Wal-Mart, Desperate for Growth, Picks Global Head as CEO
NEW YORK ( TheStreet) - Wal-Mart Stores
Shares were rising 0.5% on the announcement to $80.24.
The Bentonville, Ark.-based company said that McMillion, 47, will succeed Duke, 63, as president and CEO on Feb. 1, 2014. McMillon was also elected to the company's board of directors, effective immediately.
|Wal-Mart has named Doug McMillion, head of its international business, its new president and CEO.|
"This leadership change comes at a time of strength and growth at Walmart," said Rob Walton, chairman of Wal-Mart's board of directors. "The company has the right strategy to serve the changing customer around the world, and Doug has been actively involved in this process. The company has a strong management team to execute that strategy."
"Doug is uniquely positioned to lead our growing global company and to serve the changing customer, while remaining true to our culture and values. He has broad experience - with successful senior leadership roles in all of Walmart's business segments - and a deep understanding of the economic, social and technological trends shaping our world," Walton said. "A merchant at heart, Doug has both a long history with our company and a keen sense of where our customers globally are heading next. He has also shown strong leadership on environmental sustainability and a commitment to using Walmart's size and scale to make a difference in the lives of people, wherever they might be."
Wal-Mart has been specifically focused on growing its international presence, however it still remains small in comparison to its U.S. operations. Wal-Mart's international division represented 29% of the company's fiscal 2013 revenue compared to U.S. revenue of 71%.
As big a behemoth as Wal-Mart is, sales growth in the U.S. has been anemic, given how tied Wal-Mart is to the low-income consumer, who has been struggling this year. And growth internationally has also been slow going.
For it most recent fiscal quarter (technically its 2014 third quarter), Wal-Mart beat Wall Street estimates by a penny, reporting net income of $3.7 billion, or $1.14 a share, however total revenue rose just 1.7% to $115.7 billion, below analysts' expectations.
Net sales from the company's international division rose just 0.2% in the quarter to $33.1 billion. Total company sales, which includes the U.S. division, Sam's Club and online sales, rose 1.6% to $114.9 billion.
The company tempered fourth-quarter earnings expectations to a range of $1.50 to $1.60 a share, noting a 10 cents per share charge related to store closures in Brazil and China as well as ending its retail franchise agreement in India. Excluding the 10 cents in related charges, the company expects fourth-quarter earnings of $1.60 to $1.70 a share.