Wal-Mart Stores, Inc. (NYSE: WMT), branded as Walmart since 2008 and Wal-Mart before then, is an American public multinational corporation that runs chains of large discount department stores and warehouse stores. The company was the world's largest public corporation in 2010 by revenue.[3]
The company was founded by Sam Walton in 1962, incorporated on October 31, 1969, and publicly traded on the New York Stock Exchange in 1972. Wal-Mart, headquartered in Bentonville, Arkansas, is the largest majority private employer[4] Walmart is also the largest grocery retailer in the United States. In 2009, it generated 51% of its US$258 billion sales in the U.S. from grocery business.[5] It also owns and operates the Sam's Club retail warehouses in North America.
Walmart has 8,500 stores in 15 countries, under 55 different names.[6] The company operates under its own name in the United States, including the 50 states. It also operates under its own name in Puerto Rico. It operates in Mexico as Walmex, in the United Kingdom as Asda, in Japan as Seiyu, and in India as Best Price. It has wholly owned operations in Argentina, Brazil, and Canada. Walmart's investments outside North America have had mixed results: its operations in the United Kingdom, South America and China are highly successful, while it was forced to pull out of Germany and South Korea when ventures there were unsuccessful.
Wal-Mart Stores, Inc. is not only the largest retailer in the world, it now also ranks as the largest corporation in the world. The retail giant dwarfs its nearest competition, generating three times the revenues of the world's number two retailer, France's Carrefour SA. Domestically, Wal-Mart has more than 1.2 million workers, making it the nation's largest nongovernmental employer. U.S. operations include 1,478 Wal-Mart discount stores (located in all 50 states); 1,471 Wal-Mart Supercenters, which are combined discount outlets and grocery stores (and which make Wal-Mart the country's top food retailer); 538 Sam's Clubs, the number two U.S. warehouse membership club chain (trailing Costco Wholesale Corporation); and 64 Wal-Mart Neighborhood Markets, smaller food and drug outlets also offering a selection of general merchandise. International operations, which commenced in 1991, include Wal-Mart discount stores in Canada and Puerto Rico; Wal-Mart Supercenters in Argentina, Brazil, China, Germany, Mexico, Puerto Rico, South Korea, and the United Kingdom; and Sam's Clubs in Brazil, China, Mexico, and Puerto Rico. In Mexico, Wal-Mart also operates Bodegas discount stores, Suburbias specialty department stores, Superamas supermarkets, and Vips restaurants. In addition, the company runs Todo Dias supermarkets in Brazil, Neighborhood Markets supermarkets in China, ASDA combined grocery and apparel stores in the United Kingdom, and Amigo supermarkets in Puerto Rico. Wal-Mart also holds a 36 percent stake in The Seiyu, Ltd., a leading Japanese retailer. In all, more than one-quarter of Wal-Mart's stores are located outside the United States, and international operations generate about 18.5 percent of total revenues. The heirs of founder Samuel Walton continue to own about a 38 percent interest in the company.
Wal-Mart Stores, Inc. (Walmart), incorporated in October 1969, operates retail stores. The Company operates in three business segments: Walmart U.S., International and Sam’s Club. During the fiscal year ended January 31, 2010 (fiscal 2010), The Walmart U.S. segment accounted for 63.8% of its net sales, and operated retail stores in different formats in the United States, as well as Walmart’s online retail operations, walmart.com. The International segment consists of retail operations in 14 countries and Puerto Rico. During fiscal 2010, the segment generated 24.7% of the Company’s net sales. The International segment includes different formats of retail stores and restaurants, including discount stores, supercenters and Sam’s Clubs that operate outside the United States. The Sam’s Club segment consists of membership warehouse clubs in the United States and the segment’s online retail operations, samsclub.com. During fiscal 2010, Sam’s Club accounted for 11.5% of its net sales. As of the January 31, 2010, the Company operated 803 discount stores, 2,747 supercenters, 158 Neighborhood Markets and 596 Sam’s Clubs in the United States.
Walmart U.S. Segment
The Walmart U.S. segment operates retail stores in all 50 states, with supercenters in 48 states, discount stores in 47 states and Neighborhood Markets in 16 states. Walmart U.S. does business in six strategic merchandise units across several store formats, including discount stores, supercenters and Neighborhood Markets. Its grocery merchandise consists of a line of grocery items, including meat, produce, deli, bakery, dairy, frozen foods, floral and dry grocery, as well as consumables, such as health and beauty aids, household chemicals, paper goods and pet supplies. Its entertainment merchandise contains electronics, toys, cameras and supplies, photo processing services, cellular phones, cellular service plan contracts and prepaid service. The Company’s hardlines merchandise consists of fabrics and crafts, stationery and books, automotive accessories, hardware and paint, horticulture and accessories, sporting goods, outdoor entertaining and seasonal merchandise. Its apparel merchandise includes apparel for women, girls, men, boys and infants, shoes and jewelry. Its health and wellness includes pharmacy and optical services. Its home includes home furnishings, housewares and small appliances.
The Walmart U.S. segment offers financial services and products, including money orders, wire transfers, check cashing and bill payment. It also markets lines of merchandise under its private-label store brands, including Great Value, Equate, Ol’ Roy, Spring Valley, Parent’s Choice, Marketside, Oak Leaf, Prima Della, Everstart, Faded Glory, No Boundaries, George, Athletic Works, Secret Treasures, Puritan, Hometrends, Mainstays, Ozark Trail, White Stag and Canopy. The Company also markets lines of merchandise under licensed brands, some of which include General Electric, Black & Decker, Rival, Disney, Better Homes & Gardens, OP, Starter, Danskin Now and Just My Size.
International Segment
The International segment consists of the Company’s wholly owned subsidiaries operating in Argentina, Brazil, Canada, Japan, Puerto Rico and the United Kingdom; its majority-owned subsidiaries operating in five countries in Central America, and in Chile and Mexico; its joint ventures in India and China, and its other controlled subsidiaries in China.
Sam’s Club Segment
The Sam’s Club, a membership club warehouse, operates Sam’s Clubs in 48 states. Sam’s Club also provides its members with an assortment of merchandise and services online at www.samsclub.com. Sam’s Club offers brand name merchandise, including hardgoods, some softgoods and private-label items, including Member’s Mark, Bakers & Chefs and Sam’s Club brands in five categories, such as food and beverages; health and wellness; technology, office and entertainment; home and apparel, and tobacco/candy and fuel/auto, within the warehouse club format.
Sam Walton, a businessman from Arkansas, began his retail career when he started work on June 3, 1940, at a J. C. Penney store in Des Moines, Iowa where he remained for 18 months. In 1945, he met Butler Brothers, a regional retailer that owned a chain of variety stores called Ben Franklin and that offered him one in Newport, Arkansas.
Walton was extremely successful in running the store in Newport, far exceeding expectations. However, when the lease came up for renewal, Walton could neither come to agreement on the existing store's lease renewal nor find a new location in Newport. Instead, he opened a new Ben Franklin franchise in Bentonville, Arkansas, but called it "Walton's Five and Dime." There, he achieved higher sales volume by marking up slightly less than most competitors.
On July 2, 1962, Walton opened the first Wal-Mart Discount City store located at 719 Walnut Ave. in Rogers, Arkansas. The building is now occupied by a hardware store and an antique mall. Within five years, the company expanded to 24 stores across Arkansas and reached $12.6 million in sales. In 1968, it opened its first stores outside Arkansas, in Sikeston, Missouri and Claremore, Oklahoma.
By 1999 Wal-Mart was the world's largest retailer (and the largest nongovernmental employer in the world, with 1.14 million employees) and was also the leading retailer in both Mexico and Canada. But it was Europe that was at the forefront of the corporation's international expansion in the late 1990s. In December 1998 Wal-Mart bolstered its German operations through the purchase of 74 Interspar hypermarkets from SPAR Handels AG. Then in July 1999 the company entered the U.K. market for the first time by acquiring ASDA Group plc for about $10.8 billion. Ranking as the third largest supermarket operator in the United Kingdom, ASDA operated 229 stores at the time of its acquisition and generated about $13.2 billion in annual revenues. Its stores were run in a fashion similar to that of Wal-Mart Supercenters: they were large-format units offering food, apparel, and general merchandise at everyday low prices, with an emphasis on private-label brands and an avoidance of promotions. The stores acquired in the United Kingdom continued to operate under the ASDA name, whereas the German units were eventually rebadged as Wal-Mart Supercenters.
In January 2000 H. Lee Scott, Jr., a 20-year company veteran, was promoted from chief operating officer to president and CEO. Scott succeeded Glass, who remained on the board of directors as chairman of the executive committee. The new leader had played an important role in reversing the declining results at Wal-Mart's domestic operations. One key to the turnaround was the adoption of a more aggressive approach to controlling bloated inventories at the stores and warehouses. Making better use of technology led both to significant decreases in inventory levels and to improved performance in keeping store shelves better stocked. Also during 2000 Wal-Mart spent $587 million to purchase another 6 percent of Cifra, which was subsequently renamed Wal-Mart de México S.A. de C.V. Wal-Mart held a stake of approximately 62 percent in this subsidiary.
During 2001 Wal-Mart became the largest food retailer in the United States as its grocery sales reached $56 billion. This milestone was reached in large measure through the aggressive rollout of the Wal-Mart Supercenter format. By early 2002 there were about 1,050 Supercenters in the United States, while the number of Wal-Mart discount stores had declined to fewer than 1,650. In fiscal 2002 alone, 178 Supercenters were opened, whereas there was a net reduction in discount units of 89 (121 had been converted to Supercenters, one was closed, and 33 were opened). At the same time, the Wal-Mart Neighborhood Markets format had grown to include 31 stores, providing a further base for the ever rising grocery revenue.
