Wal-Mart, which announced booming profits only two days ago, surprised the markets yesterday by announcing that its chief executive is to be replaced.

Lee Scott, who has held the office for nearly nine years, said that at the age of 59 he planned to retire early next year. He will be succeeded by Mike Duke, who heads Wal-Mart’s international business. The changes will take effect on February 1.

The reshuffle comes at the peak of Wal-Mart’s success. The world’s largest retailer has been praised by Wall Street for its canniness at repositioning its business to thrive in the midst of the worst economic downturn in America since the Great Depression. On Thursday, Wal-Mart boasted that net profits during the three months to October had soared almost 10 per cent to $3.1 billion (£2 billion).

Mr Scott has been with the company for three decades. Under his leadership, Wal-Mart began to change its product lines two years ago to appeal to Middle America. It sought to attract wealthier customers with products such as cheap laptops and clothing.

The decision to move upmarket paid off as middle-income families across America began to struggle financially and were forced to become more thrifty. Hit by the plunging value of their homes, tightening credit conditions and the surging cost of petrol and food, Americans turned to discount retailers. Wal-Mart has become one of the few beneficiaries of the American downturn during a period when retailers such as Circuit City have filed for bankruptcy protection.

Wall Street analysts dismissed speculation that the timing of the reshuffle – on the eve of the busiest shopping period of the year – signalled that Wal-Mart was anticipating a poor season. The key shopping season kicks off next Friday – the day after the Thanksgiving holiday – when Americans traditionally turn out in force to the malls and begin their Christmas shopping. This year is expected to be the worst turnout since the recession of the early 1990s.

Joseph Feldman, a retail analyst with Telsey Advisory Group in New York, said: “It’s strange that he [Scott] didn’t want to get through the holiday season. But I don’t think it’s a sign that they’re going to have a lousy season.”

Mr Feldman added that at the company’s analyst meeting in October, there had been a sense that Mr Scott was saying farewell and “finally had the upper hand over Wall Street”.

Mr Scott joined the company in 1979 as an assistant director in the logistics division, rising to executive vice-president of logistics in 1993 and executive vice-president of merchandise in 1995. He became president and chief executive of Wal-Mart’s US division in 1998 and president and chief executive of the corporation in 2000. He will remain as chairman of the executive committee of the board and will be employed until 2011.

The retailer also promoted Eduardo Castro-Wright, 53, who heads its US operation, to vice-chairman, with immediate effect. Mr Feldman said that Mr Castro-Wright could be a chief executive candidate in future.

Shares in Wal-Mart rose by $2.26, or 4.5 per cent, to $52.92, valuing the company at about $208 billion.

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