Editor’s note: This is part 12 of a 13-part series about companies whose shares have amassed 100,000% returns for investors and the path taken to generate such impressive gains over the long term. See below for links to the other stocks in this series.

From its humble beginnings as a small discount store in Rogers, Arkansas, Walmart (WMT) has grown into a global retail powerhouse, transforming the way the world shops.

How did a single store become the largest retailer in the world, with over $600 billion in annual revenue? The answer lies in Walmart’s unique approach to expansion and its relentless focus on cost control.

By strategically opening thousands of stores and mastering supply chain management, Walmart has consistently outperformed its competitors and reshaped the retail landscape.

To truly understand Walmart’s success, we must examine these key areas: its aggressive store expansion and improvements in gross margins through cost-effective procurement. Together, these factors reveal the secrets behind Walmart’s sustained growth and its ability to dominate the global market.

A major driver of Walmart’s growth has been its aggressive expansion strategy. In 2000, Walmart operated 3,662 stores worldwide including Supercenters, discount stores, and Sam’s Clubs.

By 2023, the number of stores had grown to 10,130. This rapid expansion allowed Walmart to capture a broad customer base across both urban and rural areas.

Looking at sales per store over time provides insights into Walmart’s growth strategy.

In 2000, Walmart reported a revenue of approximately $167 billion. Dividing this by its 3,662 stores results in an average sales per store of around $45.6 million.

By 2023, Walmart’s revenue had surged to nearly $611 billion. With over 10,623 stores, the average sales per store had risen to approximately $57.5 million. Over time, Walmart’s methods allowed it to increase the productivity of each store by 26%.

Improving and maintaining gross margins has also been crucial to Walmart’s ability to offer low prices and sustain profitability.

Walmart’s massive scale allows it to negotiate better prices with suppliers, driving down the cost of goods sold and enhancing/maintaining gross margins. For a decade, Walmart has been able to keep its gross margin in the range of 24% to 26%.

You could almost say that Walmart is impervious to inflation, and that’s one reason shoppers come back to Walmart again and again.

Amazingly, during the peak inflation of 2022, when the rate in the U.S. peaked at 9.1%, Walmart was able to maintain its gross margin at 24.1% that year, only 4% lower than the previous year’s gross margin of 25.1%.

And when inflation abated in 2023, Walmart’s gross margin was able to bounce back to 26.2%.

The company has leveraged its buying power to source goods at lower prices and invested in technology to enhance inventory management. These efforts have allowed Walmart to reduce the cost of goods sold and maintain its “Everyday Low Price” strategy, attracting price-sensitive customers and driving sales volume.

Despite economic fluctuations and changing market conditions, Walmart’s ability to adapt and leverage its massive scale has enabled it to thrive.

As the largest retailer in the world, Walmart continues to shape the retail industry, demonstrating that a well-executed growth strategy and a relentless focus on cost control works.

The formula is still valid, and Walmart likely has more growth to deliver to shareholders.

Note: This content first appeared in Louis Navellier’s latest book, The Sacred Truths of Investing: Finding Growth Stocks that Will Make You Rich, which was published by John Wiley & Sons, Inc.

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