Wal-Mart Stores Inc., the behemoth of retail that was founded more than 50 years ago, wants to appear young and tech savvy.
At its annual shareholder meeting, a week-long revival-style event attended by 5,700 store employees, Wal-Mart showed off its use of drones in warehouses, announced a grocery-delivery test with Uber Technologies Inc. and Lyft Inc. and voted in founder Sam Walton’s 34-year-old grandson as a board member.
To host the main event, it tapped late night TV star James Corden who delivered barbs at the Walton family as well as an uncomfortably long hug of Wal-Mart’s new chief financial officer, Brett Biggs. Pop stars Nick Jonas and Katy Perry performed for the 5,700 store employees in attendance.
“We get to reimagine retail again, and that’s what we are going to do,” Wal-Mart Chief Executive Doug McMillon told the crowd gathered in Bud Walton Arena, named after Sam Walton’s brother. “There is momentum in this business. It’s real. We can feel it.”
Wal-Mart’s recent results for the first months of this year, while modest, outshined others in retail like Target Corp., department-store chains and apparel retailers which suffered from weak clothing sales. In the three months through the end of April, Wal-Mart reported an almost 1% sales gain at stores open at least a year, its seventh-straight quarter of growth.
Mr. McMillon said that the company aims to add up to $60 billion in new revenue growth over three years.
The upbeat message comes amid concerns that encroaching competition from online giant Amazon.com Inc., hard-discount stores like Aldi and fast-growing dollar chains is eroding Wal-Mart’s growth prospects.
Wal-Mart is feeling the challenges. Last year, it reported lower annual revenue for the first time since becoming a public company in 1970; and its e-commerce sales growth, while still a small slice of total sales, has slowed each of the last five quarters. At the same time, costs are rising after it raised wages for its hourly store employees, part of a series of steps the retailer is taking to improve its 4,600 U.S. stores. It is also spending heavily, including a $2 billion in e-commerce investment over two years.
Shares of the company, up 16% so far this year, are down 4% from a year ago. On Friday, its shares closed flat at $70.88.
Associated Press Pop singer Nick Jonas performed at Wal-Mart’s annual meeting on Friday.
Wal-Mart’s shareholder meeting fuses pep rally with the requisite reading of shareholder proposals. This year’s host, Mr. Corden, brought some uncomfortable comedy in line with the modern message from executives. He repeatedly poked fun at Greg Penner who became chairman last year.
“He is married to Rob Walton’s daughter, but that’s not how he got his job,” quipped Mr. Corden. Rob Walton is Sam Walton’s son.
Mr. Corden introduced Mr. Biggs by saying, “He didn’t even have to marry Rob Walton’s daughter to get promoted.” Then he gave Mr. Biggs a protracted embrace which Mr. McMillon later joked will haunt Mr. Biggs for the rest of his career.
On stage Mr. McMillon stood in front of a large digital book, flipping pages, saying the company is in “chapter four” of its own history, as he pulled a mobile phone from the last page before discussing online-shopping initiatives, self-driving cars and voice-prompted technology.
Wal-Mart executives said the retailer intends to offer its mobile-payment technology, Walmart Pay, to all U.S. stores and expand a service that allows shoppers to pick up online orders curbside to more than 50 markets by the end of June. It is also testing home grocery delivery in Denver and Phoenix later this month with Uber and Lyft.
Shareholders approved all 12 company recommended board members and voted in-line with company wishes. About 51% of Wal-Mart’s stock is controlled by the Walton family. For years, influential proxy advisory firms ISS and Glass Lewis have recommended shareholders vote in favor of an independent board chairman.
Earlier this year, Wal-Mart announced that it planned to reduce the board to 12 members from 15. Aida Alvarez, Roger Corbett, retired CEO Mike Duke and Jim Walton left the board. Shareholders elected Jim Walton’s son 34-year-old, Steuart Walton. A lawyer and pilot, he will be the first of his generation of Waltons to serve on the board.
The changes mean Wal-Mart will have a board that is younger than most of its peers. According to the company’s proxy filing, the median age of its proposed slate of new directors is 57. The median age of directors at S&P 500 companies was 63, according to a Journal analysis of proxies filed through Oct. 30. At that time, the median age of a Wal-Mart director was 66.
By: Sarah Nassauer (WSJ).
Photo: WSJ.
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