Walmart Updates Growth Plans
Walmart U.S. Remodeling Success Leads to Accelerated Program
International to Step Up Growth in Emerging Markets
BENTONVILLE, Ark., Oct. 22 /PRNewswire-FirstCall/ -- Wal-Mart Stores, Inc. (NYSE: WMT) today presented its global plans for store and club growth next year at its annual conference for the investment community and updated its projections for capital expenditures through the fiscal year ending on Jan. 31, 2011.
Total capital spending for the fiscal year ending Jan. 31, 2010, is projected to be in a range of $12.5 to $13.1 billion, up from approximately $11.5 billion in fiscal year 2009. Total capital spending for the fiscal year ending Jan. 31, 2011 is projected to be in a range of $13.0 to $15.0 billion.
"Our plan for growth is clearly intended to increase shareholder value," said Tom Schoewe, executive vice president and chief financial officer. "In the U.S., we're building new stores and accelerating the pace of our remodels because they have been so successful at winning and retaining customers.
"We're stepping up growth in our International operations to take advantage of growing economies and opportunities in emerging markets, such as China and Brazil," Schoewe added.
Capital expenditures for all purposes are projected as follows and exclude the impact of any future acquisitions:
Capital Expenditure Detail (US$ billions) Actual Projected Segment FY09 FY10 FY11 Walmart U.S. $5.8 $6.6 - 6.8 $7.0 - 8.0 Sam's Club U.S. $0.8 $0.8 - 0.9 $0.7 - 1.0 Walmart International $4.1 $4.2 - 4.4 $4.5 - 5.0 Corporate $0.8 $0.9 - 1.0 $0.8 - 1.0 Total $11.5 $12.5 - 13.1 $13.0 - 15.0
If fiscal year 2009 were placed on a constant currency basis with fiscal year 2010, International capital expenditures in fiscal year 2009 would have been approximately $3.8 billion.
In the fiscal year ending Jan. 31, 2010, the company expects to add approximately 38 million square feet globally, compared to approximately 44 million square feet added in the prior year (excluding square footage added by acquisition). Walmart expects to increase global square footage by approximately 37 million square feet in fiscal year 2011.
Square footage growth (excluding any acquisitions) is projected as follows:
Square Footage Growth by Segment (in millions) Actual Projected Additional Square Footage for: FY09 FY10 FY11 Walmart U.S. 23 14 11 Sam's Club U.S. 2 1 1 Walmart International 19 23 25 Total Company 44 38 37
Walmart U.S. to Focus on Remodels and Accelerating Growth Through New, More Efficient Supercenters
In the U.S., Walmart will continue to focus on further improving the returns of its supercenter format through remodels of existing stores and by accelerating growth of new store designs capable of generating greater returns from current assets.
By November 2009, Walmart U.S. will have completed Project Impact remodels at more than 30 percent of its 3,538 stores. By the end of fiscal year 2012, approximately 70 percent of Walmart U.S. stores, including newly-constructed stores, are expected to be updated under the Project Impact initiative.
"As part of our plan to accelerate growth, we are investing capital in fiscal year 2011 for stores that are planned to open in fiscal year 2012, and we're stepping up the remodels of our existing store base," said Eduardo Castro-Wright, vice chairman, Wal-Mart Stores, Inc. "The remodeling of our existing store base is important because the investments are delivering strong sales performance, excellent customer response and higher returns."
Sam's Club Expanding and Remodeling
Sam's Club plans to add between five and 10 new, expanded or relocated clubs in fiscal year 2011 after adding a projected 15 clubs this fiscal year.
"We remain committed to opening and operating the optimal number of clubs, in the right sizes and formats, in locations that make the best use of our capital," said Brian Cornell, president and CEO, Sam's Club. "Sam's also is increasing its investment in remodeling to improve operating productivity and efficiency, based on a new club layout unveiled earlier today."
Sam's Club plans to remodel between 50 and 55 clubs by year-end, and expects to remodel between 70 and 90 clubs next fiscal year.
Investment outside the U.S. focused on Growth Markets
Walmart International plans aggressive investment, particularly in growth markets such as China and Brazil. The International portfolio includes a variety of formats, from supercenters to small grocery stores. New stores are expected to add approximately 23 million square feet in fiscal year 2010, and approximately 25 million more square feet in fiscal year 2011. These projections are based on the existing store base and do not include possible acquisitions.
"We will continue our organic growth strategy, with strong capital discipline and optimization of our portfolio of formats and brands worldwide," said Doug McMillon, president and CEO of Walmart International. "We will allocate capital, by country and by format, to improve returns from these investments."
