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Will Wal-Mart Sales Recover in the Fourth Quarter?

NEW YORK ( TheStreet) -- Wal-Mart's (WMT - Get Report) CEO Mike Duke forecasts U.S. sales will turn positive in the fourth quarter. But just how likely is a sales recovery?

Duke gave his prediction during Wal-Mart's annual meeting taking place in Bentonville, Ark., on Wednesday. Duke said same-store sales are a "critical priority" for the company and he is confident in U.S. business plan.

So just how will Wal-Mart revive five consecutive quarters of declining sales? Well the answers weren't exactly revelatory.

Bill Simon, the new head of the U.S. division, laid the groundwork during his presentation at the annual meeting. The first order of business - restocking items removed amid Wal-Mart's Project Impact initiative. Limiting customer choices, which the company believed would boost profits, actually had a negative effect.

Wal-Mart is now in the process of bringing back merchandise and growing categories like apparel and home goods, two divisions it shrunk significantly amid the recession. The retailer will go back to providing apparel basics and offer more plus sizes.

The company is also bringing back "Action Alley," which is wide aisles filled with discount merchandise. This was another element eliminated amid its Project Impact initiative.

The discount giant is also hoping the holiday season will provide an added boost, though Simon warned shoppers will be more focused on essentials, especially for adults. For this reason, Wal-Mart is looking to sales of children's items, like toys, creating a specialized display called "Santa's gift shop" for the category and rolling out aggressive discounts on must-have merchandise.
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