With the company set to begin its first day on the Nasdaq, Walmart CEO (WMT) Doug McMillon recognized the changes in the retailing giant during his tenure and the decision to move to the tech-heavy Nasdaq.
“Walmart’s change a lot,” McMillon said during an interview on CNBC, and the move to the Nasdaq reflects the company’s pivot towards technology and the explosive growth in artificial intelligence.
“AI will invent new ways to shop,” McMillon added. “It will take out the friction from things shoppers don’t like and make it better in the ways they do like.”
The evolution to a more tech-based company was one of the reasons McMillon is handing over the reins to John Furner. Like McMillon, Furner began his Walmart (WMT) career as an hourly associate, moving through the company and most recently serving as CEO of Walmart U.S. since 2019, the company’s largest operating segment.
“John has a vision for the future,” said McMillon, acknowledging Furner’s experience working at the company’s digital, supply chain, and omnichannel units, making him uniquely qualified to lead Walmart (WMT) through its next phase as a more tech-focused company.
Regarding the Walmart (WMT) customer, as the largest retail chain in the world, McMillon has had a bird’s eye view of consumer behavior and economic trends that have dictated spending habits. Inflation remains sticky, he said, and grocery inflation remains a problem for most consumers, especially at the “bottom end” of the income spectrum who have had to deal with high inflation for several years. But Walmart (WMT) has seen an increase in higher income shoppers, a development that was evidenced in the company’s most recent quarterly results.
“As we look at our customers and members here in the U.S., they’re still spending with upper- and middle-income households driving our growth. We continue to benefit from higher income families choosing to shop with us more often,” McMillon said on the company’s Q3 earnings call and reiterated during his CNBC interview.
“The business is very consistent, and that’s our outlook into the fourth quarter. But when we look at low-income cohort versus middle versus higher income, we have seen some moderation in spending in the low-income cohort, and that’s consistent with things you’ve seen from a macro perspective,” he added.
Since taking over as CEO, Walmart’s shares have surged nearly 500%, more than doubling the S&P 500’s 242% gain.
Related tickers: Five Below (FIVE), Dollar General (DG), Dollar Tree (DLTR), Ollie’s Bargain Outlet (OLLI), Target (TGT), Amazon (AMZN), Costco (COST).