June 3, 2016

Remarks as prepared for Greg Penner

Good morning Walmart!

It’s my honor to formally open our 46th Annual Shareholders Meeting.

This is always such a special week for Walmart. I love seeing the thousands of engaged and excited associates from around the world. It’s also a chance for our Walton family to come together and catch up.

For me personally, my first Shareholders Meeting was over 20 years ago. The video you just saw with Helen introducing our family was from that meeting. I’ll introduce many of the same family members later on, and you'll notice a few of us look a little different now.

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Over the past year, since I became your chairman, I’ve visited stores across the U.S. and on five continents. Along the way, I’ve met some wonderful associates who really inspired me, mostly because of how much they cared.

One person who really stood out to me was the manager of a new test distribution center in Denver, Misty Melton.

Misty’s DC is experimental in every way -- new software, new processes. It’s an entirely new way to serve customers. At the time of my visit, I think Misty and her team had been working for a month straight. I’ve never seen anyone care so much about making customers happy.

And you know what? Misty is making a difference. The metrics at that distribution center are all moving in the right direction.

I tell this story because it illustrates an important part of our culture. Walmart associates go above and beyond to take care of our customers. This part of our culture, our caring, must stay strong.

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The reason is change.

Our customers’ needs are quickly evolving, and as our leaders will discuss throughout the day, Walmart is changing too.

We’re moving away from a model that was about serving customers where we are. And we're moving toward a model that is about serving customers where they are -- when they want to shop, how they want to shop, focused entirely on their needs in their everyday lives.

Every retailer must understand the need for this shift. Those who don't will struggle to stay relevant to customers in the future.

One of our great strengths is that Walmart has never been afraid of change. Sam would change anything if it was right for the customer.

Now let me stress an important point. The fundamentals that made. Walmart great we still need to do -- buy great merchandise, run excellent stores, deliver everyday low prices.

And we have to get great at building personal digital relationships with our customers. Whether that’s checking out at our stores with Walmart Pay, or placing a digital order and picking it up at one of our stores.

When we offer these types of services, our customers are giving great feedback. Here’s what one mom had to say after trying our Pickup service. [Video Plays] Now that is one satisfied customer.

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The Board and I believe we can be this Walmart -- all the time, in every country where we operate. That’s not to say we don’t face challenges. We are realistic about this. Walmart is a big company. But we can’t let what slows most large companies down hold us back – complexity, bureaucracy, silos.

Change is never easy. It takes time, hard work and persistence to move a business of our size in a new direction. But the Board and I couldn’t be more optimistic about the future of our company.

In the U.S., customers tell us that our stores are cleaner, faster and friendlier. Comp sales have risen seven quarters in a row now. We’re moving the needle in the U.S., and you should be proud of your progress.

As a Board, we also liked what we saw in China when we held our meeting there in April. Our stores looked great. Our logistics network is now consolidated and more efficient. Our team is bringing great creativity to the market.

In 2010, when the Board last visited the market, we were optimistic about the future of China. Today we’re optimistic about the future of Walmart in China.

Probably the biggest driver of the Board’s optimism about the company as a whole is our confidence in Walmart’s leaders. There is so much talent, diversity and experience throughout the organization.

This last year, I’ve been having lunches at Sam and Helen’s old house in Bentonville with our nextgen group of leaders. I’ve been absolutely blown away.

At one lunch, I had a Rhode Scholar, a veteran who served honorably for years in the military and an executive with a super sharp technology mind from Sam’s Club. I definitely felt like the underachiever at the table.

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Many parts of our business will change. That includes our Board. Recently, we announced changes to our Board’s structure and governance to help support the company and management team through this time of transition.

We’re going to be smaller and nimbler. We’ll have a lot of depth in technology. And we’ll continue to have strong, independent voices on the board.

This year, a total of 12 directors are on the ballot for election. I’d like to take a moment to recognize them and ask that they stand when I call their names.

  • Our Lead Independent Director, who has taken on additional responsibilities in this role, Jim Cash;
  • Retired Accenture CFO Pam Craig;
  • The chair of our Audit Committee, retired KPMG Chairman, Tim Flynn;
  • Former American Airlines Chairman and CEO Tom Horton;
  • Yahoo President and CEO Marissa Mayer;
  • Walmart President and CEO Doug McMillon;
  • The chair of our Strategic Planning and Finance Committee, former PepsiCo Chairman and CEO, Steve Reinemund;
  • The chair of our Technology and eCommerce Committee, Instagram CEO and Co-Founder Kevin Systrom;
  • The chair of our Compensation, Nominating and Governance Committee, former Leo Burnett Chairman and CEO Linda Wolf;
  • And of course, my predecessor as chairman of the Board of Directors, Rob Walton.

Thank you all for your willingness to continue to serve.

I’m thrilled to introduce one new member who has been nominated to join the Board, Steuart Walton. Steuart is an attorney and the CEO and founder of Game Composites. He has worked for Walmart International

on mergers and acquisitions. Most important, Steuart grew up with Walmart and has a real passion for our company and our people. Steuart, the Board and I look forward to working with you.

Stepping off the Board are four truly outstanding leaders who will be sorely missed.

The first person I’d like to recognize is Aida Alvarez. Aida was an investment banker and former head of the Small Business Administration. She’s been a strong advocate for our associates and telling the Walmart story. Aida is a fantastic role model for women, for the Hispanic community, frankly for all of us. Thank you, Aida, for your service.

Roger Corbett is the retired CEO and group managing director of Woolworths Limited. Roger is one of the all-time great EDLP merchants.  He learned the business from our own Jack Shewmaker. During his service on our Board, Roger has never been afraid to speak his mind. Even with that charming Australian accent, your voice was always heard and your messages were right on point. Roger, we’ll miss those deep retail insights. Thank you.

Jim Walton is a Board member we all know well. Jim has had a fantastic career founding Arvest Bank in much the same spirit as his dad founded Walmart -- to serve the underserved. He’s humble, has the highest integrity, and he’s brought a pragmatic voice to our discussions. We’ll miss Jim on the Board. But we also know and are grateful that he’ll still be around. Thank you, Jim.

Last, I want to appreciate a Board member who is about as good of a person and leader as you will find anywhere. He loves this company. He has lived the culture. And he cares deeply about our people. Thank you, Mike Duke, for all of your contributions to Walmart over the past 20 years.

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Thanks to the strength of our Board, to our past and present leaders, and above all to our associates, Walmart’s business is strong. Our financial position is nothing short of incredible. We’re making investments in the right places. And we’re centering our business around customers -- to understand them and serve them better than ever before. All of this is creating long-term value for our shareholders.

Looking ahead, we’ll continue to be realistic about the challenges we face. Optimistic about the future we can create through change. And confident in ourselves, our leaders, and the direction we’re all heading … together.

Thank you. Let's have a great meeting!