Wal-Mart Stores has not enjoyed the smoothest ride since the bull market began in 2009. Although it closed at an all-time high of $81.21 in December, shares have since fallen 6.4 percent. What’s more, investors have only enjoyed an average annualized return of 10 percent over the last five years, compared with 20 percent for the broader market.
CEO Doug McMillon, who took the helm on Feb. 1, has a range of issues to address. Wal-Mart’s U.S. discount division has reported four consecutive quarters of declines in a key revenue yardstick. One of his major initiatives is to speed up growth plans for the company’s smaller stores that cater to shoppers looking for more convenience with fresh produce, meat, and household and beauty products.
The retailer plans to open 270 to 300 small stores in the current fiscal year – double its initial forecast – adding to its 346 Neighborhood Markets and 20 Wal-Mart Express locations. The expansion of smaller stores now outpaces the growth of its supercenters.
Financial analysts are split on the stock but maintain an average price target of $81.55.Associated Press