As the company entered its Investment Community Meeting, Walmart CEO Doug McMillion said the company has a “winning formula” that should keep it going strong in 2025 while such factors as tariffs have affected its earnings outlook in the first quarter.
Although the company expects first-quarter sales growth to be in line with its 3% to 4% outlook, and annual sales and operating income growth guidance remains unchanged, Walmart noted the range of outcomes for operating income growth in the opening frame has widened because of a less-favorable category mix, higher casualty claims expense and the desire to maintain flexibility to invest in price as tariffs are implemented.
Still, Walmart emphasized the flexibility and strength of the company’s people-led, tech-powered omnichannel strategy, and why the company is uniquely positioned to sustain attractive growth and create shareholder returns. Walmart highlighted critical components of its strategy including driving growth by improving customer and member experiences. Walmart will advance by leaning on its everyday low price position and its growing e-commerce assortment, which it will make more attractive with faster delivery and boosting curbside pickup to ensure customers have a positive interaction. However, Walmart continues encouraging in-store shopping as important to maintaining consumer engagement
Walmart added its evolving business model is set to deliver strong returns by better serving customers in general and its loyalty program members in particular. As part of the business model, Walmart is reshaping its profit mix to invest in lower prices for customers, associate wages and experience-enhancing technologies, while pushing for profit growth faster than sales gains, strengthening cash flows and delivering higher capital returns for shareholders.
Walmart U.S. recently added same-day pharmacy delivery, and Sam’s Club launched a new shipping offer, including free same or next-day delivery. In addition, Walmart deployed Wally, a new AI agent developed for merchants to help them get to the root cause of such issues as out of stocks and overstocks with more accuracy and speed.
In discussing key points of discussion he would raise with the investment community, McMillon said, “The combination of a purpose-driven, people-centric culture with world-class technology is the winning formula. Our customers want four things: everyday low prices, a broad assortment, a convenient and enjoyable shopping experience and to do business with a company they trust. We’re changing to serve them even better.”
John David Rainey, Walmart executive vice president and CFO, added, “History tells us that when we lean into these periods of uncertainty, Walmart emerges on the other side with greater share and a stronger business. We have fundamentally changed our business model through years of thoughtful, strategic investments and now have a financial model that yields much higher returns.”
