Walmart 2000 Annual Report Download - page 4

Q
Wal-Mart is the largest retailer
in the world, with sales of $165
billion last year. With that in mind,
how will you continue to grow
sales and profits into the future?
Where will the growth come from?
WALTON: Over the next five years,
60 to 70 percent of our growth in sales
and earnings will come from the
domestic markets with our Wal-Mart
stores and Supercenters, and another
10–15 percent from SAM’S Club and
McLane. The remaining 20 percent of
the growth will come from our
planned growth in the international
markets. This means we have a great
opportunity to drive our growth doing
the things that we do best today in the
U.S. market.
Q
Wal-Mart stock has been down
since the beginning of the
calendar year. Considering the
tremendous growth in sales and
earnings last year, what has creat-
ed this pressure on the stock?
SODERQUIST: Our sales and earn-
ings were up significantly this last
year, but the market reacts to many
macro-economic pressures, and our
stock, along with that of other retailers
and fellow members in the “Dow 30,”
is susceptible to those movements.
Fortunately, if we continue to perform,
we believe that the stock price ulti-
mately will track our performance.
Over the last three calendar years,
Wal-Mart stock has appreciated 70,
106 and then 73 percent. This was
clearly an exceptional period of stock
growth and we commented in each of
those years that it was probably not
sustainable. However, our objective is
to deliver consistent earnings growth
that allows the value of our Company
to continue to grow over time.
Q
David, you recently announced
you were stepping down as CEO
to become Chairman of the
Executive Committee. After such
a great year, and with great
prospects for the future, why
would you choose to make this
move now?
GLASS: First, let me remind everyone
that I’m not going anywhere; I’ll be
around to give everyone more help
than they probably would like!
Seriously, one of the greatest responsi-
bilities of leadership is to ensure the
ongoing success of an organization,
and I believe that my primary duty to
my fellow Associates and shareholders
is to place this Company’s future in the
hands of the best possible leaders. In
any relay race there are times when
teammates run in tandem, and some-
where in that period the baton is
passed. We have been working togeth-
er for some time and this point
appeared right to me to hand the
baton to the next group of leaders and
then run beside them for a while.
Q
What is Lee Scott’s background
and why does the Company
believe that he is the one to lead
the Company into this new
millennium?
GLASS: I first met Lee over 20 years
ago when he was working for a truck-
ing firm that serviced Wal-Mart, and
he impressed me so much that we
hired him to run our truck fleet. Lee
established himself as such a tremen-
dous leader and innovator in our
logistics areas that we asked him to
lead our merchandising efforts for the
entire buying organization. Over the
last four years he has served as
President and CEO of the Wal-Mart
Division, and most recently, as COO
and Vice Chairman of the Company,
where he led all of our retail
operations worldwide. The one
characteristic that may best equip
him as a leader is his willingness and
desire to surround himself with pas-
sionate and talented people that
complement each others’ skills.
Q
The International Division is
continuing to be a growing
piece of the business. What are
the prospects for that division,
and where are the challenges of
the future?
SCOTT: The most pleasing news is
that the Wal-Mart culture transcends
international boundaries. Customers
all over the world want and appreciate
value, service and broad merchandise
assortments. In less than 10 years, the
International Division has grown to
over 1,000 stores and should exceed
$30 billion in sales this year. The excit-
ing thing about this division is that it is
still in its infancy. We are serving cus-
tomers in nine markets, but there is so
much more opportunity worldwide. In
fiscal year 2000, we were very pleased
with the acquisition of ASDA, which
gave us a major presence in the U.K.;
the level of operating performance we
experienced in Canada; and also
2
DON SODERQUIST
Wal-Mart
Management
Answers
the Most
Frequently
Asked
Shareholder
Questions
Wal-Mart
Management
Answers
the Most
Frequently
Asked
Shareholder
Questions