Despite some setbacks in its attempt to penetrate the very difficult German retail market, Wal-Mart kept up its steady international expansion. In 2001 the first Wal-Mart Supercenter in Puerto Rico opened for business. Then in December 2002 the firm paid approximately $242 million for Supermercados Amigo, Inc., the leading supermarket chain in Puerto Rico, with 37 outlets. Next on the expansion roster was Japan. In May 2002 Wal-Mart acquired a 6.1 percent interest in The Seiyu, Ltd. for about $51 million. Seiyu operated about 400 stores in Japan of various formats but mainly of the food-and-clothing variety. It ranked as Japan's fifth largest supermarket chain. In December 2002 Wal-Mart spent another $459 million to expand its stake in Seiyu to 35 percent, and it also had the right to increase it to nearly 67 percent by 2007. By 2003 Wal-Mart had more than 330,000 workers outside the United States, and its international operations produced $40.7 billion in sales that year, representing a 15 percent increase over the preceding year as well as about 17 percent of total revenues. International operating profits for 2003 jumped nearly 56 percent, hitting $2.03 billion. In May 2003 Wal-Mart, seeking to focus solely on retailing, sold its McLane wholesale distribution subsidiary to Berkshire Hathaway Inc. for $1.5 billion.
Overall fiscal 2003 revenues of $244.52 billion made Wal-Mart Stores, Inc. the world's largest corporation. Its achievement of becoming the first nonmanufacturing company to top the Fortune 500 was fitting as the company increasingly had become a symbol of both the positive and negative aspects of the U.S. economy of the early 2000s. In an October 6, 2003 article titled "Is Wal-Mart Too Powerful?," Business Week suggested a number of ways in which to view the power of Wal-Mart, such as: its drive to keep costs and prices down being at least partly responsible for the low rate of inflation in the late 20th and early 21st centuries; its cost-cutting focus also being a contributing factor in the shifting of factories outside the United States; and its 2002 imports from China of $12 billion representing 10 percent of total U.S. imports from that country. Furthermore, Wal-Mart had always taken a hard line on labor costs, particularly by resisting efforts to unionize its workforce. Two consequences of this were the company's extraordinarily high turnover rate of 44 percent per year for its hourly workers and the fact that in 2001 the average Wal-Mart sales clerk made less than the federal poverty level. As another way of looking at the power of Wal-Mart, Fortune in a March 3, 2003 issue estimated that the company's share of the U.S. gross national product (GNP) in 2002 was 2.3 percent. This approached the levels reached by General Motors Corporation (3 percent in 1955) and U.S. Steel Corp. (2.8 percent in 1917) when these firms were at their respective peaks. Fortune estimated that Wal-Mart's share of the nation's economy would become the biggest ever by around 2006, assuming the continuation of its then current growth rate.
As it continued to be dogged by detractors opposed to its business practices, Wal-Mart launched a PR offensive in 2003 to counter the relentless criticism it faced. But the retail giant had to contend with much more than just the attacks of journalists and social critics; it was facing a barrage of potentially damaging lawsuits. These included a host of class-action lawsuits involving employee claims that they were asked to work off the clock and to not take scheduled breaks. A sex discrimination lawsuit that potentially could involve 1.5 million current and former female employees alleged that Wal-Mart engaged in a pattern of discrimination against women in pay and promotion. In addition, in the fall of 2003 a federal investigation was launched into the company's use of a cleaning contractor that employed illegal immigrants.
Notwithstanding these legal battles, Wal-Mart Stores, Inc. was placing no brakes on its drive to become ever larger. During 2004 the company planned to open at least 220 new Supercenters, while its discount store chain would be reduced by a net of about 90 units. This would mean that for the first time there would be more Supercenters than Wal-Mart discount stores in the United States. The Neighborhood Market chain was scheduled to grow by between 25 and 30 units, and Sam's Club would add about 15 stores. The international store count would likewise increase, by about 100 units. It seemed clear that Wal-Mart intended to aggressively defend its position as the largest retailer of all time.
Principal Subsidiaries: Wal-Mart Stores East, LP; Wal-Mart Property Company; Wal-Mart Real Estate Business Trust; ASDA Group plc (U.K.).
Principal Divisions: Wal-Mart Discount Stores; Wal-Mart Supercenters; Wal-Mart Neighborhood Markets; Sam's Club.
Principal Competitors: Target Corporation; Kmart Corporation; Costco Wholesale Corporation; The Kroger Co.; Albertson's, Inc.; Walgreen Co.; CVS Corporation; Carrefour SA; Royal Ahold N.V.; Toys 'R' Us, Inc.
OVERALL
Beta: 0.32
Market Cap (Mil.): $194,253.00
Shares Outstanding (Mil.): 3,486.24
Annual Dividend: 1.46
Yield (%): 2.62
FINANCIALS
WMT.N Industry Sector
P/E (TTM): 13.27 30.16 21.66
EPS (TTM): 12.48 -- --
ROI: 13.79 8.13 1.89
ROE: 22.09 12.18 2.88
Statistics:
Public Company
Incorporated: 1969
Employees: 1,500,000
Sales: $256.68 billion (2004)
Stock Exchanges: New York Pacific
Ticker Symbol: WMT
NAIC: 445110 Supermarkets and Other Grocery (Except Convenience) Stores; 452910 Warehouse Clubs and Superstores; 452990 All Other General Merchandise Stores; 454110 Electronic Shopping and Mail-Order Houses
Company Perspectives:
Sam Walton built Wal-Mart on the revolutionary philosophies of excellence in the workplace, customer service and always having the lowest prices. We have always stayed true to the Three Basic Beliefs Mr. Sam established in 1962: 1. Respect for the Individual. 2. Service to Our Customers. 3. Strive for Excellence
Key Dates:
1962: Samuel Walton and his brother J.L. (Bud) Walton open their first Wal-Mart Discount City in Rogers, Arkansas.
1969: The brothers are operating 18 Wal-Mart stores in Arkansas, Missouri, Kansas, and Oklahoma; they incorporate these ventures as Wal-Mart Stores, Inc.
1970: Wal-Mart stock begins trading over the counter.
1972: The company's stock is listed on the New York Stock Exchange.
1979: Revenues surpass $1 billion; the company is the fastest to reach this milestone.
1983: The first Sam's Wholesale Clubs are opened; they are later renamed Sam's Clubs.
1988: The company opens its first Wal-Mart Supercenters, combined discount outlets and grocery stores.
1990: Wal-Mart becomes the largest retailer in the United States.
1991: Foreign expansion begins with the creation of a joint venture with Cifra, S.A. de C.V., Mexico's largest retailer.
1994: The company enters the Canadian market through the purchase from Woolworth Corporation of 122 Woolco stores.
1997: Revenues surpass $100 billion; Mexican joint ventures are merged into Cifra, and then Wal-Mart acquires a controlling stake in Cifra; the company enters Europe through acquisition of the 21-unit Wertkauf hypermarket chain in Germany.
1998: The first Wal-Mart Neighborhood Markets are opened in the United States; 74 Interspar hypermarkets are acquired in Germany.
1999: ASDA Group plc, third largest U.K. supermarket operator, is acquired for about $10.8 billion.
2000: After Wal-Mart increases its stake in Cifra to about 63 percent, Cifra is renamed Wal-Mart de México S.A. de C.V.
2002: Wal-Mart takes a 35 percent interest in The Seiyu, Ltd., a leading Japanese retailer.
2003: Fiscal 2003 revenues of $244.52 billion make Wal-Mart the world's largest corporation.
Name Age Since Current Position
S. Robson Walton 66 1992 Chairman of the Board
Michael Duke 61 2009 President, Chief Executive Officer, Director
Eduardo Castro-Wright 56 2010 Vice Chairman - Global eCommerce and Global Sourcing
Charles Holley 54 2010 Chief Financial Officer, Executive Vice President
Rollin Ford 48 2006 Executive Vice President, Chief Information Officer
Jeffrey Gearhart 46 2010 Executive Vice President, General Counsel, Corporate Secretary
C. Douglas McMillon 44 2009 Executive Vice President; President & CEO of Walmart International
Susan Chambers 54 2006 Executive Vice President - People Division
Leslie Dach 56 2006 Executive Vice President - Corporate Affairs and Government Relations
Brian Cornell 52 2009 Executive Vice President; President and Chief Executive Officer - Sam’s Club Division
William Simon 51 2010 Executive Vice President; President and Chief Executive Officer of Walmart U.S.
Cindy Davis 2011 Executive Vice President - Global Consumer Insights
Steven Whaley 51 2007 Senior Vice President, Controller
H. Lee Scott 62 2011 Director
Jim Walton 62 2005 Director
James Breyer 49 2010 Presiding Independent Director
M. Michele Burns 53 2003 Independent Director
Christopher Williams 53 2004 Independent Director
Douglas Daft 68 2005 Independent Director
Linda Wolf 63 2005 Independent Director
Aida Alvarez 61 2006 Independent Director
James Cash 63 2006 Independent Director
Roger Corbett 68 2006 Independent Director
Gregory Penner 41 2008 Independent Director
Arne Sorenson 52 2008 Independent Director
Steven Reinemund 63 2010 Independent Director
Address:
702 Southwest 8th Street
Bentonville, Arkansas 72716-8611
U.S.A.
