Wal-Mart (NYSE: WMT) Lowers Capital Spending

Wal-Mart (NYSE: WMT) Lowers Capital Spending-Image via Wikipedia

Wal-Mart Stores, Inc. (NYSE: WMT) today presented its global plans for growth of its operating segments for the current and next fiscal year at its annual conference for the investment community.

The company lowered the high end of its range for the current fiscal year 2011 forecast for capital spending by $1 billion.  Total capital spending for the current fiscal year ending Jan. 31, 2011 now is projected to range from $13 to $14 billion, down from the previous range of $13 to $15 billion.  Last fiscal year, the company spent $12.2 billion on capital projects.  Total capital spending for next fiscal year, ending Jan. 31, 2012, is projected to range from $13.5 to $14.5 billion, an increase of approximately 3.7 percent based on the midpoint of the two ranges.

“Our financial priorities of growth, leverage and returns drive our decisions on capital investment,” said Charles Holley, executive vice president, finance and treasurer.  “We are positioning our company for the next generation Walmart, which means that we will grow internationally and in the United States.  We believe our capital strategy strikes the right balance between growth and return on investment.

“We expect to grow total company square footage between three and four percent next fiscal year, which means that square footage and capital spending will grow at approximately the same rate.  Overall sales growth is forecasted between four and six percent,” Holley said.  “In the United States, we will shift more capital toward new stores, including supercenters and smaller formats.  We are lowering remodeling costs through greater efficiencies, so the total capital commitment for Walmart U.S. next year will be flat with the current fiscal year.

“Because of Walmart International’s concentration on growth in emerging markets, capital expenditures for the segment will increase slightly more than 13 percent next year compared to the current fiscal year,” Holley added.  “Capital for the other operating segments, and corporate overhead, are projected to be flat next year compared to this year.”

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