Walmart CEO Outlines Growth Strategy at Annual Meeting for the Investment Community

In opening remarks at the company’s 21^st Annual Meeting for the Investment Community, Wal-Mart Stores, Inc. (NYSE: WMT) President and CEO Doug McMillon outlined the company’s growth strategy, including plans to invest in new capabilities and to continue improving the customer experience at all Walmart stores. McMillon addressed how Walmart is well-positioned to meet the needs and preferences of an ever-evolving customer base.

Improving on four key customer dimensions – price, assortment, experience and access

McMillon said, “Customers make their shopping decisions based on four key dimensions – price assortment, experience and access. What we can offer them, and how we compete across those dimensions, is changing.

“Today, a customer has a desire for more items, more assortment, more choice than ever before,” he continued. “We have tens of millions of customers visiting us weekly online and through our mobile apps looking for information, product options and then buying merchandise from us in stores and online. We’re known for assortment and we will be in the future.”

Discussing price and experience, McMillon went on to say, “At Walmart, we serve value-conscious customers that come from all walks of life and all income levels. Price matters to our customers and it always will. As a company, being a low cost operator is in our DNA. This will never change and we will be the price leader, across a broad assortment, everywhere we operate. Experience is about customer service. From our associates in stores to our engineers and data scientists, we’ll invent new ways to surprise and delight customers.”

McMillon noted that the ways customers access Walmart is being redefined. “There is a growing consensus that the future of retail is not just in-store and not just online. The winners in retail will be those that can put them together. Frankly, we think we’re already doing the harder part. Locations matter because convenience matters. We have the stores, the associates, and the expertise in the physical world that others will need to build.”

McMillon continued, “To capture the upside of our strategic advantages, we need to develop a more seamless relationship with our customers. We won't just be a store on the street. We’ll support our customers’ lives, with them in the driver’s seat, to save them money and time. We’ll give customers the choices they want and need by integrating digital and physical retail. As we have many times before, we’ll exceed our customers’ expectations, and as a result, we will win the new era of retail.”

McMillon also spoke about the state of the company: “We have an important purpose – saving people money so they can live better. Our company is built on a foundation of strong values and integrity. Compliance continues to be a priority for us and a key to building trust with our customers and other stakeholders. However, we go beyond compliance to make a difference on sustainability and other big issues. Our stores are part of their communities. We fight hunger and provide disaster relief while creating opportunities for our associates. We are a company where you can go as far as your hard work will take you. Last year, more than 170,000 people got a promotion in our U.S. business.”

Enterprise-wide approach

McMillon said leadership fully recognizes how quickly customers’ expectations are changing, which requires Walmart to think and act differently.

“In the past, we’ve tended to roll up our plans from markets and segments, but this year we’ve started with an enterprise-wide approach. The internet, mobile, data and technology present opportunities across the world and across our businesses to better serve the changing customer,” he said. “We’ve taken a fresh look at where we want to play – what businesses, markets, formats, and services we need and how to win – what our customer value proposition should be.

“Our strategy will guide our approach to capital discipline,” McMillon continued. “We will change the mix of our capital spend through reductions in areas we have invested in historically to fund investments in new growth opportunities. Specifically, we will moderate the growth of investments in stores, and we will increase our investments in e-commerce.

Winning now

McMillon outlined what the company is doing to win now, noting that improving the company’s short-term performance is a priority across all of Walmart’s segments and markets.

“Our supercenters in the U.S. should be delivering positive comps consistently. Our combination of pricing, in stock, service levels and merchant skills will generate improved performance in our supercenters. Our Neighborhood Markets continue to be a bright spot in terms of comp sales.”

He said Sam’s Club is thinking creatively about the future of its business and has made some changes with membership rewards and credit offerings designed to strengthen its position and performance. In e-commerce, Walmart is continuing investment in its new technology platform, rolling it out to customers, continuing to build its next generation fulfillment network and expanding assortment.

McMillon highlighted three key points that will drive the business going forward:

• “First, we're going to position ourselves to do a better job serving customers. We can create a next generation customer proposition through the combination of what we do with price, assortment, access and experience. We will save them money and time.
• “Second, our priority is growth. Driving demand is the only sustainable way to deliver returns over time.
• “Finally, we’ll manage capital in a disciplined, thoughtful manner.”

About Walmart

Wal-Mart Stores, Inc. (NYSE: WMT) helps people around the world save money and live better – anytime and anywhere – in retail stores, online, and through their mobile devices. Each week, more than 250 million customers and members visit our 11,100 stores under 71 banners in 27 countries and e-commerce websites in 11 countries. With fiscal year 2014 sales of over $473 billion, Walmart employs approximately 2 million associates worldwide. Walmart continues to be a leader in sustainability, corporate philanthropy and employment opportunity. Additional information about Walmart can be found by visiting http://corporate.walmart.com on Facebook at http://facebook.com/walmart and on Twitter at http://twitter.com/walmart.

Cautionary Statement Regarding Forward Looking Statements

This release contains certain forward-looking statements that are intended to enjoy the safe harbor protections of the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements include statements regarding the expectations of Walmart’s management for Walmart, including:

• being the price leader across a broad assortment everywhere the company operates;
• changing the mix of the company’s spend through reductions in areas that the company has historically invested in so it can fund new growth opportunities;
• moderating the company’s growth of investments in stores;
• increasing its investments in e-commerce;
• the combination of pricing, in stock, service levels and merchants’ skills generating improved performance in the company’s supercenters in the U.S.; and
• managing the company’s capital in a disciplined, thoughtful matter.

Such forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and other factors, domestically and internationally, including:

• business trends in the specific markets in which Walmart operates;
• competitive initiatives of other retailers and other competitive pressures;
• the amount of inflation or deflation that occurs, both generally and in certain product categories;
• the cost of goods to Walmart and the other costs and expenses Walmart incurs relating to the sale of goods in its stores and clubs;
• consumer disposable income, needs, spending levels and spending patterns;
• alignment of Walmart’s stores with customer needs;
• customer acceptance of new initiatives and programs of the company, including those with respect to the supercenters operated by the company’s Walmart U.S. operating segment;
• consumer acceptance of and customer traffic on and use of Walmart’s various e-commerce websites;
• customer traffic and average ticket size in the supercenters operated by the Walmart U.S. operating segment;
• consumer acceptance of product offerings in the supercenters operated by the Walmart U.S. operating segment and the company’s e-commerce websites;
• consumer demand for certain merchandise;
• the availability to Walmart of the merchandise it needs to maintain desirable in stock levels in the supercenters operated by the Walmart U.S. operating segment;
• availability of persons with the necessary skills and abilities necessary to meet Walmart’s needs for managing and staffing the supercenters operated by the Walmart U.S. operating segment and the company’s e-commerce operations;
• availability to Walmart of attractive e-commerce investment opportunities;
• the unanticipated need to change Walmart’s objectives and plans; and
• other risks.

Walmart discusses certain of these matters more fully in its filings with the SEC, including its most recent Annual Report on Form 10-K (in which Walmart also discusses certain risk factors that may affect its operations and its results of operations), and the forward-looking statements in this release should be considered in conjunction with that Annual Report on Form 10-K, and together with all of Walmart’s other filings made with the SEC through the date of this release, including its Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. We urge you to consider all of these risks, uncertainties and other factors carefully in evaluating the forward-looking statements appearing in this release. Because of these risks, uncertainties, factors, changes in facts, assumptions not being realized or other circumstances, Walmart’s actual results may differ materially from anticipated results expressed or implied in these forward-looking statements. The forward-looking statements appearing in this release are made on and as of the date of this release, and Walmart undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances.