LITTLE ROCK — A Wal-Mart Stores Inc. executive offered more details Tuesday on the company’s plans to revive its U.S.-store sales, and an executive with rival Target Corp. outlined plans to double earnings over the next six to seven years.
Both executives spoke in Atlanta at a retail-industry summit hosted by New York-based International Strategy & Investment. Their presentations were carried live on the Internet.
Rosalind Brewer, president of Wal-Mart’s eastern U.S. division, said the company has developed “a pretty aggressive plan” to turn the U.S. business around after seven consecutive quarters of declining sales at stores open at least a year.
Her remarks expanded on those of the company’s chief merchandising officer, Duncan Mac Naughton, a day earlier on the firm’s intention to restore about 8,500 items previously removed from the store shelves.
“We’re reinvigorating our price position,” Brewer said. She said the move comes as higher commodity prices are pressing suppliers to raise the costs of their goods.
But she also said that, historically, as gasoline prices have risen, Wal-Mart’s customers focus more on stockup shopping trips, and higher income families shift some of their shopping to Wal-Mart.
“This is actually playing into our business model,” she said.
Brewer said the company also is refocused on its store of-the-community strategy, tailoring the product lineup to regional shopping preferences by restoring items such as fabrics and crafts as well as fishing gear in some areas.
“We’re committed. No snow boots in Miami,” shesaid.
For “action alley” aisle displays featuring special deals, Brewer said, 30 percent of the items will be selected by store managers. Some space currently used for electronics will shift to apparel, she said.
Douglas Scovanner, executive vice president and chief financial officer at Target, said he anticipates that, over the next six to seven years, the company’s sales will increasefrom $66 billion to $100 billion and that earnings per share will double to $8.
He said the company’s 5 percent “rewards” program for its credit and debit Red Cards has resulted in a “huge number of new accounts.”
“This program is uniquely appealing to the best slice of our households,” Scovanner said. “It is a distinctly higher than-median household income group.”
Target’s pending move into Canada, announced in January, will create “head winds” to earnings growth in the early stages, he said, but ultimately will boost the company’s performance. Target bought up to 200 leases from Canadian retailer Zellers for $1.8 billion.
Target will have 100 to 150 stores operating quickly, Scovanner said, with the 100 premier locations expected to exceed the average U.S. store performance.
Wal-Mart’s stock closed Tuesday at $53.52 a share, up 70 cents, or 1.33 percent. It has traded between $47.77 and $57.90 in the past year.
Target’s stock closed $50.44 a share, up $1.18, or 2.4 percent. It has traded between $48.23 and $60.97 in the past year.
Business, Pages 25 on 04/13/2011