Walmart's (WMT) Lee Scott: Maybe A Keeper?

Two weeks ago I wrote, in a post about Walmart "Maybe we could take some of the $7 plus billion you are sitting on and buyback a meaningful amount of shares? WalMart (WMT) is increasing cash at an over a billion dollar a year pace and last year spent just over that on share buybacks. It would appear folks at Walmart felt the same way as today the board announced a new $15 billion share repurchase plan that replaces the existing $3.3 billion one. In that post I said that CEO Scott just wasn't "getting it" and had to go. Seems like he may be turning thing around.



A couple of weeks ealier I wrote "There seems to be a trend recently in former high flyers like Wal-Mart (WMT), Starbucks (SBUX) and now Home Depot (HD) to not fully recognize that they cannot continue to just grow and grow to get results. There comes a point in time where you begin to just cannibalize your own customers. Rather than focusing on their current locations and improving them and their customers experience in them, they still have an almost myopic focus on more locations. All three are experiencing discontent among many of their core customers as they have felt “neglected” or taken for granted and are leaving for competitors like Target (TGT), Dunkin’ Donuts, McDonald’s (MCD) and Lowes (LOW) whothey feel more appreciated by, who have grown smarter, and have retained what made them popular. As a result, all three are experiencing difficulty and an onslaught of negative sentiment."

Again board does agree as it was announced that they are scaling back their expansion plans from 250 to 270 stores a year to an average of about 170 a year for the next 3 years, reducing capital expenditures to about $15 billion in 2008.

Now the saving will allow Walmart to fund the buybacks and spend more time enhancing our shopping experience. A novel idea.. Details are still seeping out of the meeting so it remains to be seen exactly how soon the shares will be repurchased so final judgment will have to be left until we know all.

Seems like 'Ole Lee may be getting with the program. Maybe he'll turn out to be a keeper.