Wal-Mart upbeat on Asia drive amid U.S. woes
Wal-Mart Stores Inc (WMT.N: Quote, Profile, Research, Stock Buzz), the world’s top retailer, is considering its first stores in Southeast Asia and expects to approach 10 percent growth in international sales to $100 billion this fiscal year despite a global economic slowdown.
The retailer, a perennial runner-up to Carrefour (CARR.PA: Quote, Profile, Research, Stock Buzz) in China in terms of sales and stores, is enjoying a huge leap in market share as it advances with a $1 billion acquisition of local chain Trust-Mart, expected to be fully completed by 2010.
The U.S. household name — which has roughly 2.1 million employees worldwide — is now looking to expand into Southeast Asia as U.S. consumers are squeezed by a soft housing market and tighter access to credit.
“I foresee international will outpace the U.S. in terms of percentage of growth. We should be approaching the $100 billion mark this year for international,” Asia CEO Vicente Trius, told Reuters.
Last month, Wal-Mart posted a 17 percent jump in second-quarter profit to $3.45 billion, on the back of a 17 percent increase in international sales to $25.26 billion.
But the discount retailer forecast current quarter results could miss Wall Street estimates as consumers worldwide deal with tough economic times $500 payday loan. Analysts said Wal-Mart’s third-quarter outlook was lower than some expected, and warned that tougher times could be ahead.
“Although the international business continues to expand its presence within Wal-Mart’s operations, a drop in inflation rates or a strengthening dollar coupled with more difficult comparisons in the second half of FY09 could start to hold down the accelerated pace in sales growth Wal-Mart has experienced during the 1st half of this year,” Credit Suisse analysts said in a research note.
On Wednesday, the U.S. behemoth opened its Asian regional headquarters in Hong Kong, which will oversee its business in Japan, India, and China.
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