Yahoo Finance Why Wall Street isn't sweating Walmart losing US CEO Greg Foran
Walmart’s shares climbed to new all-time highs on Friday, as investors appeared to shrug off the departure of U.S. chief Greg Foran, who is stepping down to take another job.
Late Thursday, the world’s largest retailer announced that Foran plans to resign, and will be replaced by and Sam’s Club CEO John Furner. Foran — a seasoned retail veteran — will join Air New Zealand Limited as CEO, and is expected to stay on through January 31.
The 45-year-old Furner, who’s spent 25 years at the company in key roles from chief merchandising and marketing officer for Walmart China to running the members-only warehouse Sam’s Club, will take the reins on November 1.
To be sure, investors didn’t appear to be phased by changing of the CEO guard. Shares of Walmart (WMT) held above $120 in midday dealings, setting a new intraday high.
In a note to clients, Bank of America (BofA) analysts expect Foran’s departure to be viewed as a “significant loss” for the U.S. business, especially because of his “integral role” in driving same-store sales growth and the launch and expansion of the online grocery pickup offering.
However, BofA also cited the retailer’s “impressive momentum” as reasons to remain bullish on Walmart, since Foran’s departure is unlikely to yield a change in the core strategy.
“We believe WMT's outlook should continue to be supported by its strong execution across both its Supercenters and digital business,” in addition to its booming grocery delivery business, the bank wrote.
Additionally, “the continued expansion of next-day delivery from Walmart.com (now covering 75% of the US population); and [its] aggressive rollout of ‘Delivery Unlimited,’ (a service offered to customers for $98/yr. or $12.95/month that is achieved with delivery partners)” bodes well for the future.
In his role, Foran, who has served as the U.S. CEO since 2014, developed a reputation for his unannounced store visits at the retailer’s 4,700 U.S. locations. Foran told Yahoo Finance in an interview in June, that aspect was a “critical part of the job.”
During Foran's tenure, he focused heavily on improving the quality of the fresh food department, since it's one of the first areas customers encounter, in addition to the overall in-store experience. During his visits, he would check virtually every detail, from store associates down to lighting and the smell of fresh produce.
Meanwhile, under Furner’s leadership, Sam’s Club has seen its comp-store sales improve and its membership-base grow. Bank of America called the incoming domestic chief a “seasoned executive.”
“John has done a fantastic job at Sam’s Club, and he will continue the momentum we have in Walmart U.S.,” CEO Doug McMillon said in a statement.
“John knows our business well, having held many different jobs in the company over more than 25 years, and he is helping transform it for the future. I look forward to seeing his impact for our customers and associates in Walmart U.S.” McMillon added.
And Sam’s Club has experienced a lot of the rapid technological transformations taking place within Walmart’s broader ecosystem.
"There always are changes. And, I think what I would say about change is it's easy to talk about, but it's hard to do because it affects the way people work, it affects the way people shop," Furner told Yahoo Finance in June.
Julia La Roche is a finance reporter at Yahoo Finance. Follow her on Twitter.
