Several dozen analysts had an hour with Wal-Mart executives following the retail titan’s annual shareholder meeting Friday (June 1) in Fayetteville.
While Wal-Mart executives eagerly reiterated the company’s strong financial status in cash flow, earnings, dividends and recent share valuation, analysts probed from more information into growth strategies and more insight into the alleged ethics violation.
One area tagged for emerging growth is the e-commerce unit headed up by Neil Ashe since January. Eduardo Castro-Wright, set to retire in July, took over the division nearly two years ago. He was noticeably absent from this week’s meetings and is the direct path of the bribery and cover-up allegations under investigation as he headed up the Wal-Mart de Mexico during the years in question.
Ashe said the e-commerce division has made substantial progress in the past six months in acquiring top talent near its Silicon Valley hub.
“We are building a better team in Silicon Valley that is innovating and using technology to our advantage going forward as we expand the breadth and width of our customer groups worldwide,” Ashe said.
He admitted there is still a lot of work to do, but he’s encouraged by the amount of applications launched and now used by the Wal-Mart customer base. He said roughly 53% of the Wal-Mart customers use smartphones.
Analysts wanted to know how Bentonville-based Wal-Mart manages its disgruntled associates on a variety of issues at any given time.
Duke quickly spoke up and said labor issues are always a constant undertone in the business.
“But listening to your critics is a good thing. We welcome the question and answer session with our shareholders in a public forum because he have an open door policy and our culture allows it,” he said.
Duke added that Wal-Mart is in the midst of near constant change that impact those associates with respect to store operations. He said the company has to serve both its associates and the customers while also trying to cut costs.
As in the shareholder meeting and media conference Thursday, executives could not escape questions pertaining to the alleged violations of the Federal Corrupt Practices Act.
Analysts wondered if this lengthy investigation would take executives’ time away from the everyday business at hand — trimming operating costs and passing those savings on to customers.
Duke said an independent audit committee has hired legal experts to investigate these allegations and management is not participating in that process.
At some point they will be questioned, but in the meantime Doug McMillon, CEO of international division, said he is working with Duke and company lawyers to make sure all efforts going forward are “to-the-letter” with respect to compliance.
McMillon said all the International presidents met this week and the company is using this opportunity to examine and improve every are of compliance.
Analysts still probed about potential damage to its reputation as the investigation lingers.
“We will be a better company because of this. It might be a short-term challenge but it also creates an opportunity for growth,” McMillon said.
Before the meeting adjourned, Duke invited the analysts back to Northwest Arkansas for the fall conference set for Oct. 9, at Crystal Bridges Museum of American Art.