Wal-Mart urges worker integrity amid bribery probe

FAYETTEVILLE, Ark., Wed May 30, 2012 – Top executives of Wal-Mart Stores Inc. did not directly mention a Mexican bribery scandal at an employee pep rally on Wednesday, but asked their international workers to focus on “integrity” as a core value.

The world’s largest retailer has been under fire from shareholders and activists after the New York Times reported in April that management at Wal-Mart de Mexico, or Walmex, allegedly orchestrated bribes of $24 million to help it grow quickly last decade and that Wal-Mart’s top brass tried to cover it up.

The matter is being investigated by a number of government agencies in Mexico and the U.S. Department of Justice and the U.S. Securities and Exchange Commission. Wal-Mart is also conducting an internal probe.

Executives talked around the allegations in Mexico, the company’s first and largest international market. They referenced integrity as one of the company’s core values and underscored the importance of complying with local laws.

“It’s doing the right thing, every single day,” Wal-Mart President and Chief Executive Officer Mike Duke told international workers gathered at the University of Arkansas’ Barnhill Arena.

Doug McMillon, president and CEO of Walmart International, said it was up to every employee – from new associates to top executives – to guard the company’s principles.

“If you see something in your business that you don’t think is right, you need to say something,” McMillon said.

Scot Rank, president and CEO, Walmart Mexico and Central America, may have come the closest to directly commenting on the allegations, without specifically mentioning bribery.

“Over the years we have faced difficult and challenging times in Mexico and Central America. These events have united us even more, they have motivated us to continue, to continue pursuing excellence, and work with respect and integrity,” Rank said at the end of the Mexico and Central America unit’s presentation.

Major pension fund to vote against Wal-Mart board

BENTONVILLE, Ark, Tue May 22, 2012 – The second largest U.S. public pension fund said on Tuesday it plans to vote all of its Wal-Mart Stores Inc shares against the board in the wake of bribery allegations in Mexico that Wal-Mart officials failed to fully investigate.

California State Teachers’ Retirement System, or CalSTRS, has already sued current and former Wal-Mart executives, saying allegations the company paid millions of dollars of bribes in Mexico and a cover-up by Wal-Mart officials raised the question of whether top executives should remain in place.

The allegations “indicate a breakdown of corporate governance and lack of oversight that should have averted this situation,” CalSTRS said in a statement.

CalSTRs added it “does not have confidence the current board has the independence and leadership needed to address these difficult issues.”

CalSTRS plans to vote its 5.3 million Wal-Mart shares against the re-election of all board members and encouraged other shareholders to do the same.

The $153.7 billion pension fund has said as an index investor, it is required to hold shares of the retailer, which is a component of the Dow Jones industrial average and many indexes.

Shares of Wal-Mart were up 0.8 percent at $63.53 in late-morning trading after rising to $63.55, their highest level in more than 10 years, earlier in the session.

Wal-Mart posts strong quarterly profit as U.S. sales jump

BENTONVILLE, Ark., Thu May 17, 2012 – Wal-Mart Stores Inc. posted a better-than-expected quarterly profit on Thursday, including a 2.6 percent rise in sales at its Walmart U.S. division’s stores open at least a year, as warm weather and an earlier Easter enticed shoppers to spend.

The world’s largest retailer, which was recently rocked by allegations of bribery in Mexico, earned $1.09 per share from continuing operations, compared with a profit of 98 cents a year earlier.

Wal-Mart had forecast earnings per share of $1.01 to $1.06. Analysts, on average, expected it to earn $1.04 per share, according to Thomson Reuters I/B/E/S.

Shares of Wal-Mart jumped 2.8 percent to $60.85 in premarket trading.

Walmart U.S. same-store sales have risen for three straight quarters following nine consecutive quarterly declines. Wal-Mart expected Walmart U.S. same-store sales to be flat to up 2 percent. Analysts, on average, expected them to rise 1.4 percent, according to Thomson Reuters.

For the current second quarter, Wal-Mart expects to earn $1.13 to $1.18 per share from continuing operations. Analysts were looking for a profit of $1.16 per share.

Walmart U.S. same-store sales should rise 1 percent to 3 percent this quarter, Walmart U.S. Chief Executive Bill Simon said on a recorded call.