The company was founded by Sam Walton in 1962, incorporated on October 31, 1969, and publicly traded on the New York Stock Exchange in 1972. Wal-Mart, headquartered in Bentonville, Arkansas, is the largest majority private employer[4] Walmart is also the largest grocery retailer in the United States. In 2009, it generated 51% of its US$258 billion sales in the U.S. from grocery business.[5] It also owns and operates the Sam's Club retail warehouses in North America.
Walmart has 8,500 stores in 15 countries, under 55 different names.[6] The company operates under its own name in the United States, including the 50 states. It also operates under its own name in Puerto Rico. It operates in Mexico as Walmex, in the United Kingdom as Asda, in Japan as Seiyu, and in India as Best Price. It has wholly owned operations in Argentina, Brazil, and Canada. Walmart's investments outside North America have had mixed results: its operations in the United Kingdom, South America and China are highly successful, while it was forced to pull out of Germany and South Korea when ventures there were unsuccessful.
Wal-Mart Stores, Inc. is not only the largest retailer in the world, it now also ranks as the largest corporation in the world. The retail giant dwarfs its nearest competition, generating three times the revenues of the world's number two retailer, France's Carrefour SA. Domestically, Wal-Mart has more than 1.2 million workers, making it the nation's largest nongovernmental employer. U.S. operations include 1,478 Wal-Mart discount stores (located in all 50 states); 1,471 Wal-Mart Supercenters, which are combined discount outlets and grocery stores (and which make Wal-Mart the country's top food retailer); 538 Sam's Clubs, the number two U.S. warehouse membership club chain (trailing Costco Wholesale Corporation); and 64 Wal-Mart Neighborhood Markets, smaller food and drug outlets also offering a selection of general merchandise. International operations, which commenced in 1991, include Wal-Mart discount stores in Canada and Puerto Rico; Wal-Mart Supercenters in Argentina, Brazil, China, Germany, Mexico, Puerto Rico, South Korea, and the United Kingdom; and Sam's Clubs in Brazil, China, Mexico, and Puerto Rico. In Mexico, Wal-Mart also operates Bodegas discount stores, Suburbias specialty department stores, Superamas supermarkets, and Vips restaurants. In addition, the company runs Todo Dias supermarkets in Brazil, Neighborhood Markets supermarkets in China, ASDA combined grocery and apparel stores in the United Kingdom, and Amigo supermarkets in Puerto Rico. Wal-Mart also holds a 36 percent stake in The Seiyu, Ltd., a leading Japanese retailer. In all, more than one-quarter of Wal-Mart's stores are located outside the United States, and international operations generate about 18.5 percent of total revenues. The heirs of founder Samuel Walton continue to own about a 38 percent interest in the company.
Wal-Mart Stores, Inc. (Walmart), incorporated in October 1969, operates retail stores. The Company operates in three business segments: Walmart U.S., International and Sam’s Club. During the fiscal year ended January 31, 2010 (fiscal 2010), The Walmart U.S. segment accounted for 63.8% of its net sales, and operated retail stores in different formats in the United States, as well as Walmart’s online retail operations, walmart.com. The International segment consists of retail operations in 14 countries and Puerto Rico. During fiscal 2010, the segment generated 24.7% of the Company’s net sales. The International segment includes different formats of retail stores and restaurants, including discount stores, supercenters and Sam’s Clubs that operate outside the United States. The Sam’s Club segment consists of membership warehouse clubs in the United States and the segment’s online retail operations, samsclub.com. During fiscal 2010, Sam’s Club accounted for 11.5% of its net sales. As of the January 31, 2010, the Company operated 803 discount stores, 2,747 supercenters, 158 Neighborhood Markets and 596 Sam’s Clubs in the United States.
Walmart U.S. Segment
The Walmart U.S. segment operates retail stores in all 50 states, with supercenters in 48 states, discount stores in 47 states and Neighborhood Markets in 16 states. Walmart U.S. does business in six strategic merchandise units across several store formats, including discount stores, supercenters and Neighborhood Markets. Its grocery merchandise consists of a line of grocery items, including meat, produce, deli, bakery, dairy, frozen foods, floral and dry grocery, as well as consumables, such as health and beauty aids, household chemicals, paper goods and pet supplies. Its entertainment merchandise contains electronics, toys, cameras and supplies, photo processing services, cellular phones, cellular service plan contracts and prepaid service. The Company’s hardlines merchandise consists of fabrics and crafts, stationery and books, automotive accessories, hardware and paint, horticulture and accessories, sporting goods, outdoor entertaining and seasonal merchandise. Its apparel merchandise includes apparel for women, girls, men, boys and infants, shoes and jewelry. Its health and wellness includes pharmacy and optical services. Its home includes home furnishings, housewares and small appliances.
