Walmart sends in CEO as Massmart’s profit falls


Walmart sends in CEO as Massmart’s profit falls

Published Date: 2019-05-24 | Source: Stephen Gunnion | Author: Stephen Gunnion

Walmart sends in CEO as Massmart’s profit falls

The retailer's shares fell sharply after it warned that first-half headline earnings could be at least 50% weaker than a year ago.

Massmart has appointed Walmart heavyweight Mitchell Slape to replace Guy Harward as CEO as it prepares investors for another decline in earnings. Walmart is Massmart's controlling shareholder after buying a 51% stake for $2.5 billion in 2011.

Ahead of its annual general meeting yesterday, the retailer said Slape would replace Hayward once his work visa had been approved. Earlier this month, Hayward announced that he would step down later this year after 20 years at the group. Once Slape was in place, Massmart said Hayward would stay for a while to ensure an orderly handover and transition.

The 'career retailer' has been with Walmart since 1995 and has worked in the US, Japan, India and Mexico for the retail giant in a number of roles, including chief operating officer and senior vice president.

The announcement came as Massmart said first-half headline earnings could slide by at least 50%, while operating profit before restructure costs, non-trading items, foreign exchange movements and interest may be 60% down on last year. It said weakness in other African currencies was causing foreign exchange translation losses after it posted a R21 million translation gain last year.

Although sales for the first 20 weeks of its financial year were up 6.1% to R33.5 billion, it said costs were rising and it was selling fewer high-margin durable and home improvement products. Last year, the group reported a 32% decline in headline earnings last year, including restructuring costs, following a tough year for the retail sector and declining sales.

Its shares closed 13% down at R67.75 yesterday, valuing the group at R14.8 billion, or just over $1 billion.

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