How Good Are Walmart’s Debt Ratios? Very!!

Posted on February 29, 2016 by bermanevansretail
For a while now, Wal-Mart Stores Inc.’s financial performance across several measures, especially in the United States, has not been up to the expectations of stock analysts — or the retailer’s own senior executives.
Consider these recent headlines: 
BUT, let’s take a look at another important aspect of the retailer’s performance: its debt ratios. In a February 2016 article for Investopedia, Greg DePersio writes about “Analyzing Wal-Mart’s Debt Ratios in 2016.” Here a few highlights:
“By evaluating a company’s debt ratios, you can determine if it is using debt responsibly to grow its business, or if it is relying excessively on debt to meet core obligations and thus could have trouble looming in the near future. Certain debt ratios should be compared to certain benchmarks, while others are more subjective, meaning you should compare your target company’s figures to its industry peers and to the broader market.”
“For a large retailer such as Walmart, the most reliable debt ratios are the debt-to-equity ratio, that compares the percentage of a company’s assets financed by debt to the percentage financed by equity; the interest coverage ratio, which measures how many times a company can pay the interest on its outstanding debt with its current earnings; and the cash flow-to-debt ratio, which measures the percentage of a company’s total debt it can pay with its current cash flow.” 

“Walmart’s D/E ratio for the third quarter of 2015 was 0.56. This is a healthy figure that has remained quite steady over the past decade. Walmart’s interest coverage ratio for the 12-month period ending in October 2015 was [a very healthy] 9.79. Walmart’s cash flow-to-debt ratio as of October 2015 was 0.22, meaning its current cash flow could pay 22% of its debt. Many analysts consider a double-digit percentage to be a healthy sign.”

Click the image to read more on this topic from DePersio.


 

Posted in Part 1: Overview/Planning, Part 2: Ownership, Strategy Mix, Online, Nontraditional, Part 5: Managing a Retail Business, Part 8: Putting It All Together | Tagged , , , , , , , | 1 Comment

Retail Leader’s CEOs of the Year

Posted on February 26, 2016 by bermanevansretail
Retail Leader magazine is relatively new and has a special focus:
In today’s rapidly changing, intensely competitive, and economically challenging environment, the demand has never been greater for a new and concise media resource that delivers news, analysis, and information specific to the needs of top managers in the retail food and allied industries. The key information resources for the retail food industry, Stagnito Media and the Grocery Manufacturers Association, have combined their strength and market knowledge to create Retail Leader, the FIRST media product solely dedicated to the critical issues and topics confronting the corner office.”
In its most recent issue, Retail Leader honored two senior executives as “CEOs of the Year:
“Rodney McMullen, Kroger: Rodney McMullen, who became CEO of Kroger at the beginning of 2014, has kept America’s biggest pure grocer on its winning path. Kroger’s last quarterly report marked its 47th consecutive quarter of growth, a streak that began under McMullen’s predecessor, David Dillon. In that quarter, Kroger’s same-store sales (excluding fuel) rose 5.3 percent and net income rose 24.8 percent. The success was spread evenly across Kroger’s vast geographic and product expanse, with all regions and supermarket departments reporting same-store sales increases. Those increases reached double digits in natural foods—an area where Kroger has made an especially strong push.”
“Like many grocery company CEOs, McMullen started with his company in a humble position: as a stock boy, while he was attending the University of Kentucky. He worked many jobs at the store in Lexington; ironically, cashier was the only one the accounting major couldn’t master. After he earned both an undergraduate degree and a master’s degree from Kentucky in four years, he accepted Kroger’s invitation to join its accounting department, in its division office in Charlotte, N.C.”
“Christopher Gheysens, Wawa: Gheysens became CEO of the convenience-store chain, originally based in Pennsylvania and other Northeastern states, in 2012, right when Wawa was about to execute one of its most momentous decisions: a move to Florida. But as a 15-year Wawa veteran, Gheysens was in a position to contribute to the decision to leapfrog across the United States, which was several years in the making. This is why Gheysens is one of Retail Leader‘s co-CEOs of the Year for 2015.”
“Gheysens started with Wawa in 1997, rising to the position of president and chief financial officer before he was made CEO at the end of 2012. He oversaw one of the boldest moves in Wawa’s long history: The company leapfrogged down the U.S. East Coast, landing in Florida. Wawa’s first Florida store opened in July 2012 in Orlando; it now has some 85 stores in central Florida, for a total of about 850.”
Click the magazine cover to read more.


 

Posted in Career Useful Information, Careers in Retailing, Part 1: Overview/Planning, Part 2: Ownership, Strategy Mix, Online, Nontraditional, Part 8: Putting It All Together | Tagged , , , , , , , , , , | 1 Comment

A New Samsung Store: With NO Products to Sell

Posted on February 25, 2016 by bermanevansretail
Over the years, Nike, Apple, Walt Disney, and many other firms have opened their own retail stores. Although one of these firms’ goals is to present a showcase of their products and thereby enhance their images, they all have sold their products at these stores.
Now comes Samsung with a rather different concept: opening a large retail store but not selling its products there. The store is a very different type of showcase.
As Laura Heller reports for FierceRetail:
“Samsung just opened a large flagship store in New York’s Meatpacking district, but the 40,000-sq.-ft. facility sells no products. Rather, the location is meant to host events and create an immersive experience for customers. The store — called Samsung 837, after its address — sits across from the High Line near other cultural landmarks, including the Whitney Museum of American Art. There’s a three-story digital screen, a 90-seat theater, art gallery, kitchen, cafe, and multimedia studio, according to Fast Company. Instead of selling mobile devices or TVs, Samsung 837 will host events. The first will be an Academy Awards viewing party for Samsung Galaxy owners this Sunday.”
“Employees will be able to assist customers interested in buying a Samsung product, but the emphasis here is on the experience. Experience is playing an increasingly important role in retail. Stores are adding restaurants, cafes, and interactive experiences at a rapid rate. Samsung and AT&T last week debuted virtual reality displays at select AT&T stores.”
Click the image to read more.


 

Posted in Part 1: Overview/Planning, Part 2: Ownership, Strategy Mix, Online, Nontraditional, Part 3: Targeting Customers and Gathering Information, Part 4: Store Location Planning, Part 5: Managing a Retail Business, Part 6: Merchandise Management and Pricing, Part 7: Communicating with the Customer | Tagged , , , , , , | 1 Comment