Skip navigation

Wal-Mart Eyes Lower Cap-Ex in FY2015

BENTONVILLE, Ark. — Wal-Mart Stores here said Tuesday it expects net sales for the current fiscal year to fall within the range of $475 billion to $480 billion — an increase between 1.9% and 3%, compared with a 5% increase to $466.1 billion a year ago.

Charles Holley, executive vice president and chief financial officer, said Wal-Mart anticipates sales growth of 3% to 5% next year, which would boost total corporate sales to around $500 billion.

"In terms of leverage, our operating income will grow at the same rate, or faster, than sales due to our continued focus on operating expense discipline. Generating strong free cash flow remains a key priority."


Follow @SN_News for updates throughout the day.

The company said it plans to reduce capital spending next year — fiscal 2015 — by approximately $200 million, to a range between $11.8 billion and $12.8 billion, with accelerated growth of small-format stores — compared with expectations of spending between $12 billion and $13 billion for the current fiscal year, the company said.

"We're spending in a disciplined manner by setting up a more streamlined real-estate process," Mike Duke, president and chief executive officer, told an investors conference here. "As we continue to improve our sales per square foot, Wal-Mart will continue to grow through new stores and e-commerce while expanding our logistics and fulfillment network in critical markets."

Capital spending in the U.S. will fall in a range of $6 billion to $6.5 billion this year, up $500 million over the company's originally projected forecast due to an acceleration of small-format openings and e-commerce initiatives.

Wal-Mart said it plans to open 115 supercenters in fiscal 2015, compared with 125 this year; and to accelerate the growth of small-format stores, mostly Neighborhood Markets, projecting between 120 and 150 next year, compared with 120 this year.

According to Bill Simon, president and CEO of Walmart U.S., "We will accelerate growth of our Neighborhood Markets because of their strong returns, consistent comp-sales performance and double-digit net sales increases; and we will continue to build and leverage the supercenter format, which remains our primary format for growth.

"The combination of our large- and small-store formats allows us to strengthen our market-share position and give customers convenient access to shop for food and general merchandise, as well as [have] access to our e-commerce offerings.

"We believe our multi-format portfolio will fuel the next generation of retail; enable the convergence of digital and physical store locations through e-commerce; and unlock value, giving our customers anytime, anywhere access to Wal-Mart," Simon added.

Read more: Wal-Mart Eyes 'Game Changer" for Small-Format Stores

Wal-Mart also said it expects to open between 17 and 22 new Sam's Clubs in fiscal 2015, at a cost of $1 billon, compared with between 19 and 21 openings this year, at a cost of $1 billion. The company said it plans more than 70 remodels this year, compared with 55 to 60 next year.

According to Rosalind Brewer, Sam's president and CEO, "The new clubs we've opened this year are out-performing our expectations, and we will continue to increase our openings. We've improved our construction cost structure, and with the productivity initiatives in place and consistent layouts, we are opening clubs that cost less to run and improve the shopping experience."

In its international division, Wal-Mart said it will decrease capital spending this year to $4 billion to $4.5 billion, down by $500 million for the company's original projections, due to fewer new openings in Mexico and India and the planned closings of approximately 50 under-performing stores in Brazil and China.

In fiscal 2015 Wal-Mart said it expects to spend about the same amount as this year — $4 billion to $4.5 billion — across 26 international markets, "which reflects actions to continue strengthening our position in markets like China and Brazil," Doug McMillon, Walmart International president and CEO, said. "We are managing our portfolio to be a best-in-class operation through innovation, making compliance a competitive advantage and winning with an e-commerce strategy that offers a unique shopping experience across all channels."

Neil Ashe, the company's global e-commerce president and CEO, said Wal-Mart will continue to invest "significantly in our global technology platform, next-generation fulfillment network and the best talent."

Read more: Wal-Mart Opens 24 Stores Amid Union Protests

Suggested Categories More from Supermarketnews


Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.