(Reuters) - Wal-Mart Stores Inc (WMT.N) has seen its small-format U.S. stores, called Walmart Express, become profitable in less than a year, Walmart U.S. Chief Executive Bill Simon said on Wednesday.
Walmart, best-known for large supercenters, opened its first Walmart Express store in Arkansas last June, part of its effort find new ways to reach areas of the country that are less suitable for “big box” stores. It now has about 10 of the stores in markets such as Chicago as well as rural spots in Arkansas and North Carolina.
“What we’re finding is that inside of 12 months they’re turning profitable. We didn’t actually project that,” Simon said at a Morgan Stanley conference in Boston. His comments were also broadcast over the Internet.
Simon was asked if there had been any impact on U.S. expansion plans following last month’s New York Times report that Wal-Mart de Mexico WALMEXV.MX, which is majority-owned by Wal-Mart, used illegal payments to win market leadership in that country and that top Wal-Mart executives knew about the matter and tried to cover it up.
“We have a robust real estate pipeline that’s already in place,” Simon responded. “We haven’t seen any impact like that in the U.S. to date.”
Shares of Wal-Mart were up 0.7 percent at $64.20 in afternoon trading. The shares are trading at their highest levels since April 2000 amid economic concerns, which often lead investors to look for safe-haven stocks.
Reporting by Jessica Wohl in Chicago; editing by Matthew Lewis