At the company’s annual meeting today, Wal-Mart disappointed investors with a soft forecast.
Over the next three years, the retailer plans to generate $80 billion in cash. It will add $45 billion to $60 billion in growth. Earnings per share will decline by 6 percent to 12 percent in 2017 and increase by 5 percent to 10 percent above their current level in 2019. This news drove the stuck down 9 percent in midday trading.
Wal-Mart Stores chief executive officer Doug McMillon asked analysts to be patient as the company carries out its continuing transformation. Speaking at the retailer’s investment day in Bentonville, Arkansas, McMillion acknowledged that Wal-Mart is facing more competition than ever — from hard discounters who operate on even thinner margins to e-commerce giants.
In a break from tradition, only the heads of Wal-Mart U.S. and global e-commerce are making presentations today. Noticeably absent from the agenda were Sam’s Club and Wal-Mart International. McMillon said the company is more than willing to shed businesses or close stores that don’t meet requirements, adding that Wal-Mart will evaluate its portfolio. “We’ve exited businesses before,” he said. “We’re more than open to reshaping our portfolio, but we’re going to be smart about it.”
McMillon said Wal-Mart will leverage its unique assets, including its supply chain and stores “in order to win.” It’s investment in associates will improve the customer experience, which when coupled with e-commerce and digital, provides the key to the future.
has also been punishing Wal-Mart for its $1.2 billion investment in sales associates in 2016. The company said it will invest $1.5 billion in people in 2017.