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    Wal-Mart Presents a Scaled-back Growth Strategy to Analysts

    On day two of its annual analyst and investor meeting, the giant retailer said it will rein in capital expenditures.

    New stores are still a driver for Wal-Mart Stores Inc., but not like in the good old days for the world's largest retailer, which said at its annual analyst and investor meeting in Bentonville, Ark. over the last two days that it will focus on capital efficiency and improved return on investment.

    Wal-Mart said it expects to open 166 supercenters in the United States in fiscal year 2009, including expansions and relocations of discount stores, which compares to 191 supercenters added in fiscal year 2008. Wal-Mart further plans to open only between 125 and 140 supercenters in fiscal year 2010, also including expansions and relocations.

    Higher levels of free cash flow, which the retailer defines as net cash provided by operating activities; and lower capital expenditure will enable the company to continue investments for future returns and growth, execs said.

    Total capital spending for the fiscal year 2009, ending Jan. 31, is projected to be approximately $13 billion, down from approximately $14.9 billion last year. Worldwide capital spending is projected to be $13 to $14.5 billion during the fiscal year ending in 2010.

    "Supercenters continue to have the highest rate of return of our U.S. formats," Tom Schoewe, evp and cfo said.

    Sam's Club plans to add 21 new, expanded and relocated clubs in fiscal year 2009 and 15 to 20 clubs in fiscal year 2010. Sam's Club added 25 new clubs in fiscal year 2008.
    In the fiscal year ending Jan. 31. 2009, Wal-Mart expects to add 42 to 43 million square feet globally, compared to about 46 million square feet added in the prior year. During the fiscal year ending in 2010, the company expects to increase global square footage between 34 and 36 million feet.

    "We are operating from a position of strength, with the strategy of moderating store growth and increasing operating cash flow," Schoewe said.

    Wal-Mart International remains committed to emerging markets. New stores will provide 17 to 18 million additional square feet in fiscal year 2009, and 19 to 20 million more square feet in fiscal year 2010. Schoewe said international growth would cover a wide range of formats.

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