Walmart Sets FY 2015 Capital Expenditure Plan
BENTONVILLE, Ark.-For the fiscal year ending on Jan. 31, 2015, Walmart's capital spending will total between $11.8 billion and $12.8 billion, $200 million less than its revised projection for fiscal year 2014, according to a statement from its 20th annual conference for the investment community.
Mike Duke, the retailer's president and CEO, said, "We're spending in a disciplined manner by setting up a more streamlined real-estate process. We continue to improve 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."
Duke also said Walmart will add about 34 million net new square feet of retail space this year. The company is also projecting net sales in this fiscal year to reach between $475 billion and $480 billion.
Looking at the company's key segments, Walmart U.S. plans to accelerate its openings of smaller-format stores, especially its Neighborhood Markets, and its e-commerce efforts. Bill Simon, president and CEO of Walmart U.S., said the Neighborhood Markets have produced "strong returns, consistent comp-sales performance and double-digit net sales increases. The U.S. unit will also open about 115 supercenters next year, including relocations and expansions. The supercenter format remains "our primary format for growth," Simon said.
Sam's Club will add about 19 to 21 clubs, including relocations and expansions, in fiscal 2014 and another 17 to 22 clubs in fiscal 2015. "The new clubs we've opened this year are outperforming our expectations, and we will continue to increase our openings," said Rosalind Brewer, Sam's Club president and CEO.
Walmart International will reduce its projected capital investments by $500 million in fiscal 2014, and plans to close about 50 underperforming stores in Brazil and China. "We've made progress on having everyday low price in every market, and we are improving our new-store performance and e-commerce capabilities," said Doug McMillon, president and CEO of the international unit.
Regarding global e-commerce, Walmart made a number of smaller acquisitions during this fiscal year to strengthen technology expertise and add talent. Neil Ashe, president and CEO of Walmart Global e-Commerce, said, "We are delivering value to Walmart through revenue growth and engaging millions more customers. We made significant progress globally during the past year by driving relevant offers and experiences, building a broader assortment and innovating through Big Data, social and mobile capabilities."