June 8, 2013 in Business

Wal-Mart announces stock buyback

Anne D’Innocenzio Associated Press
 

FAYETTEVILLE, Ark. – Wal-Mart’s biggest news at its annual meeting on Friday was that the world’s largest retailer will repurchase up to $15 billion of its shares at a time when the behemoth faces increased scrutiny from investors over its business overseas.

The buyback replaces the current $15 billion share repurchase program that Wal-Mart began in 2011. About $712 million is left under that program, according to the company.

The program comes as Wal-Mart encounters concerns over how it handled bribery allegations that surfaced last year at its Mexican unit. The company also is being pressured to increase its oversight of factories abroad following a building collapse in April in Bangladesh that killed more than 1,100 garment workers. Wal-Mart wasn’t using any of the factories in the building at the time of the collapse, but it is the second-largest retail buyer of clothing in Bangladesh.

During the annual meeting, shareholders in the audience presented four proposals that related to increasing governance of its board in light of the incidents overseas. They included a proposal for an independent chairman that doesn’t serve as an executive at Wal-Mart. None of those resolutions passed, according to a preliminary shareholder tally.

Executives referred to the problems Wal-Mart has been having abroad during the meeting.

“Our company was founded on integrity,” CEO Mike Duke said. “Make no mistake about it – we will do the right thing.”

Wal-Mart, based in Bentonville, Ark., is tackling tough ethical questions overseas as it also deals with growth problems at home. The retailer known of selling discounted home goods, clothes and groceries, is seeing signs that its low-income shoppers in the country continue to struggle.

While the company said its first-quarter profit edged up slightly, it reported its first decline in revenue at Wal-Mart’s U.S. stores open at least a year in seven quarters. Wal-Mart’s U.S. stores account for 59 percent of the company’s its total sales, which reached $466.1 billion for the year ended Jan. 31, excluding revenue from membership fees from its Sam’s Club division.

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