Walmart Inc. · NASDAQ:WMT
Walmart — Investor Day (October 2013)
45 slides from Walmart's investor day presentation, Oct 15, 2013
Slide 1: 20th Annual Meeting for the Investment Community
\YSE:WMT 20th Annual Meeting for the Investment Community OCTOBER 15, 2013
Slide 2: Walmart U.S.
Walmart U.S. Bill Simon 2
Slide 3: Walmart U.S. leadership team
Walmart U.S. leadership team Operations Merchandising Logistics Finance People walmart.com Gisel Duncan Chris Brett Kristin Joel Ruiz Mac Naughton Sultemeier Biggs Oliver Anderson EVP & COO EVP & CMO EVP EVP & CFO EVP EVP & CEO 3
Slide 4: Today's focus
Today’s focus Initiatives to drive traffic and comp sales Building the next generation of retail 4
Slide 5: Second quarter results
Second quarter results Delivering strong Operating income +5.2% profit growth Growing faster than sales Disciplined expense Expenses up +1.7% management 7 bps of expense leverage Net sales up ~$1.4B or +2.1% Challenging sales Continued to gain market share environment Comp -0.3% 5
Slide 6: Focused on improving traffic and comp sales
Focused on improving traffic and comp sales Continue strong performance in… Apparel Home Fresh Wireless Address opportunities in… Dry grocery Snacks & bev. Consumables Entertainment
Slide 7: Focused on improving traffic and comp sales
Focused on improving traffic and comp sales Continue strong performance in… Neighborhood Markets Walmart Express Q2 Comp: +3.0%; Total sales: ~+30% Q2 comp: +14.5% Address opportunities in… Discount stores Bottom 10% supercenters Q2 comp: -0.8% Bottom 10% Q2 comp: -7.5% 7 Note: Q2 comp sales based o
Slide 8: Merchandising initiatives to drive traffic and sales
Merchandising initiatives to drive traffic and sales Aggressive mass merchandising Improving traffic and sales in key categories Going deeper on price Winning the holiday season The biggest black Friday plan ever! Aggressively sharing our message 8
Slide 9: Winning in key categories
Winning in key categories Produce & Meat Home & Apparel Improved quality & execution Focused on basics backed by marketing complemented by brands Market share Meat gains across meat & produce Produce 9 Source: Market share based on The Nielsen Perishables Group, 13 weeks ended July 27, 2013.
Slide 10: How we'll grow market share in electronics
How we’ll grow market share in electronics New items, new programs, and low prices Video games TV features Accessories Programs Pre-order Tablets Wireless Movies 10
Slide 11: Driving value through mass merchandising
Driving value through mass merchandising Multiple levers to deliver value 11
Slide 12: Going deeper on price
Going deeper on price Investing strategically… …delivering results Adult Paper Produce beverages goods Targeted pricing in food & consumables Gaining market share across Elastic, traffic-driving categories key investment categories Locally relevant assortment 12 Source: Produce market share ba
Slide 13: Manufacturing
COGS savings to fuel price investment Sourcing initiatives Upstreaming Global sourcing Upstreaming Merchandise Manufacturing process Production input Domestic Joint business Domestic manufacturing manufacturing planning 100+ projects initiated 13
Slide 14: Winning the holiday season
Winning the holiday season Low prices, broad assortment & number 1 share of voice! October January Serving our customers in every occasion throughout the entire season! 14
Slide 15: Ready for a strong holiday…guaranteed
Ready for a strong holiday…guaranteed The right assortment… At the right price… And the right time! We bought deep on the Low prices backed by Providing customers items customers want our Ad Match flexibility and convenience 15
Slide 16: Connecting with the customer in multiple ways
Connecting with the customer in multiple ways Product & Price Focus Brand Focus Save money. Live better. 34M+ likes Launched in 16 August 2013
Slide 17: Shouting the holiday message!
Shouting the holiday message! 25 billion impressions TV Print #1 share of voice Radio every single week of the season Search Social media Key integrations ~50% greater than nearest competitor 17 Source: Based on purchased A1849 impressions for September 30, 2013 through December 23, 2013;
Slide 18: Operational execution to drive results
Operational execution to drive results Targeted plans for underperforming stores Stores focused on driving sales In-stock, customer experience & mass merchandising Fueling the productivity loop It starts with our associates Providing real opportunities for growth 19
Slide 19: Targeted plans for underperforming stores
Targeted plans for underperforming stores Discount stores Bottom 10% supercenters • ~30% stores approved for supercenter conversion • Store-specific improvement plans • ~30% stores evaluated for supercenter conversion • Increased senior leadership visits • Innovative solutions to win on assortment &
Slide 20: Driving sales and traffic through in-stock
Driving sales and traffic through in-stock In-stock levels ~95% Identifying specific and improving* opportunities Simplifying processes for store associates Leveraging logistics talent & experience 21 * Note: In-stock levels are as of the 4-5-4 period ended July 26, 2013
Slide 21: Improving customer experience
Improving customer experience All metrics improving Strong results in fast FY 14 Q2 vs. Q1 improvement Fast scores YTD 8.19 8.05 +1.7% increase since Feb Fast Clean Feb Sep Merchandise Friendly Faster Value Cleaner FY 14 22
Slide 22: Generating excitement through presentation
Generating excitement through presentation Powerful displays Merchandising softlines Fresh commitment Seasonal excitement 23
Slide 23: Continuing to deliver leverage
Continuing to deliver leverage Front-end Back room Increasing flexibility of check-out process Partnering with logistics to evolve back room & driving productivity Logistics experience Store back rooms Scans per hour +2.4% vs. LY* 24 * YTD based on 4-5-4 period through September 27, 2013
