OREANDA-NEWS. October 11, 2012. Wal-Mart Stores, Inc. (NYSE: WMT) today outlined its financial priorities for next fiscal year ending Jan. 31, 2014 at its annual conference for the investment community and reinforced its focus on growth, leverage and returns.  The company’s plans include a reduction in capital expenditures that will drive comp and new store growth, operating leverage and productivity initiatives and expansion in global e-commerce, including acquisitions.

“Our momentum in delivering strong results continues, and we are investing for the future by creating an even stronger business,” said Wal-Mart Stores, Inc. President and CEO Mike Duke. “Strong business fundamentals are driving our top line and bottom line results.  We are delivering on the productivity loop and being even more disciplined about our operating expenses and capital spending.  We have a deliberate approach to how we will grow, how we will deliver further operating leverage and continue to deliver strong returns to our shareholders.

“We will continue to expand our physical presence through a variety of formats across our markets, while also investing in initiatives to enhance our operational excellence and further new e-commerce opportunities,” Duke added. 

The company reaffirmed its most recent capital expenditure forecast of USD 12.6 billion to USD 13.5 billion for the current fiscal year.  The fiscal 2014 capital plan will range from USD 12.0 to USD 13.0 billion.  The capital expenditure budget covers growth for comp and new stores, logistics and supply chain expansion, investments to drive productivity and reduce expenses, and global e-commerce expansion.

Walmart also confirmed that it remains on track to meet its commitment of reducing operating expenses as a percentage of sales by 100 basis points over five years, beginning with the current fiscal year.  Savings continue to be realized through lower expenses and productivity initiatives, and the savings are reinvested in lower prices and improved international profitability.

Charles Holley, executive vice president and chief financial officer, outlined the investment plan for fiscal year 2014.

"We manage our capital expenditures with the same discipline we manage operating expenses,” said Holley.  “We identify ways to further reduce our construction costs for new stores, as well as remodels.   We are improving our real estate process and adding relatively the same square footage with fewer dollars.  Investments in new initiatives drive further operating leverage through business processes, shared services and technology.  Additionally, we are investing in our expanding global e-commerce business.

“Walmart plans to grow total company sales 5 to 7 percent in fiscal 2014, which is projected to increase net sales by USD 23.0 to USD 33.0 billion.  We expect to increase retail square footage by 3 to 4 percent next year, which would add another 36 to 40 million square feet around the world,” Holley said.  “Operating expenses will continue to grow less than the rate of sales growth.”