Log In | Register
FAYETTEVILLE — Wal-Mart Stores Inc.'s new President and CEO Mike Duke pledged to shareholders Friday that the world's largest retailer will speed efforts to improve its operations, from offering more compelling merchandise to keeping prices low, as it aims to hold onto customers when the economy improves.
"I believe the economic crisis has brought a fundamental shift in consumer attitudes and behavior," Duke told cheering shareholders packed into a University of Arkansas arena in Fayetteville, about 30 miles from its Bentonville headquarters.
"There is a 'new normal' in which people want to save money and are getting smarter about saving money. ... So let me be clear, and people ask me about this all the time: our customers will stay with us when this economy turns around," he said. "So we must seize this moment in time."
Wal-Mart has taken customers from competitors and been a bright light in a bleak recession that has made shoppers focus on necessities like groceries and pull back on discretionary items like clothing. The company's challenge now is to make sure its new shoppers stay when the economy recovers.
As a testament to recent success, Wal-Mart announced Friday it would launch a new $15 billion share buyback. The program replaces a $15 billion program begun in 2007 that had $3.4 billion of remaining authorization.
But at an annual meeting that was often about celebrating recent business success, the new CEO made clear he planned to not only embrace but accelerate the mission, started by his predecessor Lee Scott, for more corporate responsibility. That includes pressing for more changes in areas ranging from sustainability and responsible sourcing to increased diversity and more career advancement for its workers.
As part of that effort, Wal-Mart said Friday that it just launched a global council that's comprised of 14 Wal-Mart female executives around the global that's designed to push for more advancement for women.
The nation's biggest private employer has long been under pressure by labor-backed critics to keep improving its workplace practices, though criticism has diminished recently.
And while union-backed groups like Wal-Mart Watch and WakeUpWalMart.com are pressing for the enactment of legislation that will make unionizing workers easier, Wal-Mart company officials told reporters Friday that it sees interest from Congress dissipating over worries about hurting businesses in a slowdown, according to Leslie Dach, Wal-Mart's chief of government and public relations.
Clearly, the four-hour annual meeting was more about celebrating than responding to attacks. The meeting featured Wal-Mart's customary celebrity appearances. Teen pop star Miley Cyrus, who will have an exclusive apparel line with Wal-Mart, performed, as did American Idol winner Kris Allen, who is from Arkansas. Basketball legend Michael Jordan also spoke briefly. The event was hosted by actor Ben Stiller, who even took a shot at chief rival Target.
"You guys get up early," said Stiller, referring to the 7 a.m start of the meeting. "I hear they are still sleeping over at Target."
Chief Financial Officer Tom Schoewe told shareholders that the company was increasing sales and profits faster than its competitors around the globe.
Wal-Mart ended the fiscal year with inventory down, but net sales up 7.2 percent to more than $400 billion. The lower inventory typically means fewer markdowns.
Wal-Mart has pulled shoppers away from rivals around the globe because its re-emphasis on low prices along with the right mix of merchandise came together just as the economy went sour.
Wal-Mart continues to aggressively remodel its namesake stores, which includes a better display of electronics and lower shelves to help shoppers navigate the store more easily. The company plans to remodel 500 of its more than 3,600 stores in the U.S. this year.
Eduardo Castro-Wright, vice chairman, who heads up Wal-Mart's U.S. namesake division, told reporters that the company is benefiting from gas prices well below last year's highs, with customers spending the extra cash to buy discretionary items at Wal-Mart.
Meanwhile, Wal-Mart pledged that it will aggressively seek more acquisitions abroad, including in Russia. Sales in Wal-Mart's international business, which now accounts for almost 25 percent of its revenue, rose 9.1 percent to $98.6 billion in its latest fiscal year. The company's latest big acquisition overseas was D&S, the Chile-based food retailer, which was announced earlier this year.
Shares of Wal-Mart were little changed Friday, rising 20 cents to $51.07. Shares soared 20 percent in 2008, but so far this year the stock has been down about 8 percent as investors look to reap benefits from retailers hurt by the recession that stand to gain when the economy turns around.
____
Chuck Bartels contributed to this report from Little Rock, Ark.
