Financial Outcomes Paper

1567 Words7 Pages
Week 2: Financial Outcomes Paper FIN/419 April 6, 2011 Week 2: Financial Outcomes Paper - Wal-Mart Financial Initiative Wal-Mart, a fortune 500 company, has thousands of stores in many countries around the world. Michael T. Duke, President and Chief Executive Officer of Wal-Mart Stores, Inc. expresses one financial priority of Wal-Mart as growth. Growth: We will continue to grow around the world. We have many opportunities to grow by opening new stores, entering new markets, making acquisitions, integrating online channels, and developing new, innovative formats to allow people to experience the Walmart brands (Wal-Mart, 2010). Herein, Wal-Mart’s growth initiative, three potential financial outcomes, including…show more content…
As demonstrated in Portland, Oregon, not every community desires a Wal-Mart. In his CEO’s letter to the shareholders, Michael Duke referred to opportunities in metropolitan markets as a major contributor to growth potential (Wal-Mart, 2010). However, sales growth has declined steadily since 2007. Wal-Mart’s 2010 annual report showed a 1% increase in sales growth over the prior year. With the steady decline in sales growth, Wal-Mart’s initiative to continue growing looks bleak; especially in hard economic times. Proof of the decline is seen in Wal-Mart’s 2011 first quarterly statement which posted a decline in “same-store sales” in the United States of 1.4% (Stock Blog Hub, 2010, para. 3). New growth is the key to the success of Wal-Mart’s growth initiative. Without new markets, and with a steady decline in sales of existing stores, Wal-Mart’s faces an inevitable decline – leading to a failed growth initiative. Financial Outcome: Increase in Sales Another potential outcome of the company’s growth is initiative is that the sales will increase. For the last five years Wal-Mart has experienced a year over year growth in its net sales. Sales increased 9%, 11%, 8%, 7% and 1% in the years 2006, 2007, 2008, 2009 and 2010 respectively (Wal-Mart, 2010). The company previously credited lower grocery prices during peak shopping times like the Fourth of July holiday for the sales increase. Management increased promotions and rollback prices on 16,000 items. In the fall the
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