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10/14/2014 10/14/2014
10/14/2014 10/14/2014
Greg Foran President and CEO
Walmart U.S.
10/14/2014 10/14/2014
Walmart U.S. leadership team
Merchandising Duncan Mac Naughton
People Kristin Oliver
Logistics Chris Sultemeier
Development Judith McKenna
Jeff Davis Finance Marketing
Stephen Quinn Real Estate Pam Kohn
Operations Gisel Ruiz
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E-commerce Michael Bender
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Today’s agenda
First impressions
Ready for the holidays
Evolving Walmart as the customer evolves
4
10/14/2014 10/14/2014
Today’s agenda
First impressions
Ready for the holidays
Evolving Walmart as the customer evolves
5
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Walmart U.S. strategic plan timeline
Thorough diagnostic review (~100 days)
Strategic initiatives defined
Aug Sep Oct Nov Dec Jan
Today
Holiday meeting
Store visits Associate feedback
Leadership discussions
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Strong initiatives under way
Productivity loop Buy for
less
Sell for less
Grow sales
Operate for less
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10/14/2014 10/14/2014
Strong initiatives under way
Productivity loop Buy for
less
Sell for less
Grow sales
Operate for less
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Multi-format portfolio
Supercenter
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Strong initiatives under way
Productivity loop Buy for
less
Sell for less
Grow sales
Operate for less
9
Multi-format portfolio Broad and local assortment
Supercenter
10/14/2014 10/14/2014
Strong initiatives under way
Productivity loop Buy for
less
Sell for less
Grow sales
Operate for less
10
Multi-format portfolio Broad and local assortment
Creating opportunity
Supercenter
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Strong initiatives under way
Productivity loop Buy for
less
Sell for less
Grow sales
Operate for less
11
Multi-format portfolio Broad and local assortment
Innovative programs
Creating opportunity
Supercenter
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Strong initiatives under way
Digital/physical integration
Broad and local assortment Productivity loop
Innovative programs
Multi-format portfolio
Buy for less
Sell for less
Grow sales
Operate for less
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Creating opportunity
Supercenter
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Challenging recent financial performance
Sales Net sales up 2.3%, or $3.2B Flat comp
FY15 1H financials
Focused on improving store standards and service levels Significant headwinds from health care and utilities
3.3% decline
5.0% increase
Mix and price investment driving rate decline Gross profit
Operating expenses
Operating income
Inventory
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Primary focus: improving the core
o Markdowns and inventory damages
o Inventory levels
o Outlier stores
Actions are expected to benefit financials …
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Drive comp sales Focus on quality
o Merchandise returns
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Broad opportunities to improve
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Improving the core is important to top and bottom line growth
Service In-stock Price
Fresh Inventory Digital / physical
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Today’s agenda
First impressions
Ready for the holidays
Evolving Walmart as the customer evolves
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Omni
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Duncan Mac Naughton Executive Vice President, Chief Merchandising Officer
Walmart U.S.
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Building customer trust through Savings Catcher Highlights
• National launch August 2014
• ~5M users signed up to-date
• ~3% of receipts1
• Attracting new customers to dotcom and to our mobile app
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1 For the week ending 10/03/2014 Note Savings catcher applies to most grocery items and select GM items
“This app … will prevent you from running from store to store for the lowest price.”
- Walmart customer
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Savings Catcher
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Reinvigorating our focus on fresh
Highlights
• Commitment to consistent quality
• Focus on operational excellence
• Associate accountability
• More local assortment
Providing more days of freshness to our customers
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Michigan Apples
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Re-envisioned the entertainment department A holiday destination
Brand focus New categories Space re-allocation
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Inspiring holiday meals
Digital / physical integration “Taste of Entertaining” Experience tastes & tips from our
holiday entertainment guide Follow the latest social media baking trends while in-store
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Exciting seasonal merchandise Halloween Gifts
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$28.88
$249
Seasonal
$6.98 $16.97
$10
$119
$998
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Holiday Hub
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Continuing programs important to our customer
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Chosen by Kids
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Gisel Ruiz
Executive Vice President, Chief Operating Officer Walmart U.S.
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Improving our business by listening to customers “The products I’m looking for, on the
shelves, every time I’m in the store.”
