Wal-Mart Curbs Inventory Growth
Wal-Mart Stores Inc. said inventories grew at a slower pace than sales in the fourth quarter, the result of efforts to control the company’s sprawling supply chain
ENLARGE
Wal-Mart Stores Inc. inventory growth slowed last quarter, as the company worked to put more items in front of customers. Photo: Reuters
The results, part of the retail giant’s fourth-quarter earnings report released Thursday, suggest progress in a major initiative Wal-Mart started last year to gain better control of a sprawling supply chain that’s been pressured by growing globalization and the rapid expansion of e-commerce sales.
Wal-Mart’s overall inventories grew 0.9% in the fourth quarter compared to the same period the year before, said Greg Foran, president and chief executive of Wal-Mart’s U.S. business. That was 25% of the rate of total sales growth, and inventory measured against comparable stores for the year before declined 2.9%, he said.
“New technologies is in our associates’ hands and better processes are creating efficiencies in the stores, driving higher-end stocks and a continuing decline in comp-store inventory,” Mr. Foran said in a conference call with analysts.
“Inventory will remain a key focus area for us in this new fiscal year,” he said.
Wal-Mart’s efforts to restrain inventory growth have been complicated by the surging e-commerce sales. The company, like other many retailers, is trying to balance its current use of distribution centers that serve stores with separate fulfillment centers tailored to the demands of e-commerce shoppers.
Wal-Mart got some help in reining back its logistics costs, with lower fuel prices reducing its overall transportation spending.
Write to Paul Page at paul.page@wsj.com