Compensation for Wal-Mart CEO Mike Duke dipped last year

BENTONVILE, Ark., Mon Apr 16, 2012 – Wal-Mart Stores Inc. CEO Mike Duke earned $18.1 million last year, down from $18.7 million in the previous year, as sales growth at the world’s largest retailer fell short of its goals.

Wal-Mart also said Google Inc. executive Marissa Mayer would stand for election to the Wal-Mart board at the company’s annual shareholders meeting on June 1. If elected, Mayer would become the sixteenth member of the board.

While the huge Walmart U.S. business finally reversed its prolonged sales slump last year, overall performance and results at both Walmart U.S. and the international unit fell short of the company’s expectations.

Duke’s cash incentive payment in fiscal 2012 fell to just under $2.88 million from $3.85 million a year earlier and $4.8 million in fiscal 2010, Wal-Mart said in a regulatory filing on Monday.

Duke earned 71 percent of his target cash incentive payment for fiscal 2012, down from 97.4 percent in fiscal 2011 and 125 percent in fiscal 2010.

The board’s nomination of Mayer, 36, underscores Wal-Mart’s desire to become a better online and mobile destination for its shoppers. Mayer joined Google in 1999 as its first female engineer and has been its vice president of local and maps since 2010.

“We are on the cusp of a massive transformation in the way people shop in our increasingly connected world,” Wal-Mart Chairman Rob Walton said in a statement. “Marissa’s insights and expertise in the technology and consumer areas are valuable assets to Walmart as we move forward.”

Wal-Mart holiday profit just short of Wall Street forecasts

BENTONVILLE, Ark. – Wal-Mart Stores Inc’s. fourth-quarter profit came in just short of Wall Street’s expectations, sending its shares down 2.6 percent, as it cut prices to win over U.S. shoppers during the holiday season.

Walmart U.S., the biggest division of the world’s largest retailer, has been lowering prices, bringing back a wider variety of items and focusing on a low-price message to woo shoppers on limited budgets who started to shop at dollar stores and elsewhere in recent years. Traffic at those stores rose after six quarterly declines.

Walmart U.S. posted a 1.5 percent increase in sales at stores open at least a year. It was the second quarter in a row that Walmart U.S. same-store sales rose after nine consecutive quarterly declines.

However, operating income growth at Walmart U.S. grew at a slower rate than sales. Gross profit margin declined as the company made investments in its pricing strategy.

The rise in sales was also not as strong as analysts expected. Wal-Mart expected Walmart U.S. same-store sales would be flat to up 2 percent, compared with a 1.8 percent drop a year earlier. Analysts on average had expected a rise of 1.8 percent, according to Thomson Reuters data.

Shares of Wal-Mart, which were up 4.6 percent so far this year through Friday’s closing price of $62.48, fell $1.65, or 2.6 percent, to $61.20 in premarket trading.

Wal-Mart earned $5.19 billion, or $1.51 per share from continuing operations attributable to the company, up from $5.02 billion, or $1.41 per share, a year earlier.

Wal-Mart to take majority stake in China e-commerce firm

BENTONVILLE, Ark. — Wal-Mart Stores Inc said on Monday it is taking a controlling stake in Chinese e-commerce firm Yihaodian, as the world’s largest retailer seeks new revenue sources to fend off rising competition in the world’s fastest-growing major economy.

The move comes two weeks after Wal-Mart announced the appointment of industry veteran Greg Foran as head of its China operations, capping a series of leadership changes at the unit, which has been tainted by food scandals, including a pork mislabelling issue last year that forced it to temporarily shut a dozen stores in central China.

Wal-Mart said in a statement that the fresh investment into Yihaodian will take its stake to around 51 percent and will be subject to government regulatory approval. Wal-Mart did not provide any financial details of the deal and it was not immediately clear how much stake it has now in the China firm.

“E-commerce has been booming for years in China and in many other sectors, and it has only been very recently that it is for supermarket type of goods,” said James Roy, senior analyst from Shanghai-based China Market Research Group. “It is a good investment for Wal-Mart as it has a lot of potential.”

Wal-Mart announced in May last year it planned to buy a minority stake in Yihaodian, a Chinese website selling consumer items and groceries.

“People who order from Yihaodian tend to be more premium customers and that is a decent direction for the company,” Roy said. “It is an interesting move, showing that they are trying something new.”

