No more need for a slump buster
Shares of Wal-Mart were in the green after management told investors that the discount retailer expects to end its streak of nine consecutive quarters of declining store sales. Bill Simon, President of Wal-Mart U.S. said, “From about May we have been on an upward trend.” The company also said that it plans to ramp the number of U.S. store openings next year to 210-235, up from 142-150 this year. It will continue to build its Supercenter stores, but they will be smaller and the company will also open about 100 small and medium-sized stores to fill in areas where it already has a bigger store.
Management says it will be able to increase the number of new openings without increasing its current U.S. capital expenditures of $6.5 billion per year. One analyst at the meeting suggested that the new stores would cannibalize sales, but Simon downplayed the notion, saying, “The trade-off for us is cannibalize ourselves or get eaten up by someone else’s stores.” Looking to the holiday season, management said Wal-Mart will offer a layaway program beginning October 17 and will offer free shipping on all orders above $45.
Wal-Mart (WMT: NYSE: US$55.20), Net Change: 0.48, % Change: 0.88%, Volume: 21,728,844
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