Growth potential intact at Walmart China despite exec departures
Shenzhen, China — Walmart will be looking to capitalize on compelling growth prospects in China under the leadership of new senior executives following the simultaneous departure of CFO Roland Lawrence and COO Rob Cissell.
Both men left the company to pursue other development opportunities, according to Walmart, leaving leadership of Chinese business in the hands of Walmart China president and CEO Ed Chan and Wal-Mart Stores Asia president and CEO Scott Price.
The timing of the resignations by Lawrence and Cissell is curious given Walmart’s growth intentions in China, which were outlined in a meeting with investors in Shenzhen, China in late March. Lawrence was prominently involved in presentations to investors while Cissell was conspicuously absent during the webcast portion of the event.
Walmart offered no comment on the departure of the executives and did not name their replacements.
China currently accounts for about $7.5 billion of Walmart’s total revenues of roughly $420 billion, but its business results in the market have been a bit bumpy of late. Walmart International president and CEO Doug McMillon during a pre-recorded message in which he discussed first quarter results, singled out China, along with Mexico and Chile, as having the highest same-store sales growth and new store activity. Same-store sales in China grew 4.5% during the first quarter, but that gain was entirely due to an 11% increase in transaction size as customer traffic declined 5.8%.
In addition, McMillon noted that operating income declined slightly to an undisclosed level as expenses increased primarily due to higher payroll and tax costs and inventories rose by 11.4%. During the past 12 months, Walmart has opened 49 new stores in China and ended the first quarter with a total of 333 Chinese units.