Walmart closing unprecedented number of stores

Walmart said it will close 269 stores worldwide this year, including many of its smallest stores, in an unprecedented move CEO Doug McMillon characterized as being more disciplined about growth.

Plans call for the company to close 154 locations in the U.S., including the company’s 102 smallest format stores, Walmart Express, which had been in pilot since 2011. Walmart said it will focus on strengthening its large format supercenters, optimizing Neighborhood Markets which average about 40,000-sq.-ft., growing the e-commerce business and expanding pickup services for customers. In terms of closures by format type, the company said the 154 U.S. locations consist of 23 Neighborhood Markets, 12 supercenters, seven stores in Puerto Rico, six discount centers and four Sam’s Clubs.

“Actively managing our portfolio of assets is essential to maintaining a healthy business. Closing stores is never an easy decision, but it is necessary to keep the company strong and positioned for the future,” said Doug McMillon, president and CEO of Wal-Mart Stores, Inc. “It’s important to remember that we’ll open well more than 300 stores around the world next year. So we are committed to growing, but we are being disciplined about it.”

Walmart alluded to the possibility of store closures last fall during its annual investor conference when analysts were informed of an active review of the retailer’s extensive real estate portfolio that include nearly 11,600 worldwide locations. The company said the stores that are closing represent less than 1% of global square footage.

Internationally, the company is applying the same disciplined growth philosophy and will close 115 stores, including 60 unprofitable locations in Brazil.

The combined U.S. and international closures will result in a big impact on fourth quarter profits scheduled for release on Feb. 18. The total fnancial impact of the closures is estimated to be approximately 20 to 22 cents a share with approximately 19 to 20 expected to impact the fourth quarter of fiscal 2016. The remainder of the impact will fall into the first half of fiscal 2017 which begins Feb. 1. Approximately 75% of the impact relates to U.S. closings and the remaining portion involves Walmart International, with a large majority of the international impact relating to the closures in Brazil.

Going forward, Walmart said its plans remain intact to open 50 to 60 supercenters and 85 to 95 Neighborhood Markets and 10 Sam’s Clubs during its 2017 fiscal year. Internationally, Walmart intends to open between 200 and 240 stores during the coming year.

A list of U.S. store closures is available by clicking here and scrolling down.