The Walmart U.S. segment offers financial services and products, including money orders, wire transfers, check cashing and bill payment. It also markets lines of merchandise under its private-label store brands, including Great Value, Equate, Ol’ Roy, Spring Valley, Parent’s Choice, Marketside, Oak Leaf, Prima Della, Everstart, Faded Glory, No Boundaries, George, Athletic Works, Secret Treasures, Puritan, Hometrends, Mainstays, Ozark Trail, White Stag and Canopy. The Company also markets lines of merchandise under licensed brands, some of which include General Electric, Black & Decker, Rival, Disney, Better Homes & Gardens, OP, Starter, Danskin Now and Just My Size.
International Segment
The International segment consists of the Company’s wholly owned subsidiaries operating in Argentina, Brazil, Canada, Japan, Puerto Rico and the United Kingdom; its majority-owned subsidiaries operating in five countries in Central America, and in Chile and Mexico; its joint ventures in India and China, and its other controlled subsidiaries in China.
Sam’s Club Segment
The Sam’s Club, a membership club warehouse, operates Sam’s Clubs in 48 states. Sam’s Club also provides its members with an assortment of merchandise and services online at www.samsclub.com. Sam’s Club offers brand name merchandise, including hardgoods, some softgoods and private-label items, including Member’s Mark, Bakers & Chefs and Sam’s Club brands in five categories, such as food and beverages; health and wellness; technology, office and entertainment; home and apparel, and tobacco/candy and fuel/auto, within the warehouse club format.
Sam Walton, a businessman from Arkansas, began his retail career when he started work on June 3, 1940, at a J. C. Penney store in Des Moines, Iowa where he remained for 18 months. In 1945, he met Butler Brothers, a regional retailer that owned a chain of variety stores called Ben Franklin and that offered him one in Newport, Arkansas.
Walton was extremely successful in running the store in Newport, far exceeding expectations. However, when the lease came up for renewal, Walton could neither come to agreement on the existing store's lease renewal nor find a new location in Newport. Instead, he opened a new Ben Franklin franchise in Bentonville, Arkansas, but called it "Walton's Five and Dime." There, he achieved higher sales volume by marking up slightly less than most competitors.
On July 2, 1962, Walton opened the first Wal-Mart Discount City store located at 719 Walnut Ave. in Rogers, Arkansas. The building is now occupied by a hardware store and an antique mall. Within five years, the company expanded to 24 stores across Arkansas and reached $12.6 million in sales. In 1968, it opened its first stores outside Arkansas, in Sikeston, Missouri and Claremore, Oklahoma.
By 1999 Wal-Mart was the world's largest retailer (and the largest nongovernmental employer in the world, with 1.14 million employees) and was also the leading retailer in both Mexico and Canada. But it was Europe that was at the forefront of the corporation's international expansion in the late 1990s. In December 1998 Wal-Mart bolstered its German operations through the purchase of 74 Interspar hypermarkets from SPAR Handels AG. Then in July 1999 the company entered the U.K. market for the first time by acquiring ASDA Group plc for about $10.8 billion. Ranking as the third largest supermarket operator in the United Kingdom, ASDA operated 229 stores at the time of its acquisition and generated about $13.2 billion in annual revenues. Its stores were run in a fashion similar to that of Wal-Mart Supercenters: they were large-format units offering food, apparel, and general merchandise at everyday low prices, with an emphasis on private-label brands and an avoidance of promotions. The stores acquired in the United Kingdom continued to operate under the ASDA name, whereas the German units were eventually rebadged as Wal-Mart Supercenters.
In January 2000 H. Lee Scott, Jr., a 20-year company veteran, was promoted from chief operating officer to president and CEO. Scott succeeded Glass, who remained on the board of directors as chairman of the executive committee. The new leader had played an important role in reversing the declining results at Wal-Mart's domestic operations. One key to the turnaround was the adoption of a more aggressive approach to controlling bloated inventories at the stores and warehouses. Making better use of technology led both to significant decreases in inventory levels and to improved performance in keeping store shelves better stocked. Also during 2000 Wal-Mart spent $587 million to purchase another 6 percent of Cifra, which was subsequently renamed Wal-Mart de México S.A. de C.V. Wal-Mart held a stake of approximately 62 percent in this subsidiary.
During 2001 Wal-Mart became the largest food retailer in the United States as its grocery sales reached $56 billion. This milestone was reached in large measure through the aggressive rollout of the Wal-Mart Supercenter format. By early 2002 there were about 1,050 Supercenters in the United States, while the number of Wal-Mart discount stores had declined to fewer than 1,650. In fiscal 2002 alone, 178 Supercenters were opened, whereas there was a net reduction in discount units of 89 (121 had been converted to Supercenters, one was closed, and 33 were opened). At the same time, the Wal-Mart Neighborhood Markets format had grown to include 31 stores, providing a further base for the ever rising grocery revenue.
