Wal-Mart Stores Inc plans to buy back US$15 billion more of its shares and expects to add more than 500,000 employees in the next five years as it increases its global presence.
At the same time, the discounter is working to turn around sales in its US Walmart business, which have fallen at existing stores for the past four quarters, chief executive Mike Duke said at the company’s annual shareholder meeting.
In setting out his vision for the next several years at the world’s largest retailer, Duke, who is in his second year at the helm, said the company needs to widen its price gap with competitors as the Internet helps consumers find bargains.
PHOTO: REUTERS
“We will win on price leadership and we will win big,” Duke told 16,000 cheering employees and shareholders assembled at the University of Arkansas’ basketball arena for the annual meeting, which doubles as a star-studded pep rally.
While employees were entertained by Oscar-winning actor Jamie Foxx and musicians such as Mariah Carey and Mary J. Blige, shareholders were given a new US$15 billion share repurchase plan that comes on top of US$10 billion in shares the company bought back in the past year.
However, that might not be enough for shareholders who have seen Wal-Mart’s stock stagnate and question whether it can retain shoppers won in the recession.
Wal-Mart shares fell 2.5 percent to close at US$50.40 on the New York Stock Exchange, but performed better than the Standard & Poor’s 500 Index, which dropped 3.4 percent due to weaker-than-expected payroll data and fresh concerns over Europe’s debt troubles.
“I don’t think the US$15 billion is enough at the moment,” Brian Sozzi, an analyst at Wall Street Strategies said. “The company simply needs to display to its shareholder base that it can execute on its sustainability message in the attempt to drive down costs and regain lost traffic, either through lower prices or improved merchandising in higher margin departments.”
Duke conceded the company, with US$405 billion in annual sales, has work to do, both in improving sales at its US discount stores and in increasing memberships and products at its Sam’s Club chain.
Internationally, where business units account for about one-quarter of total sales, “we need to continue to set an impressive pace of growth and have a constant emphasis on returns,” Duke said.
As part of that growth, Wal-Mart will add 500,000 jobs to a base of 2.2 million. Wal-Mart’s international business is growing at a much faster clip than in the US. The company already has 4,110 stores in 14 countries besides the US and is eyeing an entry into Russia.
As to the future of the US economy, Duke said the job market was still a concern for its customers.
“I would not say that I could predict that there will be any decline,” Duke said of the economy. “But I still sense a great deal of pressure on the customer base.”
The latest snapshot of the US jobs market was disappointing, with the government saying on Friday that the private sector hired fewer people than expected last month. Wal-Mart said it had received 13 million job applications at its US stores in the past two years.
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has appointed Rose Castanares, executive vice president of TSMC Arizona, as president of the subsidiary, which is responsible for carrying out massive investments by the Taiwanese tech giant in the US state, the company said in a statement yesterday. Castanares will succeed Brian Harrison as president of the Arizona subsidiary on Oct. 1 after the incumbent president steps down from the position with a transfer to the Arizona CEO office to serve as an advisor to TSMC Arizona’s chairman, the statement said. According to TSMC, Harrison is scheduled to retire on Dec. 31. Castanares joined TSMC in
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the