Shares of Wal-Mart Stores Inc. hit an all-time trading high Wednesday as investor hopes for the retailer grew on new leadership and the holiday shopping season ahead.
The company said Monday that Doug McMillon, head of Wal-Mart's international division, will succeed CEO and President Mike Duke when he steps down on Feb 1. McMillon, a 23-year company veteran at age 47, is expected to inject a youthful spirit into the company as it tries to attract a younger generation of shoppers.
Wal-Mart is making the move amid some challenging times for the world's largest retailer. Its low-income shoppers in the U.S. are struggling with stagnant wages and rising costs. At the same time, Wal-Mart faces fierce competition from online competitors and dollar chains that offer convenience and lower prices, as well as some image issues.
But investors also have high hopes that Wal-Mart will prove triumphant during this holiday season, which is expected to include intense competition and discounting at most retailers.
Janney Capital Markets analyst David Strasser said many retailers are facing tough times but that Wal-Mart "smells blood" and has made very aggressive holiday promotion plans. This includes big discounts and a new guarantee that if an item sells out within the first hour of Thanksgiving evening, shoppers can buy a card that guarantees them the item before Christmas.
"This year is different than past years," Strasser wrote in a note. "The promotional changes are real, and dramatic."
Strasser noted that some Wal-Mart Supercenters had as many as 40 trailers of merchandise behind the stores with extra inventory. He believes the company's promotions will be good enough that shoppers will buy big this holiday season but the heavy discounting could hurt profits across the whole sector.
Shares of Wal-Mart increased 18 cents to $80.86 by afternoon trading. Its stock hit $80.96 earlier in the day, an all-time trading high. Wal-Mart shares are up 18 percent for 2013.