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In stock
“Help when and where I need it. I don’t want to have to search for it.”
“I want a painless checkout. Fast
and Easy.”
Engaged associates Fast checkout
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Repurposed 20M hours to stock products
Highlights
• Improved picking logic
• Removed unnecessary item counts
• Simplified getting merchandise on the shelf
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Improving service through engaged associates
2014 marked the highest engagement scores in company history
Adding 60K new associates this holiday season Introducing dress code and training to create a new associate brand
Promoting associate ownership through recognition and new innovative tools
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Investing to open up more registers than ever
Program Highlights
• Direct response to customers’ #1 request
• More registers open than ever before during the peak holiday shopping season
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Real opportunities. Everyday possibilities.
Opportunity: Employment • Hired 62K veterans since May 2013 • 15K – 50K job openings on any given day
Opportunity: Choice • Offered more than 39M hours through the “Access to
Open Shifts” program this year
• 80K associates converted to full time
Opportunity: Advancement • 170K associates promoted annually
• 75% of store management teams promoted from within
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Update on challenges mentioned last year
Highlights
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• Approximately half of the 500 discount stores have real estate actions that are planned or being evaluated
• Bottom 10% stores improved their sales comp ~4% from Q2 FY14 to Q2 FY15
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Today’s agenda
First impressions
Ready for the holidays
Evolving Walmart as the customer evolves
36
10/14/2014 10/14/2014
Judith McKenna Executive Vice President, Chief Development Officer
Walmart U.S.
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Evolving with the customer
They value:
− Convenience − Low prices − Broad assortment − Services
Our customers are digitally connected
Evolving customer Evolving Walmart
Formats
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New concepts
Services
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Refining supercenters •Large format offering food & general merchandise
• Important format for the stock-up trip
•Moderating supercenter growth in short-term as we evaluate evolving customer needs
Redefining space
Focus on digital and services
Providing a quality shopping experience
1 Includes new and conversions of discount stores
Supercenter
Unit growth1
130
FY14 FY15 FY16
~120 60 - 70
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Continuing Neighborhood Market expansion •~40K square feet offering fresh, fuel & pharmacy
•Continued strong sales comps
• Focused on quality of sites
•Optimizing the format
Customer offer
Operating model
Operational standards
Store of the community 1 Does not include Walmart Express stores
Neighborhood Markets
Unit growth1
105
FY14 FY15 FY16
~170 180 - 200
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Walmart Express
Learning from small format grocery test •~12K square feet offering fresh, fuel & pharmacy
•Rebranding to Neighborhood Market
• Test units in place by Q1 FY16
Unit growth
7
FY14 FY15 FY16
~70
~20
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West East
Northern Plains
Great Lakes Northeast
Southeast
Gulf Shores Texoma
Pacific West Pacific-AK, CA, HI Central Plains
WA
OR ID
NV UT CO
NM AZ
CA
TX
OK AR
MO
IL
WI
KS
NE
FL
GA AL MS
LA
SC NC
VA
TN KY
IN OH
MI
IA
MN ND
SD WY
MT
PA
NY
ME
WV
PR
AK
HI
We’ve aligned our field structure with our formats
Large format field alignment Small format field alignment
West East
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Continuing to test and learn
Walmart Pickup - Grocery
Grocery Home Delivery Tethering
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Walmart Care Clinics
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Driving traffic and sales to stores
Providing service solutions for our customers
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Strong foundation of core strengths
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Strong foundation of core strengths Unique competitive strengths Delivering value for customers,
shareholders, and associates
History of innovation
Rich & cohesive culture
World’s largest logistics network
Collaborative supplier relationships
Geographic scale
FY14 net sales of $279B
FY14 operating income of $22B
~600 million eComm visitors / quarter
~1.2 million associates
~4,300 stores1
~672 million square feet of retail1
1 As of September 30, 2014
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Key takeaways
Conducting a thorough diagnostic review of the business
Recognize broad opportunities to improve across the business
Focused on building trust and driving sales every day, especially during the holidays
Adapting to evolving customer needs and a shifting retail environment
Well-positioned for future growth both online and in stores
10/14/2014 10/14/2014
Q A
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