Wal-Mart names new CEO
The world’s largest retailer has promoted the head of its international business division to CEO, according to an official company statement. Dough McMillon, who has been with the company since 1984, will replace Mike Duke as the next head of Wal-Mart Stores Inc (NYSE:WMT) .
McMillon will become Wal-Mart’s fourth CEO since 1970, when the company first went public. He will be tasked with reviving the company’s US operations, which has struggled to maintain its consumer base amid the economic uncertainty. Low-income shoppers have struggled with inconsistent employment and higher taxes, trends which have hurt the retailer’s bottom line. The company’s international expansion has also run into problems, with accusations of bribery and corruption coming from Mexico.
McMillion’s experience in the international division made him a leading candidate, according to analysts. Bill Simon, head of Wal-Mart’s US operations, was another leading candidate.
“McMillon’s tenure at all three division – US, international and Sam’s Club – was a key to his hiring because in a sense it was training for the CEO job,” said David Schick of Stifel Financial Corp. McMillon served as President and CEO of Wal-Mart’s Sam’s Club warehouse division between 2006 and 2009.
Wal-Mart cut its annual profit forecast for the second time this year, as the retailer continues to struggle with declining US sales. US same-store sales have dropped for three consecutive quarters, as dollar stores and online retailers continue to lure away customers.
The company’s revenue increase 1.6 percent to $115.69 billion, according to its latest earnings scorecard. International sales increased 4.1 percent to $34.4 billion. While third quarter profits from continuing operations rose more than expected, Wal-Mart lowered its full-year EPS forecast from $5.10-$5.30 to $5.11-$5.21.
McMillon takes over as CEO on February 1, 2014. Mike Duke, who is expected to retire, will continue to serve as chairman of the board’s executive committee.
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