International Growth Critical for Wal-Mart
About Wal-Mart Stores Inc.
What does the company do? Mass-market retailer
Financial report: FY 2010 (ended
Q. Is my Wal-Mart Stores Inc. stock going to revive? It frustrates me.--P.W., via the Internet
A. The world's largest retailer fared well early in the recession as consumers became more budget-conscious.
However, nagging U.S. unemployment and some uncharacteristic mistakes in merchandising have since slowed it down. Indicative of its struggles have been several key executive departures. Most recently, CFO
International growth is critical. It has offered a hefty--some say extravagant--
To emphasize its low-cost focus in the U.S., Wal-Mart Stores Inc. has partnered with health-care benefits provider
A cell phone plan under its own brand with no contract and a flat monthly fee was launched. It has also begun selling Apple's iPad, which will help holiday sales.
Despite the positives of its dominating size and famous cost efficiency, Wal-Mart Stores Inc. faces a number of employee discrimination lawsuits. It must also cope with economic uncertainties, the potential for deflation in grocery prices and problems associated with expanding into new nations.
The consensus rating on Wal-Mart Stores Inc. shares from
Wal-Mart Stores Inc. has more than 8,500 stores in 15 countries, nearly half of them in the U.S. About one-fourth of its profits currently come from overseas.
It recently announced it is ending its automatic profit-sharing contributions for employees, instead contributing up to 6 percent of pay so long as the worker contributes an equal amount.
Earnings are expected to increase 10 percent this year, compared to a 52 percent increase projected for the retailing industry, according to Thomson Reuters. The forecast is for a 10 percent growth rate next year vs. 20 percent expected industry-wide. The five-year annualized return is estimated to be 10 percent, compared to 16 percent expected for its peers.
In line with its stated goal in 2005 of obtaining 100 percent of its power from renewable resources, Wal-Mart Stores Inc. is beginning installation of thin film solar in its stores. That technology used for roofs and other building purposes is already popular with utilities.
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Investing - International Growth Critical for Wal-Mart | Wal-Mart NYSE:WMT
(c) 2010 Andrew Leckey