“Our underlying businesses are solid, and we are pleased that we will add approximately 34 million net new square feet of retail space this year, even with a tough and unpredictable economy. This is incremental to the more than 1 billion square feet of retail space Walmart operated around the world at the end of last year,” said Wal-Mart Stores, Inc.
President and CEO Mike Duke. “We’re spending in a disciplined manner by setting up a more streamlined real estate process. We continue to improve our sales per square foot and Walmart will continue to grow through new stores and e-commerce, while expanding our logistics and fulfillment network in critical markets.”
The company forecasts that net sales for the current fiscal year will range between $475 and $480 billion. The company reported total revenue of $231.1 billion through the second quarter ended July 31, 2013.
Charles Holley, Walmart’s executive vice president and chief financial officer, outlined the company’s commitment to its financial priorities for growth, leverage and returns, and detailed the investment and expansion plan for fiscal year 2015. Walmart uses its operating cash flow to drive growth through stores and e-commerce, strategic acquisitions, dividends and share repurchases.
“We continue to make progress on capital efficiency, finding new ways to reduce construction costs for new stores and remodels and shortening the timeframe from approval to opening,” Holley explained. “Over the last three years, we delivered more with less, while growing square footage, sales and shareholder returns.”
Holley pointed out that the capital dedicated to technology and e-commerce is growing.
“Technology is our fastest growing area for capital expenditures,” he explained. “We define technology investments as systems and Global e-Commerce capital dollars. We will increase our technology spend 70 percent from fiscal year 2009 through fiscal year 2014. Next year, investments in this area will increase another 12 percent.
“Walmart plans to grow company net sales 3 to 5 percent in fiscal year 2015, which is projected to increase net sales by $14 to $24 billion. We expect to add another 33 to 37 million net retail square feet around the world next year,” Holley said. “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.”
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