Some notables from the Wal-Mart (WMT) earnings call
Domestic:
** US capex is projected to be down between approximately $1.4 billion and $2 billion for fiscal 2009 when compared to 2008.
** In fiscal 2008, returned more than $11 billion to shareholders in the form of share repurchase and dividends (5.5% of market cap).
** The company generated $5.4 billion in free cash flow in fiscal 2008 and that compares to $4.3 billion in fiscal 2007, a 25% increase year over year.
** Additional square footage dedicated to entertainment selling space this past year. Entertainment area is clearly becoming the destination for of customers.
** Adding known brands to apparel offerings. These include Garanimals already available in baby and kids. Ocean Pacific or OP coming in the spring across all of apparel and LEI the denim brand for back to school in juniors and girls.
International:
** Strongest underlying sales performance in the quarter came from China, Brazil and Argentina. ASDA in United Kingdom continued with very positive sales results in the fourth quarter.
** Wal-Mart Canada delivered its strongest quarterly sales increase in the year during the fourth quarter.
** $500 million projected increase in International capex in fiscal 2009 when compared to 2008.
Not much new released and to be honest not much was really expected. There were very positive comments about apparel and it has been a long time since I heard that on a call. Even moderate success in this area would be fantastic.
Watch electronics. The local store here just did a remodel and the electronics area is real nice. Based on the stores reputation for pricing, it is becoming a “first on the list” to shop for those items. One has to wonder if recent results at Best Buy (BBY) and Circuit City (CC) may be reflecting that success.
It is too early to tell for sure, but it does bear watching as the upbeat comments at Wal-Mart do contradict those from the other two.
I get a feeling that something rather exciting is in store for the annual meeting this year. It just seems a bit to calm out there now… A nice fat dividend increase would be nice. I asked for 28 cents a share Monday, can we do better? Do not forget the stock repurchase plan was for $15 billion, 1/2 half of that is gone and free cash flow is at record levels. Can we add another $15 billion to it?
Disclosure (“none” means no position):Long Wal-Mart