Slide 24: It starts with our associates
It starts with our associates Real opportunity 16k veterans hired since May 27, 2013 Hiring 55k seasonal associates Consistent schedules & hours 160k associates promoted annually 300k associates with 10+ years tenure Engaged associates 100 bps* increase in field associate engagement – At
Slide 25: Building the next generation of retail
Building the next generation of retail Providing access through a multi-format portfolio Expanding in core markets Piloting a unique market ecosystem Leading in convergence of physical & digital 26
Slide 26: Serving customers everywhere
Serving customers everywhere Supercenters Stock-up trip • ~$585B market size • Full food and general merchandise assortment walmart.com Neighborhood Markets Basic food trip • ~$260B market size • Assortment focused on grocery Express Immediate access trip • ~$155B market size • Convenience, fresh an
Slide 27: Leveraging Supercenters for sustainable growth
Leveraging Supercenters for sustainable growth Supercenter • Flex prototype size for different needs • Leveraging capital efficiencies • 300+ new stores through FY17 3,228 units 28 Note: Unit counts as of August 31, 2013
Slide 28: Accelerating Neighborhood Market expansion
Accelerating Neighborhood Market expansion Neighborhood Market • Hybrid format competing across channels • Strong returns while reducing capital 306 units 400+ new stores with total annual sales reaching ~$12B by FY17 29
Slide 29: Refining Walmart Express
Refining Walmart Express Walmart Express • Assortment includes fresh & pharmacy • Double-digit comps in first half of FY14 • Continue to refine supply chain • Density test results positive 20 units 30 Note: Unit counts as of August 31, 2013
Slide 30: Numerous "fill-in" opportunities remain
Numerous “fill-in” opportunities remain Example market For illustrative purposes only Existing supercenters 31
Slide 31: Numerous "fill-in" opportunities remain
Numerous “fill-in” opportunities remain Example market For illustrative purposes only Grocery/mass competitors Dollar competitors 32
Slide 32: Numerous "fill-in" opportunities remain
Numerous “fill-in” opportunities remain Example market For illustrative purposes only Opportunity for large/small format 33
Slide 33: Numerous "fill-in" opportunities remain
Numerous “fill-in” opportunities remain Example market For illustrative purposes only Opportunity for large/small formats Reinforce market position Complement existing supercenters Provide broad access Multiple e-commerce access points 34
Slide 34: Utilizing resources like only Walmart can
Utilizing resources like only Walmart can Testing market ecosystem Tethering Functions Supply chain Assortment Example: Back-office tasks DC Physical & Dotcom Physical Ecommerce Supercenter presence & mobile XPS SUP XPS NHM NHM XPS Sharing functions across a Leverage supercenters to drive Enabling a
Slide 35: Making supply chain more efficient
Making supply chain more efficient Neighborhood Market Distribution center Supercenter Walmart Express 36
Slide 36: Digital/physical convergence will unlock value
Digital/physical convergence will unlock value Anywhere Anytime Convergence Physical presence Only e / m-commerce Supercenters & small formats The seamless unification of digital and physical 37
Slide 37: Ecosystem would enhance financial priorities
Ecosystem would enhance financial priorities Growth Leverage Returns Expected future capital costs per store (small formats) Tethered Multi-format multi-format portfolio portfolio Yr 1 Yr 3 Enabling sales growth Tethering resources Decreasing small format capital through expanded assortment helps ac
Slide 38: Our vision for the market ecosystem
Our vision for the market ecosystem Neighborhood Market Rural supercenter Dotcom DC Supercenter Tethering Regional DC Rural grocery Express Supercenter Example market For illustrative purposes only 39
Slide 39: Road map for testing ecosystem capabilities
Road map for testing ecosystem capabilities Now Build a Develop Test & Roll-out foundation for capabilities learn decision the ecosystem 40
Slide 40: Positioned for sustainable growth
Positioned for sustainable growth Next generation retail growth Supercenter Discount 1962 1987 1998 1999 2013 Walmart founded Supercenter launched NHM launched Dotcom launched Multi-format portfolio 41 9/10/13
Slide 41: Forward-looking, efficient capital strategy
Forward-looking, efficient capital strategy Total capital spend Relatively flat capital ~8% CAGR Growing e-commerce capabilities Growing small stores more rapidly More new supercenters vs. relo/expansions FY07 FY14* FY15* range *Estimated Funded by increasing capital efficiency 42
Slide 42: Aggressive actions to drive capital efficiency
Aggressive actions to drive capital efficiency Supercenter Neighborhood Market Increase speed to market by ~100 days Increase speed to market by ~50 days Improving capital efficiency Improving capital efficiency NPV / CapEx NPV / CapEx + 15 points +15 points Q1 FY13 Q3 FY14* Q1 FY13 Q3 FY14* Improvi
Slide 43: Capital efficiency allows us to build more stores
Capital efficiency allows us to build more stores Small formats Incremental units 120 - 150* ~115* 75 20 FY 12 FY12A FY 13 FY13A FY14E FY15E 44 *Projected as of October 15, 2013
Slide 44: Walmart U.S. FY14/FY15 capital update
Walmart U.S. FY14/FY15 capital update ($ in billions) FY13 FY14 FY14 FY15 CapEx detail Actual Guidance Revised Projection New stores $4.0 $4.0 - $4.2 $4.2 - $4.4 $4.2 - $4.4 Remodels $0.7 $0.6 - $0.7 $0.6 - $0.7 $0.5 - $0.6 Logistics $0.6 $0.4 - $0.5 $0.4 - $0.5 $0.5 - $0.6 Other $0.7 $0.5 - $0.6 $0
Slide 45: Uniquely Walmart
Uniquely Walmart Next generation of retail 46