Wal-Mart Stores, Inc. (NYSE: WMT) serves customers and members more than 200 million times per week at more than 8,000 retail units under 53 different banners in 15 countries. With fiscal year 2009 sales of $401 billion, Walmart employs more than 2.1 million associates worldwide. A leader in sustainability, corporate philanthropy and employment opportunity, Walmart ranked first among retailers in Fortune magazine's 2009 Most Admired Companies survey. Additional information about Walmart can be found by visiting www.walmartstores.com. Online merchandise sales are available at www.walmart.com and www.samsclub.com.
This release contains statements that the company believes are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, and intended to enjoy the protection of the safe harbor for forward-looking statements provided by that Act. Except as noted below, these forward-looking statements are identified by use of the words or phrases "are accelerating," "are building," "are increasing," "are stepping up," "expected," "expects," "is increasing," "are projected," "is projected," "plans," "projected," "is intended," "remain committed," "believe," "will allocate," "will be based," "will continue," "will have completed," "will remodel," or a variation of the foregoing words or phrases in these statements, including in captions to certain of the columns contained in the tables included in this release. The forward-looking statements discuss, among other things, management's expectations for or concerning: a step up in growth in emerging markets by the company's International operating segment; projected capital spending by the company in each of fiscal years 2010 and 2011; building new stores and accelerating the pace of remodeling of stores; projected capital spending by each of the company's operating segments, for general corporate purposes and in total for each of fiscal years 2010 and 2011; projected increases in square footage globally and by operating segment in each of fiscal years 2010 and 2011; the company's Walmart U.S. operating segment continuing to focus on further improving the returns of its supercenter format through remodels of existing stores and accelerated growth in new store designs capable of generating greater returns from current assets; Walmart U.S. increasing its investment in remodeling stores to deliver strong sales performance, excellent customer response and higher returns; Walmart U.S. having completed remodels of approximately 70 percent of its stores, including new stores, by the end of the company's fiscal year 2012; the company's Sam's Club operating segment adding new, expanded and relocated clubs in fiscal year 2011 and the number of clubs to be added in fiscal year 2010; Sam's Club's commitment to opening and operating the optimal number of clubs in the right sizes and formats and in locations to make the best use of its capital; Sam's Club increasing its investment in remodeling clubs; the number of clubs that Sam's Club plans to remodel in each of fiscal years 2010 and 2011; the company's International operating segment aggressively investing, particularly in growth markets such as China and Brazil; the growth in square footage of the International operating segment in each of fiscal years 2010 and 2011; the International operating segment continuing its organic growth strategy with strong capital discipline and optimization of its portfolio of formats and brands; and the International operating segment allocating capital to improve returns from its investments. Also included in the forward-looking statements in this release is the information contained in the charts entitled "Capital Expenditure Detail," and "Square Footage Growth by Segment,", which information relates to capital expenditures to be made and square footage to be added during each of the fiscal years 2010 and 2011. These forward-looking statements are subject to risks, uncertainties and other factors, domestically and internationally, including general economic conditions, including the effects of the current economic crisis, competitive pressures, geopolitical conditions and events, inflation, deflation, consumer confidence, credit availability, spending patterns and debt levels, currency exchange fluctuations, unemployment rates, personal income and other tax rates, trade restrictions, availability of attractive investment opportunities in non-United States markets, availability of appropriate locations for new or relocated units, local real estate and other laws, ordinances and initiatives that may prevent us from building or relocating, or that impose limitations on our ability to build or relocate, stores in certain locations, availability of necessary utilities, weather conditions, availability of skilled labor, labor, material and other construction costs, insurance costs, operating expenses, interest rate fluctuations and other capital market conditions, and other factors and risks. The company discusses certain of these matters more fully in that Annual Report on Form 10-K for its fiscal year ended January 31, 2009, and this release should be read in conjunction with that Annual Report on Form 10-K and together with all of the company's other filings, including its Current Reports on Form 8-K, made with the SEC through the date of this release. You are urged to consider all of these risks, uncertainties and other factors carefully in evaluating the forward-looking statements. As a result of these matters, including changes in facts, assumptions not being realized or other circumstances, the actual implementation of the company's operating and other plans by one or more of its operating segments, its actual capital expenditures, unit growth, and square footage growth in one or more of its operating segments, the formats of the units built, and the focus of the company's expansion may differ materially from the anticipated results described in these forward-looking statements. The forward-looking statements included in this release are made only as of the date of this report, and the company undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances.
SOURCE Wal-Mart Stores, Inc.