Wal-Mart Stores Inc. continues to make changes to key management positions, including the announcement Friday of a new chief financial officer.
Brett Biggs will take over Jan. 1 for Charles Holley, who is retiring after more than 20 years with the company. Holley, 59, will retire Dec. 31, but will remain with Wal-Mart until Jan. 31 as part of the transition. Holley has been CFO since 2010 and his retirement comes about two months after Wal-Mart cut its earnings projection for the year during last quarter's earnings release.
Neither Holley nor Biggs, 47, were available for comment. Wal-Mart CEO Doug McMillon, in a news release announcing the appointment, described Biggs as "a strong leader whose broad experience uniquely qualifies him to lead our finance and strategy areas."
Biggs has worked since January 2014 as executive vice president and CFO for Wal-Mart International. He served as CFO of Wal-Mart U.S. from 2012-14 and also has experience with Sam's Club.
Holley joined Wal-Mart from Tandy Corp. in 1994. He has held a variety of roles in finance and investor relations.
"Charles has overseen our global finance and strategy areas during a period of immense company growth and change," McMillon said in the release. "He has been instrumental in shaping Walmart's strong financial position while driving significant shareholder returns."
Wal-Mart recently lowered earnings guidance for the year to between $4.40 and $4.70 per share. That's down from the original forecast of $4.70 to $5.05. The company also reported in August that it had discovered "immaterial errors" related to accounting of store leases. No significant impact was expected on the company's bottom line and it said it would make the necessary adjustment in the third quarter of 2016.
Edward Jones retail analyst Brian Yarbrough said the job change would allow Wal-Mart to get some "new blood" into the CFO role. Yarbrough said investors will be interested to see if Biggs considers reallocating capital from international operations, which have not performed well.
Wal-Mart's approach to small- and large-format stores and investment in e-commerce under Biggs will also be worth watching, Yarbrough said.
"It will be interesting to see what Brett's playbook is," Yarbrough said. "Wal-Mart's business model is changing. It used to be all about cutting costs, taking costs out of the stores and leveraging earnings on same-store sales of 1.5 percent. Now it's not just about cost-cutting, which is what they've done primarily since Charles has been there."
Biggs' compensation package has not yet been set by Wal-Mart but does include a two-year non-compete clause. Spokesman Randy Hargrove said the financial package will be established by the board's compensation committee "at a future date."
Holley, who earned $7.5 million last year, will receive installment payments in retirement totaling $1.9 million through January 2018 and 31,930 restricted shares of common stock scheduled to vest between January 24, 2017, and January 26, 2018. Holley forfeits 74,161 performance shares and he has agreed to a two-year non-compete clause.
Also on Friday the company announced that Steve Bratspies will take over as chief merchandising officer. Bratspies takes over the roll on Oct. 19 and will oversee merchandise for more than 4,500 stores in the U.S.
Bratspies, who will report to Wal-Mart U.S. CEO Greg Foran, joined the company in 2005. He previously served as executive vice president for food. Charles Redfield has been named executive vice president for food. Redfield has been serving as executive vice president of merchandising for Sam's Club, a role now held by John Furner.
Business on 10/10/2015