WMT expenses (COGS and interest expense), grew faster than January quarter revenues. Fiscal 2024 full year outlook looks similar where expenses are growing as fast as or outpacing revenue growth. That’s what an economy in the midst of stagflation looks like – muted growth with costs (including debt expense), growing as fast or faster than revenue growth (read the release HERE).
- The best thing for Walmart and companies in general to do in slow growth, high price environments is to invest in differentiating technologies and processes in order to delight customers.
- Take software companies for example. Now is the time to invest in your most popular software products. Ensure that the user experience is optimized (minimal friction, maximum efficiency), in order to drive increased customer usage and customer satisfaction.
- Now is the time to work to boost customer renewal rates. It will be easier to do so if users are happy with all elements of your products and services.
Too frequently I come across software products that are clunky. It is all too obvious in those situations that the venture backer has forced the company to focus on revenue growth rather than product/service quality. Similarly, it is all too easy to identify public companies that focus on operating margins at the expense of product quality. An extreme example of this is the Norfolk Southern derailment where the quest for profits superseded operating safety.