Despite some setbacks in its attempt to penetrate the very difficult German retail market, Wal-Mart kept up its steady international expansion. In 2001 the first Wal-Mart Supercenter in Puerto Rico opened for business. Then in December 2002 the firm paid approximately $242 million for Supermercados Amigo, Inc., the leading supermarket chain in Puerto Rico, with 37 outlets. Next on the expansion roster was Japan. In May 2002 Wal-Mart acquired a 6.1 percent interest in The Seiyu, Ltd. for about $51 million. Seiyu operated about 400 stores in Japan of various formats but mainly of the food-and-clothing variety. It ranked as Japan's fifth largest supermarket chain. In December 2002 Wal-Mart spent another $459 million to expand its stake in Seiyu to 35 percent, and it also had the right to increase it to nearly 67 percent by 2007. By 2003 Wal-Mart had more than 330,000 workers outside the United States, and its international operations produced $40.7 billion in sales that year, representing a 15 percent increase over the preceding year as well as about 17 percent of total revenues. International operating profits for 2003 jumped nearly 56 percent, hitting $2.03 billion. In May 2003 Wal-Mart, seeking to focus solely on retailing, sold its McLane wholesale distribution subsidiary to Berkshire Hathaway Inc. for $1.5 billion.
Overall fiscal 2003 revenues of $244.52 billion made Wal-Mart Stores, Inc. the world's largest corporation. Its achievement of becoming the first nonmanufacturing company to top the Fortune 500 was fitting as the company increasingly had become a symbol of both the positive and negative aspects of the U.S. economy of the early 2000s. In an October 6, 2003 article titled "Is Wal-Mart Too Powerful?," Business Week suggested a number of ways in which to view the power of Wal-Mart, such as: its drive to keep costs and prices down being at least partly responsible for the low rate of inflation in the late 20th and early 21st centuries; its cost-cutting focus also being a contributing factor in the shifting of factories outside the United States; and its 2002 imports from China of $12 billion representing 10 percent of total U.S. imports from that country. Furthermore, Wal-Mart had always taken a hard line on labor costs, particularly by resisting efforts to unionize its workforce. Two consequences of this were the company's extraordinarily high turnover rate of 44 percent per year for its hourly workers and the fact that in 2001 the average Wal-Mart sales clerk made less than the federal poverty level. As another way of looking at the power of Wal-Mart, Fortune in a March 3, 2003 issue estimated that the company's share of the U.S. gross national product (GNP) in 2002 was 2.3 percent. This approached the levels reached by General Motors Corporation (3 percent in 1955) and U.S. Steel Corp. (2.8 percent in 1917) when these firms were at their respective peaks. Fortune estimated that Wal-Mart's share of the nation's economy would become the biggest ever by around 2006, assuming the continuation of its then current growth rate.
As it continued to be dogged by detractors opposed to its business practices, Wal-Mart launched a PR offensive in 2003 to counter the relentless criticism it faced. But the retail giant had to contend with much more than just the attacks of journalists and social critics; it was facing a barrage of potentially damaging lawsuits. These included a host of class-action lawsuits involving employee claims that they were asked to work off the clock and to not take scheduled breaks. A sex discrimination lawsuit that potentially could involve 1.5 million current and former female employees alleged that Wal-Mart engaged in a pattern of discrimination against women in pay and promotion. In addition, in the fall of 2003 a federal investigation was launched into the company's use of a cleaning contractor that employed illegal immigrants.
Notwithstanding these legal battles, Wal-Mart Stores, Inc. was placing no brakes on its drive to become ever larger. During 2004 the company planned to open at least 220 new Supercenters, while its discount store chain would be reduced by a net of about 90 units. This would mean that for the first time there would be more Supercenters than Wal-Mart discount stores in the United States. The Neighborhood Market chain was scheduled to grow by between 25 and 30 units, and Sam's Club would add about 15 stores. The international store count would likewise increase, by about 100 units. It seemed clear that Wal-Mart intended to aggressively defend its position as the largest retailer of all time.
Principal Subsidiaries: Wal-Mart Stores East, LP; Wal-Mart Property Company; Wal-Mart Real Estate Business Trust; ASDA Group plc (U.K.).
Principal Divisions: Wal-Mart Discount Stores; Wal-Mart Supercenters; Wal-Mart Neighborhood Markets; Sam's Club.
Principal Competitors: Target Corporation; Kmart Corporation; Costco Wholesale Corporation; The Kroger Co.; Albertson's, Inc.; Walgreen Co.; CVS Corporation; Carrefour SA; Royal Ahold N.V.; Toys 'R' Us, Inc.
