Wal-Mart boosts image, stocks

FAYETTEVILLE, Ark. – Wal-Mart officials, bolstered by a rebounding stock price and improved image, told shareholders on Friday that their renewed focus on price and better merchandise is winning over customers who they expect to keep when the sluggish economy improves.

“All of this success feels good, doesn’t it? You bet it does,” H. Lee Scott, Jr., president and chief executive of Wal-Mart Stores Inc. told cheering stockholders packed into a University of Arkansas arena for the company’s annual meeting.

Still, Wal-Mart wants to play a larger role in addressing the financial challenges Americans face, store officials said. The retailer is striving for greater environmental sustainability and lower health care costs through its discount drug program for customers.

“We have the best global footprint to serve millions worldwide who will want to lift themselves up into the middle class,” Scott said. He said the company, which has changed its practices, is in a much better position to work with either presidential candidate to affect change.

“In the months ahead, the candidates are going to pay very close attention to voters who care the most about pocketbook issues. The fact is those are Wal-Mart customers,” Scott told investors.

He acknowledged that the company, which had been under attack on a variety of issues from labor infractions to lack of environmental awareness, had found itself playing catch-up at a time when “people’s expectations of us and of corporations in general changed.”

“We can never let that happen again,” Scott said. “Not only must we never fall behind … we must always push ourselves to stay ahead.

Now, looking at an almost 20 percent rise in company stock since last year, shareholders have much to cheer about.

Shares, which had been in the doldrums for several years, are now trading close to the top of the company’s 52-week range after Wal-Mart refined the “save money, live better” campaign, begun last year, as the economy hit the brakes.

Wal-Mart has benefited as Americans, squeezed by higher gasoline and food costs, tighter credit and a slumping housing market, try to shop at cheaper stores. The company, which had been bruised by unrelenting attacks by union-backed groups, has seen criticism diminish.

On Thursday, the retailer posted a better-than-expected 3.9 percent gain in same-store sales for May. The results excluded sales from fuel.

The figure for sales at stores open at least a year are considered a key indicator of a retailer’s health. The solid increase, boosted in part by the government stimulus checks being mailed out to Americans, followed the company’s almost 7 percent profit gain for the first quarter.

For the year ended Jan. 31, Wal-Mart, reported a 5.8 percent increase in profits on an 8.6 percent gain in sales to $374.53 billion.

Wal-Mart, whose sales slowed in recent years after a zigzag course between upscale and discount merchandise, is refocusing on price while finding the right mix of merchandise and marketing.

The company is also benefiting from cleaner stores, and friendlier and faster service, according to analysts. Meanwhile, it is embracing more environmentally sound practices, such as setting a goal of selling 100 million compact fluorescent light bulbs. It is also cutting health care costs for customers with a discounted prescription drug program the company claims has saved shoppers more than a $1 billion since launching two years ago.

Since announcing its goal to sell 100 million compact fluorescent light bulbs in November 2006, the company has actually sold 192 million bulbs, Scott said.