Wal-Mart Stores Inc., the world's largest retailer, has pledged to investors solid revenue growth for the current fiscal year and faster growth next year. |
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NEW YORK - Wal-Mart Stores Inc.'s CEO and President Mike Duke promised investors Thursday as it issued a modest forecast for U.S. expansion this year and next that the retailer's aggressive price-cutting will not hurt its stock price.
"We absolutely will have price leadership while at the same time greater shareholder value," said Mike Duke, who took the helm in February. "This is not about trading one for another. The two go hand and hand."
He continued, "We will win in the area of retailing around the world."
Duke was addressing investors on the second of two days of analyst meetings in Roger, Ark., near the company's headquarters in Bentonville, Ark. The meetings were broadcast online.
The theme resonating from the meeting was how the world's largest retailer was cutting costs and reinvesting those savings to lower prices for shoppers, which in turn drives sales. The executives said that increased revenue will in turn increase efficiencies and lower costs further.
Intent on keeping its reputation as a low-price leader, even as other chains cut prices to compete for steadfastly conservative shoppers, the retailer announced Wednesday that it will cut prices weekly on top-selling items from bananas to board games and hold those cuts through the holiday season.
Company officials expect sales in the current fiscal year, which ends Jan. 31, to be 1 percent to 2 percent higher than the year before. That's down from the original estimate of 5 to 7 percent. They expect sales to accelerate from 4 percent to 6 percent in the following year.
Wal-Mart, which generated more than $400 billion in sales last year, also narrowed its guidance for square-footage growth this year, to 4 percent, or 38 million square feet, from the original estimate of 4 percent to 5 percent.
It expects its sales space to grow another 4 percent, or 37 million square feet, in fiscal 2011. Last year, the chain added 44 million square feet.
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