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How Are Growth Initiatives at Walmart Shaping Up?

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Nov. 20 2020, Updated 1:04 p.m. ET

Key investor updates

On March 15, 2016, Walmart’s (WMT) executive vice president and chief financial officer Brett Biggs provided an investor update at the Bank of America Merrill Lynch Consumer & Retail Tech Broker Conference. At the conference, Biggs discussed the company’s performance in the last year along with its future growth drivers.

Biggs said, “I am excited about where we are going and again being able to do that from a position of financial strength, that’s really, really important. I think a differentiator for us.”

Discussing the positives, Biggs also talked about the fundamental drivers powering the business, including the following:

  • higher traffic trends and higher membership sign-ups at Sam’s Club
  • investments in employees and e-commerce
  • merchandising and pricing decisions
  • the changing face of US consumer and Walmart shopper habits at Walmart’s domestic and international businesses

We’ll discuss these drivers and more in greater detail over the course of the series.

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Despite the positive trends in some of Walmart’s businesses, the recent performance of the world’s largest retailer has been somewhat disappointing. Walmart’s e-commerce sales growth rate has slowed in the last few quarters, and it was slower compared to other big-box retailers such as Target (TGT), Costco (COST), and Home Depot (HD) in the last quarter.

Walmart reported headwinds in major international markets, which weighed down online sales. In fact, Walmart’s overall international sales took a record $17.1 billion hit last year due to foreign exchange headwinds resulting from the strong US dollar. While most other domestic rivals operate exclusively in the United States, Walmart’s international sales performance has been a considerable drag on the retailer’s earnings compared to its peers.

Walmart makes up 0.60% of the portfolio holdings of the SPDR S&P 500 Index (SPY) and 1.1% of the holdings of the First Trust Consumer Discretionary AlphaDEX ETF (FXD).

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