WALMART INC.

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Wal-Mart replaces head of struggling U.S. business

07/24/2014 | 12:48pm EDT
Chief Executive Officer of Wal-Mart China Greg Foran attends a news conference in Beijing

(Reuters) - Wal-Mart Stores Inc (>> Wal-Mart Stores, Inc.) replaced its U.S. head Bill Simon with Asia chief Greg Foran as it seeks to restore the fortunes of its largest business after a year of sluggish sales.

(Reuters) - Wal-Mart Stores Inc (>> Wal-Mart Stores, Inc.) replaced its U.S. head Bill Simon with Asia chief Greg Foran as it seeks to restore the fortunes of its largest business after a year of sluggish sales.

A 35-year retail veteran who started out as a teenage part-timer stocking supermarket shelves, Foran is being moved to the United States just two months after becoming the head of Wal-Mart's Asia business.

Wal-Mart said on Thursday that Simon - who joined the retailer in 2006 and has headed its U.S. business since 2010 - would stay on as a consultant for six months and the parting was "amicable".

Foran, 53, joins Wal-Mart's U.S. business at a time the company is struggling to retain its traditional low-income customers. The U.S. business accounts for about 60 percent of the company's total revenue.

In the first quarter, Wal-Mart posted its weakest sales growth in five years and its full-year profit forecast disappointed investors.

Edward Jones analyst Brian Yarbrough said Wal-Mart Chief Executive Doug McMillon wanted new blood to lead the U.S. business and Simon was unhappy after missing out on the top job last year.

"Walmart U.S. has not been knocking the cover off the ball," Yarbrough said. "They have lagged. So it looks like Doug was looking at a fresh perspective and Simon wanted to leave."

Wal-Mart's shares fell 1 percent to $76.25 on the New York Stock Exchange.

Foran, a New Zealander, joined Wal-Mart from Australian retailer Woolworths Ltd (>> Woolworths Limited), where he headed the supermarket business.

He had been widely tipped to head Woolworths, but quit after he lost out on the top job. (http://reut.rs/WFzyPc)

Foran held several senior roles at Woolworths, including general manager of the discount department store division Big W and consumer electronics retailer Dick Smith.

Foran joined Wal-Mart in 2011 and became the chief executive of Walmart China within six months. He starts his new job on Aug. 9.

His experience includes merchandising and marketing - skills Wal-Mart hopes can ease criticism that its stores run out of regular items.

In a Consumer Reports survey in March, Wal-Mart received the lowest rating among supermarkets, with shoppers also complaining about confusing pricing and store layouts.

"Greg Foran is well respected and brings with him a strong background in both grocery and general merchandise," said Sandra Skrovan from retail analytics firm Planet Retail.

Foran will be paid an annual salary of around $950,000, Wal-Mart said in a filing. He is also in line for stock options of up to $4.9 million early next year.

Simon will receive a severance package of about $4.5 million, payable through 2016. The deal with Simon prohibits him from working at a rival or poaching Wal-Mart's employees for two years.

Wal-Mart's stock has fallen 1.6 percent in the year to Wednesday's close, while the Dow Jones Industrial Average <.DJI> has risen around 10 percent.

(Editing by Kirti Pandey)

By Siddharth Cavale

Stocks treated in this article : Wal-Mart Stores, Inc., Woolworths Limited

© Reuters 2014
Stocks mentioned in the article
ChangeLast1st jan.
ALCON INC. -0.99% 69.8 Delayed Quote.-13.55%
DJ INDUSTRIAL 1.61% 32637.19 Real-time Quote.-12.14%
NASDAQ 100 2.79% 12276.79 Real-time Quote.-26.81%
NASDAQ COMP. 2.68% 11740.65 Real-time Quote.-26.91%
S&P 500 1.99% 4057.84 Real-time Quote.-16.52%
WALMART INC. 2.13% 126 Delayed Quote.-14.21%
WOOLWORTHS GROUP LIMITED -2.57% 34.17 Delayed Quote.-7.73%
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Analyst Recommendations on WALMART INC.
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Financials (USD)
Sales 2023 593 B - -
Net income 2023 16 007 M - -
Net Debt 2023 40 466 M - -
P/E ratio 2023 21,1x
Yield 2023 1,83%
Capitalization 340 B 340 B -
EV / Sales 2023 0,64x
EV / Sales 2024 0,61x
Nbr of Employees 2 300 000
Free-Float 52,3%
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Number of Analysts 38
Last Close Price 123,37 $
Average target price 155,30 $
Spread / Average Target 25,9%
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Managers and Directors
C. Douglas McMillon President, Chief Executive Officer & Director
Brett M. Biggs Executive VP & CFO-Walmart International
Gregory B. Penner Non-Executive Chairman
Clay Johnson Enterprise Chief Information Officer & EVP
Jerry R. Geisler Chief Information Security Officer & Senior VP
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