Brett Biggs: We Will Do Both
June 2, 2017
Remarks as prepared for Brett Biggs, Chief Financial Officer, Wal-Mart Stores, Inc.
Good morning Walmart! It’s great to be with you this morning to celebrate our company. Together we’ve built an incredible business that is positioned to win – today and in the future! I’m the finance guy, so we’re going to get to some numbers soon, but before we do that, I’d like to tell you a quick story.
When I was a kid I loved to play sports. I was, and still am, very competitive. When I was in 8th grade I remember asking my dad whether I should focus more on my grades or on my sports. He gave me that “dad look” and said, “Uh, yeah. You’ll do both.” He knew that being balanced was a big part of being successful. I’m also sure he had figured the odds of the NBA calling on me weren’t really high!
That story about the importance of both came to mind when I was thinking about what to say today. Less than a year ago, we talked to our investors about a new financial framework. It consists of three key elements of how we measure our success:
- Strong, efficient growth
- Operating discipline, and
- Strategic capital allocation.
But it's really just about two main things we need to do as a company to be successful: grow comp sales in our existing stores, your stores, and in e-commerce; and spend our money wisely. It’s about doing “both” every day. David Glass, our CEO after Sam Walton, (and who's here with us this morning) once said, “There are two ways to increase profit—cut expenses and increase sales. You must do both well to succeed.” So how are we doing?
In growing sales our company is unbelievable. Last year, sales were up over $13 billion dollars in constant currency and total revenue was $486 billion –and you ALL played a role in that! Is anyone here from Walmart U.S? At Walmart U.S. we’ve reported 11 straight quarters of positive comp sales and ten straight quarters of positive comp traffic in our stores. Great results!
Sam’s Club has had positive comps for five straight quarters and is leading the way in using technology to take care of our members. In Walmart International, ten of our 11 markets posted positive comp sales last year and seven of those markets grew comp sales by more than four percent. That’s what we like! And when it comes to U.S. e-commerce – wow… it’s been a huge year, hasn’t it? Last quarter U.S. e-commerce reported 63% sales growth! Great job!
As we’ve grown sales, we’ve made important investments in our people, in technology, and other key areas of the business. And that was the right thing to do. But as we’ve grown over the years we haven’t been as disciplined as we should have been in managing expenses. And, to get better, we always have to be honest with ourselves, right?
We usually like seeing charts go up and to the right, but not the one that shows expenses. I know we can grow sales and be better with how we spend our money. I know it because we are starting to see expenses growing slower than sales in parts of the business. And we plan to do better as we go forward. Now, to continue on this journey will require new technology, new processes, and most of all a committed team of associates like you!
A few weeks ago, I had the chance to see such a team in action. I visited store 4601 in Las Cruces, New Mexico. Last year, sales were up in the store nearly five percent to over $100m and profit was up even more than sales. At the same time, inventory was down. Great results! John is here this morning with us. I got to spend some time with John. That is a guy who knows his business and knows his customers. Thank you, John!
Now, guess what would happen if we did what John, David, Carolyn and the team are doing, everywhere around the world? We would run a better business with better customer service, bigger bonuses for our associates, and happier shareholders. I like this squiggly line…any idea what it is? Yep, it’s our stock price since the beginning of last year. We’ve gone from a little over $60 per share to almost $80 yesterday! Our customers and our investors are starting to see that we can do both. Would anyone like to see that line continue to go up? Me too! So, how will we do “both”?
We will grow sales by being item merchants, knowing our numbers, being in stock, and delighting customers. And when it comes to expenses, we can make a difference by finding ways to do more with less, eliminate waste, save energy costs or be more careful with supplies. Every dollar counts! If we were able to do 1% better with our expenses, just 1 percent, that would be over $1 billion every year! We can pass those savings onto customers. Invest in technology, in e-commerce, in you. Each one of these…dollars, Yen, Pesos, Yuan, Reals, Pounds, Rand that a customer gives us in sales is earned every day. They trust us. More than ever, today’s customers have choices. So, let’s be disciplined about how we spend the money they give us. Will you help us do both? Grow sales and be better in how we spend money? Will you say it with me? “We will do both”
Walmart is one of the strongest companies to ever exist on this planet. We have all the resources we could ask for, and it's up to us to continue this success now and into the future. There aren’t many things in life that are more fun that winning. And, if we can do both, grow sales and spend money wisely we will win! So let’s go do it. Thank you!
