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Wal-Mart Sees Opportunities At Home, Abroad

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The Associated Press

Published: October 25, 2007

Chief Executive Officer Lee Scott told investors Wednesday that Wal-Mart Stores is focused on improving flagging sales at its existing U.S. stores, even as it cuts plans for new store openings in an increasingly saturated market.

The world's largest retailer is also looking abroad for stronger growth in the 13 countries where it has stores and hopes to add Russia to a list that already includes China, Britain and Japan, Scott told an annual meeting of investors and financial analysts.

In the longer term, Scott said Wal-Mart's low-price strategy will allow it to profit in the United States from an 'incredible opportunity' as a wave of baby boomers retire and need to stretch fixed incomes.

Scott wrapped up the two-day conference in Rogers, Ark., near Wal-Mart's Bentonville headquarters, with an upbeat assessment that Wal-Mart has a strategy in place to grow while also increasing returns to shareholders.

Scott's confidence contrasted with the first half of this year, when he said he was very concerned as Wal-Mart abandoned last year's foray into fashion and upscale offerings and sought a way back to its traditional focus on low prices.

Wal-Mart cut its profit outlook for the year when it reported second-quarter earnings in August. The company cited a slowing economy, and analysts said Wal-Mart was struggling to find the right mix of merchandise.

'My assumption is that all things being equal and the economic environment not being any worse, that I believe that was the low point,' Scott said about the second quarter. He said he was optimistic about holiday sales.

Wal-Mart raised its earnings forecast for the current quarter on Oct. 11, citing improved cost controls.

'As you have heard, we are clearly focused on improving the Wal-Mart Stores U.S. business, with special emphasis on comp store sales,' Scott said, referring to sales at stores open at least a year.

A key retail measure, Wal-Mart's same-store U.S. sales have slowed to 0.8 percent through September this year, from 1.9 percent for the last full fiscal year and 3 percent in 2005.

Wal-Mart shares fell 6 cents, or 0.14 percent, to $43.87 on Wednesday.

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