Wal-Mart Shares Jump on Spending Plan

The move is expected to reduce Wal-Mart's capital expenditures this year to $15.5 billion, down from the previously projected $17 billion.

"The stock buybacks come at a time when cash flow creation is not what is was, so they are going to have to make big compromises in order to reward shareholders and buy back stock," points out Richard Hastings, senior retail sector analyst with Smyth-Bernard Sands.

Wal-Mart said it is working on improving store productivity through a three-year plan being implemented by U.S. chief Eduardo Castro-Wright.

"Through our strategy, we are pursuing high return opportunities by focusing on markets where our customer segmentation approach offers the best opportunity to create a more competitive position for Wal-Mart and drive higher comparable store sales," said Castro-Wright in a statement. "In addition, our U.S. plan includes a variety of initiatives designed to improve labor productivity and enhance margins."

The company is also trying to reduce so-called cannibalization by tightening its real estate standards.

Wal-Mart also elected new directors to its board, including former J.C. Penney Chairman and CEO Allen Questrom. Brian Sozzi, equity research analyst at Wall Street Strategies, sees Questrom's addition as a positive step.

"For Wal-Mart, granted he would not have involvement in day to day operations, but I believe he brings deep merchandising knowledge, specifically on the apparel front," he says. "Any help Wal-Mart could get on apparel would be welcome, especially if they look to add private labels, a la Target (TGT Quote) and J.C. Penney."