Walmart’s annual shareholder meeting is Friday, and sure to be discussed will be the news that earnings for the last quarter weren’t very good. Net sales for the first quarter of fiscal 2012, which ended April 30, were $103.4 billion, an increase of 4.4% from $99 billion in the same quarter a year ago. Income from continuing operations attributable to Walmart (WMT) for the quarter was $3.4 billion, up 3.8% from the first quarter last year.
Worse than the overall modest gains for the world’s largest retailer is the fact that same-store sales for the flagship U.S. operations were down 1.1%
Walmart has tried several initiatives to turn around its domestic operations. All have failed. The latest plan is to open smaller Walmart Express outlets. These locations will be about 10% the size of normal Walmart stores, and will stock primarily food and general merchandise. At the same time, Walmart’s Sam’s Club unit will begin to offer more groceries.
If this new plan doesn’t work, pressure will increase for the board to consider removing CEO Michael Duke (pictured). The success of his tenure has been questioned before, but the board’s role is not often discussed.
Walmart’s board is made up of 15 people, but only two really count: Chairman S. Robson Walton who has been on the board since 1978, and Jim Walton, who has been a member since 2005. The Walton family holds more than 1.6 billion shares of Walmart, or 48.3% of the total. During the last two years, the stock has significantly underperformed that of rival Target (TGT). That puts pressure on the Waltons to act on the behalf of shareholders, and also on behalf or themselves.
Walmart’s board didn’t have any trouble ousting former CEO Lee Scott, who served from 2000 to 2009. His record on labor and the environment was criticized for years. The Waltons may decide that it is time to find a replacement for Duke to see if a new candidate can turn U.S. retail operations around.