SLOWDOWN: The company will build fewer stores, and new centers will be smaller. By Marcus Kabel THE ASSOCIATED PRESS The world’s largest retailer is going on a diet. Wal-Mart’s share price took a hit from the slowdown in growth plans. But some analysts welcomed the move to focus on keeping more of the cash Wal-Mart generates rather than spending furiously on new stores. Increased free cash flow, or the money left over after a company pays its expenses including capital expenditures, could make Wal-Mart shares more attractive by funding higher dividends, new technologies or acquisitions, analysts said. “Strong free cash flow is the key to corporate flexibility and potential growth. The highest quality companies, in my opinion, are able to self-finance their future growth from their free cash flow,” said Patricia Edwards, managing director and retail analyst at Wentworth, Hauser and Violich in Seattle, which manages about $12 billion in assets and holds about 35,700 Wal-Mart shares. Wal-Mart said sales will continue to slow after years of strong double-digit growth. The retailer is struggling on several fronts. Its apparel and home decor businesses are still trying to find the right mix of merchandise. It’s also finding fewer places to build new stores, and it faces tougher competition from other retailers. Schoewe said sales growth will fall to 9percent this fiscal year from nearly 12 percent the year before and then be between 5 percent and 8 percent the next two years. Wal-Mart’s fiscal year runs through January. Schoewe said Wal-Mart is focused on using the tremendous cash flow generated by its U.S. and international stores more efficiently, including building fewer giant Supercenter stores and managing corporate costs better. Wal-Mart’s annual square footage growth will decline from 8.8 percent last year to around 6 percent this year and between 5 percent and 6 percent in the next two years, Schoewe said. In terms of Supercenters, the flagship of Wal-Mart’s U.S. business, executives said the retailer will build 195 this year, about 170 next year and 140 the following year, compared with a historical standard of around 280 a year. Capital expenditure will be between $13.5billion and $15.2 billion in the next two fiscal years after about $15 billion this year. 160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! AD Quality Auto 360p 720p 1080p Top articles1/5READ MOREGame Center: Chargers at Kansas City Chiefs, Sunday, 10 a.m.Beset by shrinking sales growth, Wal-Mart Stores Inc. said Tuesday that it plans to build fewer and smaller stores as it cuts costs to help shore up profits. For the second time this year, Wal-Mart is trimming plans for capital expenditures to about $15billion from a June forecast of $15.5 billion in the face of continued decline in sales growth, Chief Financial Officer Tom Schoewe told investors and analysts at a conference. The original projection was $17 billion. Such efforts come as Wal-Mart’s customers are confronted with mounting financial worries that include not only higher food and gas prices but in recent months a widening credit crunch, which has hurt their ability to spend. “No doubt that our work has been made more difficult by the current economic environment,” said Eduardo Castro-Wright, head of Wal-Mart’s U.S. stores. He noted that Wal-Mart should be able to win by offering compelling merchandise and pursuing hot merchandising categories. The average size of new Supercenters will fall from nearly 195,000 square feet this year to around 180,000 in the next two years, operations executive Bill Simon added.