McMillon Seeking Solution For Deep-Rooted Problem At Wal-Mart Stores, Inc. (NYSE:WMT)

Share with your friends


Wal-Mart Stores, Inc. (NYSE:WMT) may have stumbled due to low sales over the past few months followed up by the recent blow on the sales and profits forecast. However, the company’s CEO, Doug McMillon, is determined to make things right.

The company has been struggling to uphold its glory, but low sales have proven to be a huge stumbling block for the company. The company announced on Wednesday morning that sales and profits for the current year will be lower than anticipated, and the effect will carry over to the next year. The announcement resulted in the devastating loss of more than $20 billion in market value in less than an hour.

Wal-mart’s problem predates McMillon’s leadership. He assumed the CEO position in February 2014 while the company has been struggling to push growth in its economic profit for about six years now. Investors were aware of the situation, and it’s, therefore, no surprise that they dumped the company’s shares so quickly. The company’s stock has largely been pegged on the declining economic profits. McMillon is now tasked with coming up with a viable solution to fix this problem and shift the company out of the long stagnation.

McMillon blamed the unappealing projection about the firm’s performance due to the huge investment in the e-commerce market and the plan to increase employee wages by 10%. The company’s stock plunge might be the company’s biggest since 1988. The company has a long to go as far as making up lost profits is concerned. The e-commerce department has especially been slow to catch up with only 3% of the company’s sales coming from feathe e-commerce division. Online shopping only brings in 8% of Wal-Mart’s revenues.

Wal-Mart is also planning to reach out to more customers with its new service called the Curbside pickup where shoppers can easily collect their groceries after buying them online. McMillon hopes that he can boost the online sales to propel the company forward as well as improving its competitive advantage.

Wal-Mart Stores, Inc. - Receive News & Ratings Via Email - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings with's FREE daily email newsletter.

Add Comment