Can The Wal-Mart Family Afford Its CEO Anymore?

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Sam Walton left his children his share of the world’s largest retailer–Walmart (NYSE: WMT). The family still has the control block–1.68 billion shares or over 48% of outstanding. S Robson Walton is the company’s non-executive chairman. Governance experts may not want to admit it, but the Walton family can throw out CEO Michael Duke at any time. And, they might. Walmart’s share are down 5% over the last two years, while the DJIA is higher by 25%

Wal-Mart announced earnings and investor fears came true. International sales were robust. Sales from the firm’s flagship Walmart US operation are in trouble. The division is about two-thirds of Walmart’s total revenue.

Walmart reported EPS of $1.09 compared to $.97 in the most recently past quarter. Revenue rose from $103 billion to $108.6 billion. The company lifted its EPS forecast for the current fiscal to a range of $4.41 to $4.51.

All of the top line figures were good. Just below those, the US trouble still brews. Wal-Mart US revenue rose only .4% to $64.89 billion and comparable store sales were down .9% for the period. Sam’s Club results were a relief. It competes with masterful retailers like Costco (NASDAQ: COST). Sam’s revenue rose 9.5% to $13.65 billion. As expected, international sales were up 16.2% to $30.1 billion. But, there was trouble in the international segment. Operating income only improved 8.9% to $1.42 billion.

Wal-Mart said it did not expected US sales to post any progress short term. “For the 4-5-4 period from July 30 through October 28, 2011, Walmart U.S. expects comparable store sales to range from negative one percent to positive one percent,” the company reported.

“I’m encouraged by the sales improvement in our Walmart U.S. stores. Comp sales have increased sequentially month to month within the quarter. In fact, this was the best quarterly performance since the third quarter of fiscal 2010. We’re committed to deliver positive comp sales by widening the gap on price, and we have a specific plan to deliver EDLP to every customer,” CEO Duke summed up. He has only been CEO since 2009, and his time may come to an end if he forecast prove too optimistic.

Douglas A. McIntyre