The descendants of Walmart founder Sam Walton saw their fortunes shrivel by $15 billion on Tuesday, after the world’s largest retailer reported slowing online sales growth and a drop in profits over the holidays.
Shares of Walmart plunged by 9% after the retailer said its online sales grew 23% in its latest quarter, which was about half the rate of the previous quarter. While online sales still make up a fraction of the retailer’s overall revenue, Walmart has been investing heavily in its e-commerce capabilities. The numbers were likely enough to spook investors about the retailer’s traction in the fight against Amazon.
Walmart also logged a smaller quarterly profit from a year ago, with net income declining 42% to $2.18 billion and missing analyst expectations.
Jim, Rob and Alice Walton, children of founder Sam Walton, watched their fortunes fall by $4.1 billion apiece on Tuesday. Their sister-in-law Christy Walton, wife of deceased brother John, saw $628 million knocked off her net worth. Her son Lukas, 31, who received a larger share of his father’s estate, lost $1.2 billion on paper.
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The Waltons are still among the wealthiest people on the planet thanks to the outsized success of the big box retailer. Jim is the world’s 15th richest person with a net worth of about $44.3 billion, immediately followed by brother Rob (No. 16 with $44.1 billion) and sister Alice (No. 17 with $44 billion)
Their sizeable stake in Walmart’s stock, which has climbed 36% in the last twelve months, makes up the lion’s share of their fortune. Altogether, Jim and the other heirs own just under half of Walmart’s stock. Only two family members – Rob and Jim’s son, Steuart – are currently involved with the company through their seats on the board.
Ann Walton Kroenke and sister Nancy Walton Laurie, who inherited a stake in Walmart from their father Bud Walton (brother to Sam), also lost a few hundred million dollars each on Tuesday.
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Walmart has been investing heavily in its online capabilities and workforce in recent years, with investors eager to see signs that its efforts are paying off. It has snapped up e-commerce companies like Jet, Moosejaw and ModCloth and been trying to leverage its massive physical footprint, such as offering discounts on items that shoppers can order online and pick up in the store and turning stores into e-commerce fulfillment centers.
The retail juggernaut has also been shelling out big money to attract and keep quality workers. In January, it said it would be raising the minimum wage to $11 for more than one million of its U.S. hourly workers as a result of sweeping new tax legislation. It has also doubled down on its training programs to help entry-level workers climb the ranks into management. – Written by ,
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