Wal-Mart Keeps Rolling; Dubai Dan Pulls Italian Job

Good news at most retailers nowadays is when sales merely decline less than expected.

But as the market stood at less than half of its October 2007 peak and company after company announces cuts in dividends, Wal-Mart Stores Inc. keeps trucking along bucking both trends.

The Bentonville retailer hammered expectations for February same-store sales, announcing a 5.1 percent increase at its U.S. stores on March 5 versus its own quarterly guidance of zero to 2 percent growth and analyst predictions of 2.4 percent.

An hour later, Wal-Mart announced it was increasing its dividend by 15 percent for fiscal year 2010 to $1.09 per share from 95 cents per share in 2009. That amounts to $4.2 billion returned to shareholders.

CEO Mike Duke credited Wal-Mart’s increased free cash flow for the boost. Thanks to reduced capital expenditures as it slowed new store openings, Wal-Mart banked a record $11.99 billion in free cash flow during its FY09 ended Jan. 31.

“Our free cash flow remains strong enough to fund Wal-Mart’s growth around the world, make strategic acquisitions and fund returns to shareholders through dividends and share repurchases,” Duke said.

The 50 percent drop in fuel prices was credited for increasing traffic and average tickets, and a quick look at Sam’s Club numbers bears that out with dollars saved staying at Wal-Mart.

In the February year-ago period, Sam’s Clubs comparable sales were up 5.5 percent with fuel and 3.1 percent without. In February 2009, the numbers flipped with sales counting fuel increasing just 2.1 percent while sales excluding fuel jumped 5.9 percent.

Hendrix Outreach Leads To Italian-AWTC Accord
The Arkansas World Trade Center has hosted more than 18 ambassadors, counselors and trade ministers over the last year including representatives from Germany, India, New Zealand and Brazil.

On Feb. 11, the CEO of the World Trade Center in Pescara, Italy, signed a cooperative agreement with AWTC CEO Dan Hendrix. Hendrix laid the foundation for the agreement in Dubai at a November conference that hosted more than 500 representatives from WTCs around the globe.

Hendrix met Pescara rep Massimo Gaspari and invited him back to Northwest Arkansas. Nicola di Mascio, CEO of the Pescara WTC, met Hendrix two years ago and made sure Gaspari sought him out in Dubai.

Gaspari visited for a couple days in December and called Northwest Arkansas a “very well kept secret.” Gaspari, who’d lived in Canada for several years, said he’d previously only associated Arkansas with Wal-Mart and was surprised to see Tyson Foods Inc. and J.B. Hunt Transportation Services Inc. headquarters as Hendrix drove him around.

The memorandum of understanding extends between the AWTC and all the Italian branches of the WTC. Hendrix said Arkansas exported around $43 million worth of goods to Italy last year, mainly food, industrial and paper products.

“This will expand opportunities for Arkansas to expand their markets to the entire country of Italy,” Hendrix said.

Pescara, about 120 miles east of Rome on the Adriatic Sea, is a production center for food and clothing. Versace and Dolche & Gabbana are made there in addition to tomato sauces and pastes already on Wal-Mart shelves.

“We have a lot of companies in the food industry who make high quality products who are interested in entering the North American market, the U.S. in particular and of course Wal-Mart,” Gaspari said.