By Jessica Wohl
FAYETTEVILLE, Arkansas (Reuters) - Wal-Mart Stores Inc
The share buyback, disclosed at the retailer's annual meeting on Friday, replaces an identical one announced at the annual meeting a year ago, of which about $13 billion has been used. The new buyback amount equals roughly 8 percent of the company's market capitalization of $189 billion.
Wal-Mart is looking for sales in all the places consumers shop -- online, stores large and small and international markets such as Africa -- since the company has suffered two years of declining sales at existing U.S. stores.
Chief Executive Officer Mike Duke said fixing the U.S. business, which has lost bargain-seeking customers to dollar stores, is still the company's "greatest priority."
"While we have a long way to go, we're on the right track," Walmart U.S. Chief Executive Bill Simon said at Friday's annual meeting, which doubles as celebrity-infused pep rally for about 14,000 employees and was hosted this year by Hollywood actor Will Smith.
Wal-Mart shares were up 13 cents at $53.68 in afternoon trading.
"We don't think people should be buying into the stock now," said Edward Jones analyst Matt Arnold.
But if an investor already owns the stock, he can hold onto it and wait for the economy to improve enough to give Wal-Mart's core customer a chance to recover, he added.
TRYING TO REIGNITE THE U.S. BUSINESS
Friday's U.S. employment report is going to make Wal-Mart's job in its home market even more difficult. The U.S. jobless rate rose to 9.1 percent from 9 percent; economists had expected a drop to 8.9 percent.
The core low and middle-income shoppers who visit Walmart stores are feeling the impact of higher gas and food prices. While the company is trying to work with suppliers to keep a lid on its prices, some items, such as jeans, are now more expensive after a commodities rally pushed up costs in 2010.
Wal-Mart is likely to run out of space for U.S. super-centers in the next decade and is being "smart" by opening smaller U.S. stores and making a bigger international push, said Natalie Berg, global research director for retail research firm Planet Retail, who attended Friday's meeting.
Wal-Mart shares have underperformed the larger market. Through Thursday, the stock was up 6.3 percent since the 2010 annual meeting, well below the 23.3 percent increase in the Standard & Poor's 500 index <.SPX> over the same period.
The family of founder Sam Walton, including current Chairman Rob Walton, owns about 48 percent of Wal-Mart stock and its stake will increase as Wal-Mart buys back shares. Wal-Mart said it would keep its board independent, even if the family gains majority ownership.
In March Wal-Mart raised its annual dividend to $1.46 a share from $1.21.
While business at the smaller international and Sam's Club units has largely hummed along, Wal-Mart is still recovering from missteps, such as removing some items from its U.S. discount stores and focusing on short-term deals rather than everyday low prices. It has been bringing back items, first in food and other consumables, and has gone back to emphasizing low prices to more effectively compete with dollar stores.
The big question on most minds is whether U.S. strategies, including bringing back more merchandise and opening smaller Walmart Express stores, will work.
"Over time, if the lower-income consumer comes back, that's a powerful tide that should move the stock higher," Arnold said.
The Walmart Express format -- modeled after smaller stores operated outside the United States -- makes its debut in rural Gentry, Arkansas, this weekend. Stores in North Carolina and Chicago will follow later this year.
Wal-Mart's annual meeting is attended by investors and Wall Street analysts, but is largely a staged showcase to energize the company's employees, known as associates.
Associates came from across the United States, Canada, China and other countries to attend the meeting. They pack hotels and even stay in dormitories at the University of Arkansas.
Chinese associates lined up at Wal-Mart's home office in nearby Bentonville this week just to take a picture with a wall mural that shows "Mr. Sam," the company's founder, Sam Walton.
Also joining the fray this year were Massmart Holdings Ltd
Massmart Chairman Mark Lamberti and CEO Grant Pattison were introduced to the crowd packed into the Bud Walton arena on the university campus on Friday morning.
While vuvuzelas played from the South Africa part of the crowd, the biggest noise early in the morning came from thousands who cheered when Smith, who called himself "Will-Mart," was introduced as the emcee.
American Idol winner Scotty McCreery and singer Alicia Keys also performed. The band Black Eyed Peas closed out the meeting
by playing a few of their hits. Singer Fergie also took a moment to thank Wal-Mart for still selling albums, or CDs.
(Additional reporting by Brad Dorfman; editing by Dave Zimmerman, Steve Orlofsky, John Wallace and Andre Grenon)
