Walmart Will Cut Spending, Grow Ecommerce
To some degree Wal-Mart Stores Inc. (NYSE: WMT) has dominated the news today. At the company's meeting for investors, executives provided a lot of detail about the company's plans to introduce smaller stores, cut expenses and boost sales and profits.
We have already covered the smaller stores story, but this afternoon the company said that it plans to cut capital spending in is 2014 fiscal year (begins February 1st) by about 5%, from $12.6 to $13.5 billion in fiscal 2013 to a range of $12 to $13 billion. In the U.S., capex spending will fall about 8% and spending will decline by about 1% in the company's international division.
The international division president noted:
We will point our investments toward the better performing formats, such as supercenters and discount compact hypermarkets, and we will stop or slow growth in lesser performing formats.
In the U.S. Walmart will add about 80 smaller format Neighborhood Market and Express stores in fiscal 2013 and 95 to 115 more in 2014.
In a break with past practice, Walmart said it plans to generate $9 billion in revenue from ecommerce sales in 2014. To help reach that lofty goal, the company is testing same-day delivery in four markets and a scan-and-go smartphone service, which would allow customers (eventually) to scan purchases with their smartphones and pay for the purchases without getting into a check-out line.
Walmart posted a new 52-week high today of $76.81 and closed at $75.42. Shares are up about 1.1% in after-hours trading.