Image: Performer Queen Latifah
April L. Brown  /  AP
Performer Queen Latifah hosts the WalMart shareholders meeting in Fayetteville, Arkansas.
updated 6/6/2008 4:33:05 PM ET 2008-06-06T20:33:05

Wal-Mart executives said Friday that a reinvigorated focus on price has allowed the world's largest retailer to beat out competitors in a challenging economic environment.

"We're winning in the marketplace. You should feel very proud," Eduardo-Castro Wright, president and chief executive of the U.S. division told cheering stockholders packed into the Bud Walton Arena at the University of Arkansas for the company's annual shareholder meeting.

He said at a time when Americans are struggling with higher food and gas prices, "price matters."

Looking at the 20 percent boost to company stock since last year, shareholders have much to cheer about.

Shares, which had been in the doldrums for several years, are now trading close to the top of the company's 52-week range after Wal-Mart began resounding the low-price mantra just as the economy hit the brakes.

But Wal-Mart did not change its outlook on the year as a number of analysts had expected, and shares fell in a bad day on Wall Street.

Shares fell as the Dow Jones industrial average fell broadly.

On Thursday, the retailer posted a better-than-expected 3.9 percent gain in same-store sales for May. The figure for sales at stores open at least a year are considered a key indicator of a retailer's health. The solid increase, boosted in part by the government stimulus checks being mailed out to Americans, followed the company's almost 7 percent gain in profits for the first quarter.

Chief Financial Officer Tom Schoewe told shareholders that the company has reduced capital spending, as it did last year, boosting both its cash flow and returns to shareholders. For this fiscal year, Schoewe said capital spending would likely be at the low end of a range of $13.5 billion to $15.2 billion.

Schoewe told shareholders that earnings have grown more quickly than sales over the past 10 years.

"It's obvious that the strategy we have in place to improve returns, to efficiently use our capital and improve our free cash flow is working," he said. "Our company is positioned extremely well. This is a time when our customers need us. We're there. We can continue this great story."

For the year ended Jan. 31, Wal-Mart, which generated sales of $374.53 billion, reported a 5.8 percent increase in profits and an 8.6 percent gain in sales.

Wal-Mart embarked on a multiprong marketing campaign focused on low prices, what it calls more environmentally sound practices, and more affordable health care for customers through a discounted prescription drug program.

"We have the best global footprint to serve millions worldwide who will want to lift themselves up into the middle class," CEO Lee Scott said.

Chairman Rob Walton told shareholders that the company remains devoted to the goals set forth by his father, founder Sam Walton, and dismissed critics who say that Wal-Mart has strayed from that vision.

He said Wal-Mart continues to offer products at low prices so that people can lead better lives.

Walton also said the company continues to evolve.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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