WMT) announced Doug McMillon will replace current CEO Mike Duke effective February 1st. McMillon, 47, currently serves as CEO of Walmart International, the role Duke occupied before he stepped into the top job in 2009. Though the announcement of his resignation was a surprise, Duke had come under fire in recent weeks after Walmart reported disappointing earnings and sales results for the latest quarter. It was the second consecutive quarter Walmart disappointed Wall Street.
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Walmart U.S. CEO Bill Simon, 53, will presumably remain in his current role.
Walmart’s international segment has been responsible for most of what little growth in earnings and revenue the company has been able to generate of late. Accounting for slightly under ⅓ of total corporate sales, Walmart International turned in sales growth of 4.1% on a constant currency basis, and grew operating income by 8%. Domestic comparable store sales declined in the 3rd quarter and are expected to be flat during current period.
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Walmart International may be a growth driver but it’s not without headaches. The U.S. juggernaut has struggled to reconcile its traditionally aggressive growth strategies with local customs in foreign markets. In 2012 the company was caught up in a Mexican bribery scandal. Walmart is continuously under attack for foreign sourcing practices, most recently in Bangladesh.
McMillon will be forced to deal with Walmart’s status as symbol of all the economic ills facing America. With over 1.4 million employees, Walmart is under constant fire for paying workers low wages and general unfair labor practices. These accusations tend to overshadow more progressive facts such as the company deciding to offer full benefits to same sex partners in all 50 states earlier this year.
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Duke will stay on as an advisor to McMillon for a year.
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