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Walmart Announces $11.8 To $12.8 Billion FY2015 Global Capital Expenditure Plan; Company Remains Focused On Comp Sales Growth, International Returns, Leverage Initiatives And Capital Discipline

Holley pointed out that the capital dedicated to technology and e-commerce is growing.

“Technology is our fastest growing area for capital expenditures,” he explained. “We define technology investments as systems and Global e-Commerce capital dollars. We will increase our technology spend 70 percent from fiscal year 2009 through fiscal year 2014. Next year, investments in this area will increase another 12 percent.

“Walmart plans to grow company net sales 3 to 5 percent in fiscal year 2015, which is projected to increase net sales by $14 to $24 billion. We expect to add another 33 to 37 million net retail square feet around the world next year,” Holley said. “In terms of leverage, our operating income will grow at the same rate, or faster, than sales due to our continued focus on operating expense discipline. Generating strong free cash flow remains a key priority.”

Capital Expenditure Details for Fiscal Year 2015

Projected capital expenditures are as follows and exclude the impact of future acquisitions:
 
Capital Expenditure Detail

(US$ billions)
Segment       Actual

FY 13
    FY 14

Original
    FY 14

Revised
    FY 15

Projected
Walmart U.S.       $6.0     $5.5 – 6.0     $6.0 – 6.5     $5.8 6.3
Sam’s Club U.S.       $0.9     ~$1.0     ~$1.0     ~$1.0
Walmart International       $4.6     $4.5 – 5.0     $4.0 – 4.5     $4.0 4.5
Corporate & support       $1.4     ~$1.0     ~$1.0     ~$1.0
Total       $12.9     ~ $12.0 13.0     ~ $12.0 13.0     ~ $11.8 – 12.8
                 

For fiscal year 2014, Walmart now expects to add approximately 34 million net retail square feet globally, compared to the company’s original square footage guidance, provided Oct. 10, 2012, of 36 to 40 million square feet. Today’s revision in projected retail square footage growth is driven by a reduction in new store openings within Walmart International, partially offset by an increase in Walmart U.S. new stores. In fiscal year 2015, the company plans to add between 33 and 37 million net retail square feet, reflecting aggressive growth across its businesses. Net retail square footage growth (excluding any future acquisitions) is projected as follows:
 
Net Retail Square Footage

(in millions)
Segment       Actual

FY 13
    FY 14

Original
    FY 14

Revised
   

FY 15

Projected
Walmart U.S.       14     ~15 – 17     ~18     ~19 – 21
Sam’s Club U.S.       1.1     ~1     ~2     ~2
Walmart International       19.4     ~20 – 22     ~14     ~12 - 14
Total       34.5     ~ 36 40     ~34     ~33 - 37
                 

Projected Walmart U.S. and Sam's Club U.S. units include new stores, expansions and relocations. Given the conversion of Walmart discount stores to supercenters, the number of supercenter units will continue to increase, as the number of discount stores declines. Unit growth in the United States is projected as follows:
 
Total U.S. Unit Growth

(Gross)
Segment       Actual

FY 13
    FY 14

Original
    FY 14

Revised
   

FY 15

Projected
Large formats       136     ~125     ~125     ~115
Small formats       79     ~95-115     ~120     ~120 - 150
Total Walmart U.S.       215     ~220-240     ~245     ~235 - 265
Sam’s Club U.S.       14     ~12-20     ~19 - 21     ~17 - 22
Total       229     ~ 232 - 260     ~264 - 266     ~252 - 287
                 

Walmart U.S. Details

Compared to last October’s forecast, Walmart U.S. increased its fiscal 2014 projected capital investment by $500 million to a range of $6.0 to $6.5 billion, due to an acceleration of small format openings, especially Neighborhood Markets, and e-commerce initiatives. As a result of this more aggressive plan, Walmart plans to end fiscal year 2014 with square footage growth of approximately 18 million net retail square feet versus its original projection of approximately 15 to 17 million square feet.

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