* 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
By Nicole Maestri
SAN FRANCISCO June 2 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
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)