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Delivering results while ensuring we win, long term
This was a good year for Walmart as we continued to leverage our scale, unique assets and financial strength to enhance and build structural competitive advantages. The omnichannel investments made over the past several years are beginning to pay back as we see improvements in traffic, sales and productivity. We’re leveraging technology and improving processes to reduce friction for customers, who are increasingly shopping in an omni fashion. We continue to see proof points that give us the confidence that we are moving in the right direction, including improved customer satisfaction, lower employee turnover, strong comp sales and, importantly, market share gains in several key markets around the world. Our balanced approach to managing our business has put us in a position to deliver near-term results while positioning the business for the longer term. For example:
Our strategic financial priorities continue to be strong, efficient growth, consistent operating discipline and strategic capital allocation.
Strong, efficient growth — We’re seeing good results from prioritizing comp sales over new store openings, including the contribution from eCommerce. As we’ve elevated the customer experience in stores, we’ve seen strong momentum with four years of positive comp sales and traffic growth in Walmart U.S. Our stores will continue to be an important part of the future as we leverage physical assets to grow online grocery pickup and delivery and increasingly use them to fulfill eCommerce orders. In U.S. eCommerce, we continue to focus on improving the Customer Value Index, earning repeat visits and strengthening the assortment to increase sales in key areas like home and apparel.
Consistent operating discipline — We’re changing how we work, reenergizing the cost culture at Walmart and starting to see payback. The Walmart U.S. stores team has leveraged expenses for eight consecutive quarters even as we invested in wages, training, technology and process improvements. These tools helped us increase productivity, manage inventory, reduce costs and serve customers in new and exciting ways. In addition, as we focus on delivering the expense leverage targets we set, we’ve formed a cost transformation team to help the organization find and execute on initiatives that should bring significant cost savings, once fully implemented. We’re also testing robotics and automation for manual and repetitive tasks in stores and back office, expanding shared services, taking additional steps with working capital and evaluating opportunities in the procurement of Goods Not for Resale. We’re attacking costs in a more sustainable, strategic way.
Strategic capital allocation — Our allocation of capital is aligned with how we’ll serve customers in the future. Within the business, more capital is allocated to eCommerce and omnichannel initiatives, store remodels, customer initiatives, supply chain and technology, and less capital to new stores and clubs in the U.S.
In closing, our unique assets and financial strength position us well to make strategic long-term decisions that will ensure a bright future for the company. In the short term, we have the flexibility and capability to manage the business to meet the financial objectives we have set.
Thanks for your investment in Walmart.
Brett Biggs
Executive Vice President and Chief Financial Officer
Walmart Inc.
