* WHAT: Wal-Mart annual meeting
* WHEN: June 5
* WHERE: University of Arkansas, Fayetteville, Arkansas
* Mike Duke oversees first annual meeting as CEO
* Wall St to listen for hints on sales momentum
SAN FRANCISCO June 2 (Reuters) - Wal-Mart Stores Inc (WMT.N) employees could be shouting the retailer's corporate cheer with renewed vigor at this year's annual meeting.
Thousands of employees from across the globe will descend upon Fayetteville, Arkansas for the retailer's June 5 annual meeting. After years of being hounded by union-backed critic groups, politicians and competitors, employees can revel in the fact that their employer has gotten its grove back and is gaining market share as the worldwide economic downturn drives frugal shoppers into its stores.
Investors are eager for more gains, and Wal-Mart, under newly installed CEO Mike Duke, is focused on delivering them by expanding its global reach and implementing "Project Impact" to improve sales in its U.S. stores.
"The fact is that all over the stores, there are new brands, there are new shoppers coming in to the stores, and they are buying 40 percent more than regular shoppers," said Gilford Securities analyst Bernard Sosnick.
But the question hounding the retailer amid its recent success is can these gains last when the economy improves and shoppers once again choose to shop elsewhere.
"The battle among retailers is to get footsteps in the store," Sosnick said. "I don't know what's going to happen three years after a recovery, but I know what's going to happen at its inception -- whoever's got the footsteps will benefit."
Wal-Mart was gaining momentum at its annual meeting last year as its strategy of emphasizing low prices and sprucing up its stores coincided with a recession that sent consumers into its aisles seeking discounts on food and medicine.
But the momentum accelerated. While other retailers have seen their sales plunge, Wal-Mart has posted positive U.S. same-store sales for the past 24 months, and its results have outpaced smaller rival Target Corp (TGT.N) for 17 consecutive months, according Thomson Reuters data.
Its stock rose 18 percent last year as investors sought a safe haven amid a financial crisis. But this year, its stock is down almost 10 percent as investors seek better returns in shares of more discretionary retailers, like Target.
"What we would watch for with the stock is whether or not some of these share gains that they've gotten principally because of the economic downturn and their better value proposition ... will stay," said Janna Sampson, co-chief investment officer at OakBrook Investments.
To try to keep the business of the new shoppers Wal-Mart has lured amid the recession, the company is reducing clutter and widening aisles in its stores while getting rid of slow moving merchandise, beefing up its selection of name brand products, and relaunching is Great Value private label.
It expects the effort will result in fewer markdowns, help improve its labor productivity, and make its stores a "friendlier" place to shop.
HINTS ON SALES OR GLOBAL EXPANSION
Sampson said she will be listening for any guidance Wal-Mart can provide as to how sales fared in May. While on June 4 many large U.S. retail chains will report their monthly results, Wal-Mart is ending its practice of reporting its U.S. sales on a monthly basis.
"I think if sales are good, they'll probably make some comments," Sampson said. "If they're soft, they may not because they may not want to put a down note on the annual meeting."
Goldman Sachs analyst Adrianne Shapira said in a research note that she will listen for updates on sales, its expenses and how inflation or deflation is affecting its results.
Last year, Wal-Mart's sales got a huge boost as food prices soared but that benefit has since moderated.
Wal-Mart is not just looking state-side to boost its business. Last year at its annual meeting, it said Southeast Asia was "an area that has potential", and it has been vocal about exploring opportunities in Russia. It has also recently acquired a majority stake in Chilean supermarket chain D&S.
Global expansion is an area Duke knows well, having headed Wal-Mart's international unit before becoming CEO on Feb 1.
While the annual meeting marks Duke's debut as the retailer's CEO, he is not the only executive in a new job. Doug McMillon, the former head of its Sam's Club warehouse division, is now leading Wal-Mart International. Wal-Mart hired former Michaels Stores Inc CEO Brian Cornell to head Sam's Club. (Reporting by Nicole Maestri)