.
At a Q&A with analysts, McMillon said Walmart’s team has responded “in a very detailed and drastic way” in recent weeks as it pushes to become even more cost-effective.
“Some inside the company call it ‘old-school Walmart,'” he said, referring to the company’s nearly 60-year history of obsessing over details to keep prices low.
McMillon also notes that the company is closely monitoring the spending patterns of its most value-conscious customers and ensures the prices of staples that feed their families remain within reach. And since middle- and upper-income customers also want to stretch their budgets, he said Walmart will work to lure them in with clothing and other items they may not have purchased at Walmart first. this.
That could ultimately help the company gain market share and boost profits, he said.
“If the world is under more pressure and people in general have a more sense of value, then we are the place to go,” he said.
