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An employee stocks televisions at a Walmart store on Black Friday, Friday, November 24, 2023, in Secaucus, New Jersey, USA.
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CNN
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Walmart, the global giant retailer founded in Arkansas in 1962, is making major moves toward 2024. The company will invest in technology and inventory, move into new businesses and change the Walmart experience for many customers.
The company is scheduled to announce fourth-quarter results before the market opens on Tuesday. They will provide the first clues as to how and if this will work. Walmart CEO Doug McMillon is expected to provide further details about Walmart’s new strategy and initiatives.
Walmart is gradually increasing pay for at least some of its employees, while addressing criticism it has faced in the past over workers’ compensation.
Walmart’s biggest risk is increased investment, according to a recent note from Jefferies analysts, adding that it was “one of the most discussed topics in our conversations with investors.”
Walmart announced in October that it was midway through a $1 billion store remodeling program aimed at keeping customers engaged and shopping. The most notable changes include the pharmacy being moved to the front of the store and a new dedicated testing room. Household items are on display, and some of the aisles are wide.
Walmart did not respond to a request for comment.
The retail giant announced a 3-for-1 stock split that will take effect this week. A stock split means that one stock is split into multiple shares. Under Walmart’s announced plan, anyone who owns the stock by the close of business on February 22nd will receive two more shares. For every share owned by Walmart, a new Walmart share is issued.
When the market opens on February 26th, investors will own shares with the same value. That is, he will only be worth three times the number of shares he previously held, and one-third of the price of each share.
A stock split makes a company’s shares available to small individual investors. This helps the company gain liquidity, and the split can increase demand for the company’s shares. However, falling prices can also attract day traders and increase volatility.
Walmart said in a statement that it decided on the 3-for-1 split in part because employees “felt the purchase of stock was within easy reach.”
Walmart is raising the average salary for store managers from $117,000 to $128,000. The 9% increase, the first in 10 years, went into effect on February 1st.
The company said in a news release that it will also change its manager bonus program to focus on store profits in addition to sales. Store profits will play a larger role in bonus calculations. Managers who meet all targets can receive bonuses of up to 200% of their base salary, the retailer said.
The move comes as major retailers seek to attract and retain more workers, curb turnover and face a growing wave of labor organizing efforts. Labor groups have criticized Walmart over employee pay, shift hours and benefits.
Walmart made a big announcement about its new technology efforts at the Consumer Electronics Show in Las Vegas last month. Mr. McMillon gave the event’s keynote address.he showed A Jetsons-like experience with speedy drone deliveries and AI to predict online orders is on the horizon. It will be difficult to pull off.
It’s important to note that many of the announced projects are currently only being rolled out in select markets, but the company says it plans to roll them out this year.And some of these markets may not be affected It’s been on the balance sheet for some time.
The company announced that it is introducing artificial intelligence. In everything from the supply chain to existing apps and inHome services. Walmart announced a partnership with Microsoft to revolutionize its use of generative AI.
Walmart has made some changes to the in-store shopping experience.
In November, Walmart began setting store TVs to static mode, turning off sound systems and dimming lights for several hours each day.
Walmart said that during pilot testing during the back-to-school shopping period, these initiatives were found to be particularly beneficial for neurodiverse individuals with sensory disabilities (both customers and employees). The company previously held special morning shopping hours for elderly and vulnerable consumers during the pandemic.
Bart Flickinger, a retail expert and managing director of retail consultancy Strategic Resource Group, said this was a smart business strategy that served the needs of some customers.
“At a time when discounters are competing more aggressively for consumers’ dollars, Walmart is not only building relationships with its shoppers, but with these changes, it is encouraging more shoppers to shop,” Flickinger said. “This could lead to more people flocking to stores and continuing to shop for longer.”
Hoping to shake up pandemic-lockdown-era shopping habits, Walmart is pulling out Costco and introducing in-store samples to lure customers back into its stores. Walmart began holding demonstrations in 125 locations every weekend last June and said it hopes to expand to 1,000 locations by the end of the year. CNN has reached out to Walmart to find out how many stores are currently offering free samples.
Americans are suffering the steepest price increases in decades, and although inflation has begun to subside, consumers will continue to show resilience and control over how they spend, as they move toward more discretionary purchases. “It is likely to remain selective,” analysts at Telsey Group believe. .
Walmart tends to thrive during times of economic stress, and last year saw customers weary of inflation flock to Walmart. Avoided problems that would hurt Target, a top competitor. The company’s stock price (WMT) is hovering around $170 per share, trading at an all-time high.
Insider Intelligence analyst Blake Dorosh said Walmart may have to adapt to changing consumer habits, but its e-commerce and advertising businesses will continue to grow in 2024. .
Analysts surveyed by FactSet expect Walmart to report quarter-over-quarter increases in earnings per share, sales and profits on Tuesday.
CNN’s Pariha Kabirantu, Nathaniel Meyersohn, Elizabeth Buchwald and Alicia Wallace contributed to this report.
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