* Walmart US CEO: Same-store sales up in July, Aug, Sept
* To open 142-150 US Walmarts in FY'12, 210-235 in FY'13
* Capex to total $13 bln-$14 bln in each of next 2 years
* Expenses growing more slowly than sales 2 yrs in a row
* Shares end up 0.9 percent at $55.20
By Jessica Wohl
Oct 12 Wal-Mart Stores Inc is seeing
sustained improvement at its U.S. discount chain after a sales
slump that lasted more than two years, placing the world's
largest retailer in a sweet spot heading into the important
Sales at U.S. Walmart stores open at least a year have
risen for three months straight, though shoppers are not
unabashedly spending as economic malaise persists.
The job situation remains the biggest concern for U.S.
consumers, Wal-Mart Chief Executive Mike Duke said during the
company's annual investor meeting on Wednesday.
"We still feel the customer is fragile. The customer will
spend discretionary income, but they will not just go out and
spend it without really thinking (it) through," Chief Financial
Officer Charles Holley told reporters after the meeting.
Sales at stores open at least a year, a key metric known as
same-store sales, rose in July, August and September, said
Walmart U.S. CEO Bill Simon.
As gasoline prices have gone down, his division, by far the
company's largest unit, has started to see sales hold up a bit
better as the month progresses, he added, rather then just
seeing a spurt at the beginning of the month when customers
receive paychecks and government assistance.
Same-store sales account for about 98 percent of Walmart's
sales in the United States, so ending the slump at existing
stores is critical for Wal-Mart.
The chain is also a strong indicator of U.S. economic
momentum. Walmart discount stores account for nearly 11 percent
of U.S. retail sales.
Still, Wal-Mart did not go so far as to change its forecast
for U.S. same-store sales -- a 1 percent drop to a 1 percent
increase -- in the fiscal third quarter, which ends in
Traffic in U.S. stores has improved, though it is still not
Wal-Mart is still tweaking its operations to cut costs more
than three years after the financial crisis began. Executives
highlighted new scheduling systems, delivery of mixed pallets
of goods to stores and other efforts to save money.
Expenses will grow at a slower rate than sales for the
second consecutive year, making fiscal 2012 the first time
Wal-Mart has accomplished that feat in two consecutive years
since 1992, Holley said.
For fiscal 2013, which begins in February, the company
forecast sales growth of 5 percent to 7 percent.
Wal-Mart shares ended 0.9 percent higher at $55.20 on
Wednesday after rising as much as 3 percent following comments
about the U.S. business earlier in the day.
MORE AND MORE WALMARTS
Walmart's U.S. discount chain is resuming holiday layaways
after a five-year hiatus and heavily increasing its advertising
spending as it tries to win back lower-income shoppers.
It has brought 10,000 items back to stores, propelling
sales of goods from hunting gear to underwear, and plans to
invest $2 billion over the next two years to keep its prices
lower than those of competitors'.
"Walmart's going to be aggressive in price and that just
bodes well for the consumer," said ITG Investment Research
analyst John Tomlinson, who attended the meeting in Rogers,
Arkansas. "This is going to be a very competitive retail
landscape this holiday season. They're committed to winning."
Walmart also plans to open up to 385 U.S. stores over the
next two years, most of them supercenters, as it tries to
retain and expand its dominance in retail.
Wal-Mart plans to increase its overall square footage by 36
million to 39 million square feet this year, and by 45 million
to 49 million square feet in fiscal 2013. Most of the growth is
projected to come in international markets.
Total company capital expenditures should rise to $13
billion to $14 billion in both fiscal 2012 and fiscal 2013, up
from $12.7 billion in fiscal 2011, Holley said. The company is
lowering capital spending at the U.S. Walmart division by 7.4
percent from this year to next year, while raising Walmart
international capital spending by 11.8 percent, he said.
Walmart U.S. plans to open 130 to 135 supercenters and 80
to 100 small-to-medium stores next year, said Karen Roberts,
president of Walmart Realty.
Supercenters remain Walmart's primary growth vehicle in the
United States, though new supercenters are smaller than in the
past at roughly 90,000 to 120,000 square feet. Before,
supercenters averaged about 185,000 square feet.
Sam's Club plans to add 10 to 15 new, expanded or relocated
warehouse clubs. That chain has seen strong membership
momentum, though executives declined to give details. One thing
differentiating Sam's Club from larger competitor Costco
Wholesale Corp is that Sam's is the only warehouse
club to sell Apple Inc items such as iPads.
Walmart International's leaders, who run thousands of
stores from China to South Africa, said that international
return on investment should rise three to four percentage
points between fiscal 2012 and 2017.
Wal-Mart is not expecting a material financial impact from
the pork mislabeling issue it is dealing with in part of China,
Walmart Asia CEO Scott Price said.