Wal-Mart Stores Inc. will slow the pace of new store openings next year in what analysts called a nod to Wall Street calls for greater focus on rekindling faltering sales and earnings growth at its existing 6,700 stores worldwide.
Wal-Mart also told analysts Monday, the first day of its two-day investor meeting, it would sharply reduce the rise in capital spending next year, helped by a flattening in inflation of construction and land costs and by opening fewer new stores.
Wal-Mart said it remains committed to expansion. But analysts said the change was a step toward meeting Wall Street expectations that Wal-Mart, after years of rapid growth, now focus on improving sales and profitability at existing stores to revive a dormant share price.
The share price has hovered mostly below $50 since early 2001. For five years, it has failed to match 2001 highs over $60.
“It’s the start of a shift where they could indeed move to capitalize on what has already been built,” said retail analyst Don Gher from Coldstream Capital Management in Bellevue, Wash., which manages about $1 billion in assets.
