Walmart California

Walmart has announced at its annual analyst meeting that sales growth is forecast to match expectations this year despite the current global economic slowdown, with market share also expected to increase.

The group also revealed that it has cut capital spending this year, and will choose to remodel stores or open smaller outlets in key markets instead of opening larger stores over the next 12 months.

'In a time of great economic uncertainty, this company is well positioned to succeed in the future and in the short term,' chief executive officer Lee Scott said at the meeting.

Group capital spending for the year ending 31 January 2009 is forecast at US$13bn, down from approximately US$14.9bn duringfiscal year 2008, with worldwide capital spending estimated atUS$13bn-US$14.5bn during the fiscal year ending 2010.

In the company's capital spending forecast released this week, chief financial officer and executive vice-president Tom Schoewe explained that higher levels of free cash flow will enable the group to continue investments for future returns and growth.

'We are operating from a position of strength, with the strategy of moderating store growth and increasing operating cash flow,' Mr Schoewe said. 'This provides significant free cash flow to invest in our business, while delivering returns to our shareholders through dividends and share repurchases.'

Walmart added that it expects to open 166 supercentres in the US by the end of the fiscal year, and then 125-140 new outlets the following year, as well as increasing international store area by 17m-18m square feet by 31 January 2009.

'Our international growth will cover a wide range of formats, remaining balanced between both emerging and mature markets and totally consistent with our capital efficiency model,' Mr Schoewe said.