Walmart forecast gain despite crisis

Wal-Mart Stores Inc executives expect the company to report sales growth in the next year and gain market share, even if they cut spending plans to survive what might be a deep global recession.

The world's largest retailer said that sales growth this year would be at the high end of its earlier expectations. It expects growth next year to be roughly in line with previous predictions.The forecasts made took into account the recent financial markets crisis and credit crunch.

Wal-Mart shares jumped 11 percent to close at $55.10 in a broad market rally.

"In a time of great economic uncertainty, this company is well positioned to succeed in the future and in the short term," said Chief Executive Officer Lee Scott at the company's meeting with analysts, which was broadcast over the Internet.He said that after the economy heals, the retailer would emerge as a "tougher" competitor.

Cutting spending plans for some years

To manage the slowdown, Wal-Mart cut capital spending plans for this year and next. It is pulling back on opening big new stores in the United States and will instead remodel existing locations or open smaller stores across the globe.

"Remodels are taking center stage," Eduardo Castro-Wright, head of Wal-Mart's U.S. division, said on Monday.

Tom Schoewe, Wal-Mart Chief Financial Officer said that the retailer's total capital spending for the current fiscal year ending January 31 is predicted to be about $13 billion. He forecast sales growth of 8 percent this year and 5 to 7 percent next fiscal year. It previously told analysts it expected growth of 5 to 8 percent in each of those years.

"Wal-Mart seems to have the right model at the right time," said Sarah Henry, an analyst with MFC Global Investment Management, which owns Wal-Mart shares. "Shoppers are shopping on value overwhelmingly and I think that is what Wal-Mart really owns at this point."