Sam Walton was the founder of this large retail outlet opened first in 1962 in Rogers, Arkansas. Sam was born in 1918 in Kingfisher, Oklahoma. After being in the military for three years, he moved with his wife to Iowa and then to Arkansas. He gained some retail experience and eventually operated his own variety store. They then moved to a difference city in Arkansas and opened a dime store. Because of his success with that store, he decided to open the first Walmart in Rogers when he was 44 years-old.
Sam’s success in the company was attributed to a lot of things. Sam wanted to bring great opportunity and value to his customers through lower prices and better service. Walmart did better than Sam had imagined, and the company went public in 1970 with the first stock sold at $16.50 per share. He shared his visions for the company with all of his associates in order to make Walmart great. He improved inventory levels as well as constantly stacking shelves and keeping track of how slow or fast the goods were moving. He offered wholesale goods at discounted prices. He also opened new store formats like Sam’s Club and the Walmart Supercenter. He even expanded outside of the country by locating a Walmart in Mexico. In 1992 he was awarded the Presidential Medal of Freedom award by President H. W. Bush. During his acceptance speech he stated. “If we work together, we’ll lower the cost of living for everyone…we’ll give the world an opportunity to see what it’s like to save and have a better life” (“Sam Walton”, 2012).
Recent Operating Results
Walmart stores operating results have improved in the last five years. According to their 2012 Annual Report (2012), net sales have steadily increased each year from $373,821,000 in 2008 to $418,952,000 in 2011. Walmart’s operating income has also seen an increase each year for the past five years going from $21,916,000 in 2008 to $25,542,000 in 2011. Current Operating Results
The year 2012 has been the best year yet for Walmart in terms of net sales. Their total net sales is up to $443,854,000 a 5.9% increase from 2011. The increase in net sales in 2012 came from a combination of growth in retail square feet, increase in comparable sales, and currency translation benefits. Their operating income is also the highest this year at $26,558,000. Although it is the highest, it only increased 4.0% from 2011 compared to the percent change of 6.4% from 2010 to 2011. The lower percentage change is due to strategic investments for products sold in retail operations. Economic Forces
There are many economic factors that could impact Walmart’s financial performance. According to their Form 10-K report:
In the United States, higher interest rates, higher fuel and other energy costs, weakness in the housing market, inflation, deflation, higher levels of unemployment, decreases in consumer disposable income, unavailability of consumer credit, higher consumer debt levels, fluctuations in currency exchange rates, higher tax rates and other changes in tax laws, other regulatory changes, overall economic slowdown and other economic factors could adversely affect consumer demand for the products and services we sell through our Walmart U.S. segment and Sam’s Club segment, change the mix of products we sell to one with a lower average gross margin, cause a slowdown in discretionary purchases of goods and result in slower inventory turnover and greater markdowns on inventory. (Wal-Mart Stores, Inc., 2011)
Many of these economic factors in other countries can also affect Walmart’s consumer demand for their merchandise in those countries, especially those with an average income that is much lower than in the United States. All of these factors can affect the company’s cost of sales, gross margin, inventory turnover, markdowns, and operating results. Social Forces
Not only do economic forces affect Walmart’s success, but social forces do as well. Social pressure plays a big role...