Yihaodian, with 5,400 staff, operates a logistics network in Shanghai, Beijing, Guangzhou, Wuhan and Chengdu. It serves a growing customer base with same-day and next-day delivery of essential daily items at competitive prices.

Avoiding the ambush

Fred Koury, President and CEO, Smart Business Network Inc.

If you were in the grocery business in the late 1990s, you already had plenty of competition. There were larger chains like Kroger plus all kinds of smaller IGA stores, not to mention the various convenience stores like Dairy Mart, all of whom were fighting for the same grocery dollar.

The market couldn’t possibly take another competitor entering the marketplace, but that’s exactly what happened. Walmart started selling groceries.

When the behemoth entered the grocery market, most smaller players couldn’t compete. The mom-and-pop stores mostly closed their doors and even the big chains suffered. Business was down and margins were hurt.

The surprising part about this is that most of the players in the market didn’t expect it. They were “business as usual,” and then, suddenly, Walmart came to town. Walmart now controls an estimated 16 to 25 percent of the grocery market nationwide, depending on who you ask. Before the late ’90s, Walmart’s share was zero. The market didn’t anticipate being attacked from that direction, but that’s exactly what happened.

The music industry suffered a similar fate. Remember all the retail record stores that were out there? There were multiple stores in each mall plus specialty retailers on every corner. If you wanted music, you drove to the store and bought a CD. Then iTunes and iPods showed up. It was a game changer. Most of those record stores have long since been shuttered. Who would have thought that you would just download music over the Internet and all those stores would be gone?

The lessons are clear: You will have new competitors, but you won’t necessarily know who they will be or what direction they will come from.

Too often, we are locked into studying our existing market, carefully watching every move our known competitors are making. But while we are doing that, an unknown threat is creeping up behind us.

The only way to fight these unknown dangers is to always be prepared for the worst. It’s the old “an ounce of prevention is worth a pound or cure” adage.

The companies that operate the most efficiently and leverage technology to their advantage will be the ones in the best position to fight off all threats, both known and unknown.

Your management team has to be open-minded to all new ideas and be structured in a way that can quickly adapt to market changes. If your team can’t do this, then either you don’t have the right team or the structure is wrong.

Making changes requires quick reactions, and people need to buy in as soon as possible. To be fair, you need to give people the opportunity to change, but if they can’t adapt with you, then you have to replace them or find a position better suited for them.

In today’s ever-changing economy, there are a lot of very difficult decisions that need to be made regarding your people. You can’t be an effective CEO and run your company like you are the head of a fan club with your employees as the members. Making the changes required to survive and thrive in the world requires fast action, and many of the decisions will not be popular. If you are constantly surveying them to see if they approve of your actions, you’ll probably be headed for failure.

Sell your direct reports on your vision and get their buy-in. After that, you need to get as many people on board as possible. Those that can’t do that in a reasonable time need to move on.

Most people don’t like change, but this is a new era we live in. Speed is imperative. In the time you took to read this column, some unknown future competitor just crept a little closer to launching an attack on your market share. Are you ready for them? Or do you need to send out a survey first?

Time’s up.

Fred Koury is president and CEO of Smart Business Network Inc. Reach him with your comments at (800) 988-4726 or [email protected].

Wal-Mart profit below Wall St despite better sales

BENTONVILLE, Ark. ― Wal-Mart Stores Inc’s quarterly profit growth missed Wall Street’s expectations on Tuesday, as the economy continues to weigh on customers at Walmart U.S., by far the company’s largest division.

Still, key sales at those U.S. discount stores rose more than expected, reversing a string of nine quarterly declines.

Shares of Wal-Mart, the world’s largest retailer, were down 1.8 percent at $57.93 in premarket trading.

Wal-Mart earned $3.34 billion, or 97 cents per share, from continuing operations in the third quarter ended on Oct. 31, compared with $3.44 billion, or 95 cents per share, a year earlier. There were fewer shares outstanding during the most recent quarter.The company had forecast a profit of 95 cents to $1.00 per share. Analysts on average expected 98 cents, according to Thomson Reuters I/B/E/S.”Every business segment is stronger today than it was a year ago,” Chief Executive Officer Mike Duke said in a statement.

Sales momentum at Walmart U.S. and the Sam’s Club warehouse chain position the company “exceedingly well for the holidays,” Duke added.

Net sales rose 8.2 percent to $109.5 billion.

