UPDATE 2-Wal-Mart touts changes, vision at annual meeting
(Adds executive comments)
FAYETTEVILLE, Ark., June 6 (Reuters) - From Wal-Mart under fire to Wal-Mart leading the world, the contrast between the company's shareholder meeting last year and Friday's annual meeting was stark.
Wal-Mart Stores Inc (WMT.N) used its latest gathering of shareholders to congratulate itself for getting U.S. sales back on track, while indulging in nostalgia for its founder, Sam Walton, and touting its potential to be a leader in solving issues facing consumers worldwide.
"It is clear that today people look at Wal-Mart as a solution. And we want to be seen that way and we want to act that way," Chief Executive Officer Lee Scott told the crowd gathered in a 16,000-seat arena for the meeting.
That is a major change from a year ago, when the gathering took place as Wal-Mart faced a lagging share price, slowing U.S. sales growth, attacks by union-backed organizations for its pay and health benefits, and questions over Scott's leadership.
A year ago, when Wal-Mart Chairman Robson Walton got up to speak at the event, he had to take the time to publicly express his confidence in Scott.
This year, when he stood in front of company employees to speak, he talked about how his father, Wal-Mart founder Sam Walton, would have been proud of the work the retailer was doing.
"We will always be the kind of company that my dad wanted us to be, swimming upstream, doing things a little differently than everyone else," Walton said.
"When I look at Wal-Mart today I see the same company my dad saw 16 years ago, a company with its best days ahead," he said, referring to the day in 1992 when Sam Walton was awarded the Presidential Medal of Freedom and addressed Wal-Mart employees publicly for one of the last times.
REJUVENATING SALES
Wal-Mart's annual meeting this year comes as the retailer's back-to-basics strategy is helping it post sales gains despite the weak U.S. economy. And its share price has risen in tandem with its improving results.
It is emphasizing its low prices at the same time U.S. shoppers are being squeezed by rising food and fuel costs, a deteriorating housing market and tighter access to credit.
Through Thursday, Wal-Mart shares had risen 26 percent this year.
Wal-Mart said on Thursday its May sales at U.S. stores open at least a year rose 3.9 percent, above Wall Street estimates for a 1.6 percent rise, according to Thomson Reuters data.
The company "handsomely" beat all sales estimates in May, Eduardo Castro-Wright, head of Wal-Mart's U.S. business, told the annual meeting.
"We're winning in the marketplace," he said, telling employees they should be proud of their achievements.
Chief Financial Officer Tom Schoewe talked about the steps the retailer has taken to improve its cash flow, and said it was highly likely its full-year capital expenditures would be at the low end of its $13.5 billion to $15.2 billion forecast.
With that cash it is generating, Wal-Mart has made clear that it would like to pursue international expansion, and Mike Duke, who heads its international division, said the retailer is "exploring opportunities in Russia."
On Thursday, Vicente Trius, the head of Wal-Mart Asia, also told reporters that Southeast Asia as a whole "would be an area that has potential" for the company.
NEVER PLAY CATCH-UP
In a briefing with reporters on Friday, Scott said Wal-Mart was not as prepared as it should have been last year to gain sales when the economy started to falter, gas prices rose and shoppers were looking for ways to save money.
"As gasoline went up, the core Wal-Mart customer was hit first. We as a company were not as ready as we could have been," Scott said. "And it wasn't pretty."
At the annual meeting, he told shareholders the company must not count on finding success by simply replicating its old strategy, as it did in previous years.
"The world changed. People's expectations of us -- and of corporations in general -- changed. And we found ourselves playing catch-up. We can never let that happen again," Scott said.
"Not only must we never fall behind, we must always push ourselves to stay ahead. We must continue to ask fundamental questions that alter perspectives and ultimately behavior."
Scott said the retailer's stores now look better and are friendlier places to shop.
During a tour of a supercenter location on Thursday, executives touted the wider aisles and efforts to weed out poor-selling merchandise and reduce clutter.
Scott said he is meeting with government leaders worldwide, talking about ways to resolve issues confronting consumers.
"There are very clear trends that the retail industry and the world will have to confront -- the aging of the global population, the multipolar balance of power, income inequity, the disruptive power of technology, and the increased demand for energy, to name a few," he said.
He said Wal-Mart stands "ready to work with the new president and the next Congress. We believe we can be an effective partner, and leaders who want to get things done will seek Wal-Mart as a partner." (Editing by Gerald E. McCormick and John Wallace)
