Walmart talks AI and international growth at annual meeting
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Walmart (NYSE:WMT) held its annual meeting in Fayetteville, Arkansas on Friday with over 6K employees in attendance.
Shareholders voted in favor of all the company-led proposals, including the election of 11 directors for one-year terms on the board. Meanwhile, proposals submitted by shareholders were all voted down, including one of revealing the retail giant's exposure to China and one on conducting an independent review of safety practices related to gun violence.
At a press conference, Walmart (WMT) CEO Doug McMillon said inflation is still lingering for the company, especially in the grocery category. In terms of strategy, McMillon noted Walmart (WMT) will use value deals during the back-to-school season to attract online and brick-and-mortar shoppers. In a positive financial update, McMillon said Walmart (WMT) expects profit to inflect next year.
Walmart (WMT) execs also made a point to focus on the international business and reiterated a target to double the amount of gross merchandise volume it sells in foreign markets to $200B in five years. Walmart International is rebuilding it divested after its businesses in Brazil, Argentina, Japan and the United Kingdom. Stores in Mexico, Central America, and Africa have been providing strong results for Walmart (WMT).
Naturally, AI came up during the Walmart (WMT) presser. Execs were quick to point out that the WMT system has been using machine learning and AI for years, but see generative AI as a leap forward.
Walmart Chief Technology Officer Suresh Kumar said the company is very excited about the generative AI capabilities in terms of upside for customer experience. "So, we think that these capabilities are going to really accelerate the customer experience in a very meaningful way," he noted. The other major benefit from generative AI is expected to be internally at Walmart (WMT) in terms of how associates work, as well as how management runs the business and get insights from data. "All of these are areas where I think as generative AI becomes more and more mature, we will start seeing the impact of that," he stated.
On Wall Street, Walmart (WMT) is still a favorite with 31 Strong Buy/Buy ratings stacking up against 10 Hold-equivalent ratings and no Sell-equivalent ratings. Bank of America summed up the bull thesis recently with its contention WMT's omni-channel transformation in the U.S. will continue to gain momentum and support more sustainable and predictable positive same-store sales and traffic at U.S. Supercenters and U.S. e-commerce.
Walmart is up 5% year-to-date compared to Costco (COST) +12%, Dollar Tree (DLTR) -6%, Target (TGT) -11%, and Dollar General (DG) -32%. The S&P Retail ETF (XRT) is down around 1% for the year.