Douglas McMillon, Walmart CEO since 2014
Photo Illustration by Hayley Warnham; Reference: Drew Angerer/Getty Images
Walmart is doing its best Amazon impression, and while it hasn’t generated Amazon-like stock returns of late, or even S&P 500 –like ones, it is planting seeds for long-term growth.
Douglas McMillon, CEO since 2014, bought e-commerce start-up Jet.com in 2016 and used its talent and know-how to jump-start Walmart’s e-commerce business before shutting down Jet last year. Over the past two years, Walmart’s U.S. e-commerce growth more than doubled.
Now, McMillon, 54, is surging capital spending to $14 billion this fiscal year from just over $10 billion last year. Stores will take a backseat; the bulk of the money will go toward e-commerce, technology, and supply-chain improvements.
The spending means that although sales growth is strong, earnings per share aren’t likely to grow much this year or next, according to Credit Suisse, which is bullish. Thereafter, expect an acceleration.
Meanwhile, Walmart, taking cues from two other Amazon successes, has quietly amassed an estimated eight million paid Walmart+ members, and is enjoying fast growth in WalmartConnect, which sells advertising to put in front of Walmart shoppers. Credit goes to McMillon for keeping Walmart not only relevant but also prosperous.
Write to Jack Hough at [email protected]
