Wal-Mart Stores Inc., the world’s largest retailer, unexpectedly announced the retirement of Chief Executive Officer H. Lee Scott after almost nine years at the helm, replacing him with overseas chief Mike Duke.
Scott, 59, disclosed his departure as Wal-Mart was poised to be the top performer among the 30 stocks in the Dow Jones Industrial Average this year. The discount retailer more than doubled its annual revenue to $378.8 billion since Scott took over in January 2000.
“It’s a little surprising since he’s gotten things back on track,” said Walter Todd, who helps manage about $700 million at Greenwood Capital Associates. “Twelve or 18 months ago, he looked pretty dicey.” The Greenwood, South Carolina-based firm owned 114,860 Wal-Mart shares through September.
Scott will continue as chairman of the board’s executive committee. Duke, 58, is responsible for Wal-Mart’s international operations, which accounted for a quarter of revenue last year, after running the retailer’s logistics unit and U.S. operations.
The changes are effective Feb. 1, the Bentonville, Arkansas-based company said today in a statement.
Wal-Mart gained $1.43, or 2.8 percent, to $52.09 at 9:38 a.m. in New York Stock Exchange composite trading.
The stock rose 6.7 percent in this year through yesterday, adding to last year’s 2.9 percent increase. Since Scott took over, the retailer has lost 22 percent of its stock-market value.
Engineering Background
Duke, an industrial engineering graduate of Georgia Institute of Technology in Atlanta, helped Wal-Mart curb distribution and logistical costs as an executive in those units. He took charge of the overseas division in 2005, 10 years after joining Wal-Mart and after working for Federated Department Stores and May Department Stores.
“Duke seems to be the right pick,” Richard Hastings, a consumer strategist at Global Hunter Securities LLC of Newport, Beach, California. Internal promotions make sense, “especially those from the transport and logistics side of the business, the center of the company’s extraordinary power and competitive advantage.”
