Walmart FY 3Q16 Earnings Call Notes

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Wal-Mart Stores’ (WMT) CEO Doug McMillon on Q3 2016 Results

Investments will deliver sustainable growth

“We’ve never been a company that manages only for the short term and that’s certainly true during this period of change. Although investments in our people and technology impact near-term earnings, they will help us deliver sustainable growth and returns to shareholders over time. We’re confident these are the right steps because we know where and how we’re going to win. We will be the first to deliver a seamless shopping experience at scale. No matter how you choose to shop with us, through your mobile device, online, in a store, or a combination, it will be fast and easy”

Online retailers are testing physical store experiences

“Online retailers are testing physical store experiences because they recognize the same gap network of stores supported by a supply chain and systems like ours with an emerging set of digital capabilities to win with customers.’

Built new 1m sqft distribution center

“We also made strides in the U.S. on adding critical capabilities to our supply chain. In the third quarter, we opened a new e-commerce fulfillment center in Atlanta with more than 1 million ft² of space. This is our fifth next-generation fulfillment center.”

Sam Clubs in China performing well

“A few weeks ago I was back in Beijing and Shanghai walking stores, clubs and visiting our e-commerce offices. We now have a total of 12 Sam’s Clubs open and they’re performing very well. ”

We will deliver a seamless shopping experience at scale

“Wal-Mart U.S. will execute our part of the plan to be the first to deliver a seamless shopping experience of scale. We will drive growth and deliver shareholder returns by winning with stores, delivering value, being great merchants, and providing our customers with the convenient shopping experience that is fast and easy.”

Online grocery pickup expansion

“In e-commerce, we made strides on deepening the digital relationship with our customer. This quarter we accelerated our online grocery pickup offering to 85 additional locations. We now have almost 140 locations across 25 markets that offer the customer the ability to order their groceries online and conveniently pick up at a time of their choosing.”

Shift to installment wireless plans contributed to disappointing sales results

“we still have considerable headwinds in Entertainment. A slow adoption of new technology in televisions and the shift from post-paid to installment wireless plans contributed to disappointing sales results.”

holidays will be competitive and food inflation will remain low

“We know the holidays will be competitive. Additionally, we expect food inflation to remain low relative to last year, and will lap last year’s significant drop in the fuel prices, which will make the comparison for the fourth quarter more difficult.’

Exchange rate impact will be higher than initially expected

“assuming currency exchange rates remain at current levels for the remainder of the year, we now expect the full-year impact to earnings-per-share to be approximately $0.16 up $0.01 from last quarter’s revised guidance of $0.15.”