Sales at U.S. discount stores open at least a year rose 1.3 percent. That topped the company’s forecast, which called for Walmart U.S. same-store sales, excluding fuel, to be down 1 percent to up 1 percent. It also exceeded the analysts’ average forecast for a rise of 0.3 percent, according to Thomson Reuters data.

Wal-Mart forecast fourth-quarter earnings of $1.42 to $1.48 per share from continuing operations, up from $1.41 a year earlier. That would lead to full-year earnings per share from continuing operations of $4.45 to $4.51, up from $4.18 last year.

Wal-Mart profit up in second quarter, U.S. same-store sales fall

CHICAGO ― Sales at Wal-Mart Stores Inc.’s U.S. discount stores open at least a year fell 0.9 percent during its second quarter, marking the ninth straight quarterly decline as it tries to lure back bargain hunters.

Still, profit beat analyst expectations as international sales, sales at the company’s Sam’s Club unit and a push to rein in expenses helped offset U.S. same-store sales that came in below analysts’ forecasts.

Wal-Mart shares rose 2.3 percent in premarket trading.

The world’s largest retailer said on Tuesday that it earned $1.09 per share from continuing operations, up from 97 cents a year earlier and near the high end of its forecast of $1.05 to $1.10.

Excluding a decline in the market value of currency derivatives, acquisition costs and other items, earnings were $1.12, compared with the average analyst estimate of $1.08, according to Thomson Reuters I/B/E/S.

The U.S. Walmart business is the company’s biggest by far, accounting for $260.3 billion, or 62.1 percent of sales, in fiscal 2011. Customers there have moved to even lower-priced dollar stores as unemployment remains high and inflation cuts into people’s spending power.

The company has seen U.S. shoppers trying to save money by buying items like lower-priced detergents as well as smaller packages ― such as a half gallon of milk instead of a gallon, executives said in a recorded message.

Also, more shoppers are relying on government aid to help them pay for food and other necessities.

In May, Wal-Mart said same-store sales at the Walmart chain in the United States, excluding fuel, would be down 1 percent to up 1 percent. Analysts, on average, were expecting a decline of 0.6 percent, according to Thomson Reuters data.

Wal-Mart said U.S. same-store sales improved each month during the quarter. Fewer customers visited Walmart U.S. stores, but those who shopped spent more on average, the company said.

For the year, Wal-Mart expects a profit of $4.41 to $4.51 a share, compared with its previous forecast of $4.35 to $4.50. The company forecast a profit of 95 cents to $1 for the third quarter.

The goal is still for same-store sales in that unit to turn positive by the end of the year, said Walmart U.S. chief executive Bill Simon.

Wal-Mart shares rose to $51.15 in premarket trading from Monday’s close of $49.98.

Wal-Mart wins in sex-bias case at U.S. Supreme Court

WASHINGTON ― The U.S. Supreme Court has thrown out a massive class-action sex-discrimination lawsuit against Wal-Mart Stores Inc., the biggest ever such case, in a major victory for the world’s largest retailer and for big business in general.

The justices unanimously ruled that more than 1 million female employees nationwide could not proceed together in the lawsuit seeking billions of dollars and accusing Wal-Mart of paying women less and giving them fewer promotions.

The Supreme Court agreed with Wal-Mart, the largest private U.S. employer, that the class-action certification violated federal rules for such lawsuits.

It accepted Wal-Mart’s argument that the female employees in different jobs at 3,400 different stores nationwide and with different supervisors do not have enough in common to be lumped together in a single class-action lawsuit.

The ruling was cheered by the U.S. Chamber of Commerce business group as the most important class action case in more than a decade but denounced by women’s groups.

It represented a major victory for Wal-Mart, which also has faced legal battles including an attempt to unionize and to block the giant retailer from opening stores in New York and other places.

“We are pleased with today’s ruling and believe the court made the right decision. Wal-Mart has had strong policies against discrimination for many years,” the Bentonville, Arkansas-based company said in a statement.

Wal-Mart shares were up 18 cents to $53.02 in late trading after rising as much as 1.3 percent earlier in the day.

Gisel Ruiz, a company executive vice president, said the ruling effectively ended the class-action lawsuit.

Theodore Boutrous, Wal-Mart’s lead attorney in the case, told reporters, “This decision will have a significant impact on other class actions.”

The court rejected class-action status but three remaining female plaintiffs still can pursue their individual claims.