OVERALL
Beta: 0.32
Market Cap (Mil.): $194,253.00
Shares Outstanding (Mil.): 3,486.24
Annual Dividend: 1.46
Yield (%): 2.62
FINANCIALS
WMT.N Industry Sector
P/E (TTM): 13.27 30.16 21.66
EPS (TTM): 12.48 -- --
ROI: 13.79 8.13 1.89
ROE: 22.09 12.18 2.88
Statistics:
Public Company
Incorporated: 1969
Employees: 1,500,000
Sales: $256.68 billion (2004)
Stock Exchanges: New York Pacific
Ticker Symbol: WMT
NAIC: 445110 Supermarkets and Other Grocery (Except Convenience) Stores; 452910 Warehouse Clubs and Superstores; 452990 All Other General Merchandise Stores; 454110 Electronic Shopping and Mail-Order Houses
Company Perspectives:
Sam Walton built Wal-Mart on the revolutionary philosophies of excellence in the workplace, customer service and always having the lowest prices. We have always stayed true to the Three Basic Beliefs Mr. Sam established in 1962: 1. Respect for the Individual. 2. Service to Our Customers. 3. Strive for Excellence
Key Dates:
1962: Samuel Walton and his brother J.L. (Bud) Walton open their first Wal-Mart Discount City in Rogers, Arkansas.
1969: The brothers are operating 18 Wal-Mart stores in Arkansas, Missouri, Kansas, and Oklahoma; they incorporate these ventures as Wal-Mart Stores, Inc.
1970: Wal-Mart stock begins trading over the counter.
1972: The company's stock is listed on the New York Stock Exchange.
1979: Revenues surpass $1 billion; the company is the fastest to reach this milestone.
1983: The first Sam's Wholesale Clubs are opened; they are later renamed Sam's Clubs.
1988: The company opens its first Wal-Mart Supercenters, combined discount outlets and grocery stores.
1990: Wal-Mart becomes the largest retailer in the United States.
1991: Foreign expansion begins with the creation of a joint venture with Cifra, S.A. de C.V., Mexico's largest retailer.
1994: The company enters the Canadian market through the purchase from Woolworth Corporation of 122 Woolco stores.
1997: Revenues surpass $100 billion; Mexican joint ventures are merged into Cifra, and then Wal-Mart acquires a controlling stake in Cifra; the company enters Europe through acquisition of the 21-unit Wertkauf hypermarket chain in Germany.
1998: The first Wal-Mart Neighborhood Markets are opened in the United States; 74 Interspar hypermarkets are acquired in Germany.
1999: ASDA Group plc, third largest U.K. supermarket operator, is acquired for about $10.8 billion.
2000: After Wal-Mart increases its stake in Cifra to about 63 percent, Cifra is renamed Wal-Mart de México S.A. de C.V.
2002: Wal-Mart takes a 35 percent interest in The Seiyu, Ltd., a leading Japanese retailer.
2003: Fiscal 2003 revenues of $244.52 billion make Wal-Mart the world's largest corporation.
Name Age Since Current Position
S. Robson Walton 66 1992 Chairman of the Board
Michael Duke 61 2009 President, Chief Executive Officer, Director
Eduardo Castro-Wright 56 2010 Vice Chairman - Global eCommerce and Global Sourcing
Charles Holley 54 2010 Chief Financial Officer, Executive Vice President
Rollin Ford 48 2006 Executive Vice President, Chief Information Officer
Jeffrey Gearhart 46 2010 Executive Vice President, General Counsel, Corporate Secretary
C. Douglas McMillon 44 2009 Executive Vice President; President & CEO of Walmart International
Susan Chambers 54 2006 Executive Vice President - People Division
Leslie Dach 56 2006 Executive Vice President - Corporate Affairs and Government Relations
Brian Cornell 52 2009 Executive Vice President; President and Chief Executive Officer - Sam’s Club Division
William Simon 51 2010 Executive Vice President; President and Chief Executive Officer of Walmart U.S.
Cindy Davis 2011 Executive Vice President - Global Consumer Insights
Steven Whaley 51 2007 Senior Vice President, Controller
H. Lee Scott 62 2011 Director
Jim Walton 62 2005 Director
James Breyer 49 2010 Presiding Independent Director
M. Michele Burns 53 2003 Independent Director
Christopher Williams 53 2004 Independent Director
Douglas Daft 68 2005 Independent Director
Linda Wolf 63 2005 Independent Director
Aida Alvarez 61 2006 Independent Director
James Cash 63 2006 Independent Director
Roger Corbett 68 2006 Independent Director
Gregory Penner 41 2008 Independent Director
Arne Sorenson 52 2008 Independent Director
Steven Reinemund 63 2010 Independent Director
Address:
702 Southwest 8th Street
Bentonville, Arkansas 72716-8611
U.S.A.