Expansion program doubles initial forecast
BENTONVILLE, Ark., Feb. 20, 2014 – Behind a real estate strategy focused on providing the broadest selection of products and convenient access through a digitally connected, multi-format portfolio, Wal-Mart Stores Inc. (NYSE: WMT) today announced it is significantly accelerating its capital plan for U.S. small store format openings for the current fiscal year.
The company is expanding its original capital forecast provided last October, and now expects to add approximately 270 to 300 small stores during the fiscal year, doubling the initial forecast of 120 to150 stores. Walmart U.S. will continue its plan to open approximately 115 new supercenters this year.
“Customers’ needs and expectations are changing. They want to shop when they want and how they want, and we are transforming our business to meet their expectations,” said Bill Simon, Walmart U.S. president and CEO. “Customers appreciate the broad assortment of our supercenters for their stock-up trips as well as our small store formats for fill-in trips. By unlocking this growth opportunity and further combining our supercenters and small store formats with an unlimited selection available through ecommerce, we provide our customers with anytime, anywhere access to our brand.”
The small store fleet has continued to deliver positive comp sales and traffic increases each quarter. Comp sales for Neighborhood Market stores grew approximately 4 percent for fiscal year 2014, driven by fresh and pharmacy.
“Neighborhood Market is performing comparable or favorable to leading grocers,” said Simon. “Our small store expansion, in addition to providing customers access to a wide variety of products, including fresh, pharmacy and fuel, will help us usher in the next generation of retail. This will combine thousands of points of physical access with digital retail experiences that include initiatives such as Site to Store and Pay with Cash.”
Walmart currently operates 346 Neighborhood Markets and 20 Walmart Express stores. The Express units have performed well and are being expanded beyond the initial three-market pilot. As a result of its more aggressive plan, Walmart U.S. projects to end fiscal year 2015 with net retail square footage growth of approximately 21 to 23 million square feet across all formats, versus its original projection of approximately 19 to 21 million square feet. The projected capital expenditures and square footage details exclude the impact of future acquisitions.
“We have a healthy pipeline of stores in development, and we systematically work to improve our real estate and construction processes, reduce building costs and shorten the time needed to open our stores,” said Simon. “In addition to providing best-in-class one-stop shopping at supercenters, we believe that accelerating our small store expansion will allow customers to choose where and when to shop based on their needs. Our small store expansion will also strengthen our market share and create greater efficiencies in our supply chain through a tethered approach that uses supercenters as a supply chain base, links our resources and provides a unique and connected customer experience.”
To fund this additional growth, the company is revising its capital expenditures forecast for the Walmart U.S. segment to $6.4 to $6.9 billion, up from an initial range of $5.8 to $6.3 billion. This reflects the increased small store growth and the current pipeline of supercenters, which remain an essential part of the company’s strategy. In total, across supercenter and small store formats, Walmart U.S. plans to open 385 to 415 units in fiscal 2015, adding considerably to the more than 4,200 stores currently open.
NOTE: High resolution photos of Neighborhood Markets are available at: news.walmart.com/photos.
About Wal-Mart Stores, Inc. (NYSE: WMT)
Wal-Mart Stores, Inc. (NYSE: WMT) helps people around the world save money and live better – anytime and anywhere -- in retail stores, online, and through their mobile devices. Each week, more than 245 million customers and members visit our 11,302 stores under 71 banners in 27 countries and ecommerce websites in 10 countries. With fiscal year 2014 sales of over $473 billion, Walmart employs more than 2 million associates worldwide. Walmart continues to be a leader in sustainability, corporate philanthropy and employment opportunity. Additional information about Walmart can be found by visiting http://corporate.walmart.com on Facebook at http://facebook.com/walmart and on Twitter at http://twitter.com/walmart. Online merchandise sales are available at http://www.walmart.com and http://www.samsclub.com.
This release contains statements as to Wal-Mart Stores, Inc. management's forecasts of the number of new small format stores, the number of new supercenters and the total new stores of all formats that the Walmart U.S. operating segment of Walmart will open in the fiscal year ending Jan. 31, 2015, the net retail square footage growth of the Walmart U.S. operating segment in the fiscal year ending Jan. 31, 2015, and the range of the capital expenditures to be made by the Walmart U.S. operating segment during the fiscal year ending Jan. 31, 2015, and certain assumptions underlying those forecasts, as well as management’s expectations that the Walmart U.S. operating segment will combine thousands of points of physical access with digital retail experiences and that the small store expansion of the Walmart U.S. operating segment will strengthen its market share and create greater supply chain efficiencies that Walmart believes are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These statements are intended to enjoy the protection of the safe harbor for forward-looking statements provided by that act. Those statements can be identified by the use of the word or phrase "expects," "forecast," "plans," “projects,” “will also strengthen … and create," "will combine," and "will continue" in the statements. These forward-looking statements are subject to risks, uncertainties and other factors, including: general economic conditions; business trends and economic conditions affecting the specific markets in which Walmart may construct new units; competition from other retailers and other competitive pressures; consumer acceptance of the Walmart U.S. operating segment’s stores and merchandise in the markets in which new units are opened; consumer shopping patterns in the markets in which the small store expansion of the Walmart U.S. operating segment occurs; the ability of Walmart to obtain greater logistical and cost efficiencies in its supply chain; the amount of inflation or deflation that occurs; weather conditions and events and their effects; catastrophic events and natural disasters and their effects on Walmart's business; public health emergencies; civil unrest and disturbances and terrorist attacks; commodity prices; transportation costs; energy costs; the availability of appropriate locations for new units; local real estate, zoning, land use, and other laws, ordinances, legal restrictions and initiatives that may prevent Walmart from building, or that impose limitations on Walmart’s ability to build, new units in certain locations; availability of persons with the skills and abilities necessary to meet Walmart’s needs for managing and staffing its new units and conducting their operations; availability of necessary utilities for new units; availability of skilled labor and labor, material and other construction costs in areas in which new units are proposed to be constructed; casualty and other insurance costs; accident-related costs; and other risks. Walmart discusses certain of the factors described above more fully in certain of its filings with the SEC, including its most recent annual report on Form 10-K filed with the SEC (in which Walmart also discusses other factors that may affect its operations) and this release should be read in conjunction with that annual report on Form 10-K, together with all of Walmart's other filings, including its quarterly reports on Form 10-Q and current reports on Form 8-K, made with the SEC through the date of this release. Walmart urges readers to consider all of these risks, uncertainties and other factors carefully in evaluating the forward-looking statements contained in this release. As a result of these matters, changes in facts, assumptions not being realized or other circumstances, Walmart's actual results may differ materially from the expected results discussed in the forward-looking statements contained in this release. The forward-looking statements contained in this release are as of the date of this release, and Walmart undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances.