Walmart, a global retail giant

Walmart is one of the US’s most infamous brands, operating more than 10,500 stores as well as e-commerce websites in nineteen countries. The company employs 2.1 million associates worldwide, with approximately 1.6 million alone in the United States.

History of Walmart

Walmart was founded by Sam Walton, who opened the first Walmart store in Rogers, Arkansas, in 1962. By 1967, the Walton family had opened 24 stores, generating sales to the value of $12.7 million. Wal-Mart Stores, Inc. was officially incorporated in 1969, and by 1970, became a publicly traded company, with its first stock selling at $16.50 per share.

Walmart eventually listed on the New York Stock Exchange under the ticker symbol #WMT in 1972, by which time, it had 51 stores generating sales of $78 million. By 1980, Walmart had reached $1 billion in yearly sales across 276 stores. The company’s first Sam’s Club opened in 1983, and in 1991, it went global, opening a Sam’s Club in Mexico City, through a joint venture with Mexican retail company Cifra. In 1996, Walmart opened in China, and by 1997 celebrated its first $100 billion in sales.  In 1998, Walmart established presence in the United Kingdom when it acquired Asda.

In 2002, Walmart topped the Fortune 500 ranking of America’s largest companies. It also entered the Japanese market. By 2009, it entered Chile by acquiring a majority stake in D&S S.A. This was also a landmark year with the company achieving $400 billion in sales. Between 2010 and 2020, the company expanded further, opening in India, Columbia, and South Africa. In 2018, it also changed its legal name from Wal-Mart Stores, Inc. to Walmart Inc.

The 2020s have also been a busy period for Walmart thus far. In addition to an inaugural $2 billion green bond offering in 2021, the company also launched Walmart Data Ventures, and acquired telehealth provider MeMD. By 2022, Walmart InHome Delivery reached 30 million homes across the U.S.

In 2024, the company also announced a split of its outstanding shares of common stock at a ratio of 3:1. In its press release dated 30 January 2024, Walmart stated that, “The stock split is part of Walmart’s ongoing review of optimal trading and spread levels and its desire for its associates to feel that purchasing shares is easily within reach.” In addition, the release also shared that, “More than 400,000 associates participate in Walmart’s Associate Stock Purchase Plan today, which allows eligible associates to buy stock conveniently through payroll deductions and provides a 15% company match on the first $1,800 each year.” Interestingly, Walmart is also considered one of the 10 best dividend aristocrats according to Wall Street analysts.

Market capitalisation and shareholding

As of 30 August, Walmart has a market capitalisation of $611.95 billion, with revenue of $665.04 billion, and a net income of $15.55 billion. Notably, it has been reported that Walmart stock has reached an all-time high, coming in at a price level of $76.45. In fact, over the past year, Walmart has seen its stock value surge by 42.02%.

According to Yahoo Finance, “the company’s largest shareholder is Walton Enterprises, LLC, with ownership of 37%. With 7.9% and 5.1% of the shares outstanding respectively, Walton Family and The Vanguard Group, Inc. are the second and third largest shareholders.” Further, “The general public, who are usually individual investors, hold a 19% stake in Walmart, and Private Companies own 45% of the Walmart stock.”

Walmart reports 2^nd quarter results

On 15 August 2024, Walmart announced its second quarter results. The company reported consolidated revenue of $169.3 billion, marking a 4.8% increase, or 5.0% on a constant currency basis. The company’s gross margin rate improved by 43 basis points, driven primarily by strong performances in Walmart U.S. and Walmart International. Consolidated operating income saw an 8.5% rise, amounting to a $0.6 billion increase, with adjusted operating income up by 7.2%, supported by higher gross margins, increased membership income, and reduced eCommerce losses. Return on Assets (ROA) stood at 6.4% and Return on Investment (ROI) rose by 230 basis points to 15.1%.

Global eCommerce sales surged by 21%, bolstered by store-fulfilled pickup and delivery services, as well as growth in the marketplace. Additionally, Walmart’s global advertising business expanded by 26%, with Walmart Connect in the U.S. experiencing a 30% increase. Adjusted earnings per share (EPS) came in at $0.67, excluding a net loss of $0.11 on equity and other investments. The company’s global inventory decreased by 2.0%, with a 2.6% decline in Walmart U.S., while maintaining healthy in-stock levels. Furthermore, Bob Moritz, the retired chair of PwC, is set to join Walmart Inc.’s Board of Directors.

Sustainability goals

According to its ESG website, Walmart has “committed to science-based targets for emissions reduction, including achieving zero emissions in our operations by 2040 and engaging suppliers through our Project Gigaton initiative to reduce or avoid supply chain emissions by 1 billion metric tons by 2030.”

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Disclaimer: This information is not considered as investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced, or hyperlinked, in this communication.

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