By Lisa Johnston
New products on display at the American International Toy Fair, held in N
BENTONVILLE, ARK. — Wal-Mart reported higher net income and sales in its fourth quarter, ended Jan. 31, and a bigger share of the CE business.
Net income rose 7.9 percent to $5.6 billion and net sales increased 3.9 percent to $127.1 billion for the giant retailer. Same-store stores edged up 1 percent, thanks partly to CE comp and share gains in the U.S.
In the U.S., sales at flagship Walmart stores increased 2.6 percent for the quarter, to $74.7 billion, and comp sales increased 1 percent excluding gasoline sales, due in part to a 50-basis-point gain in CE share, as measured by The NPD Group, and an increase in average ticket of 1.1 percent. For the full year, sales rose 3.9 percent to $264.2 billion, and comps increased 1.8 percent.
Walmart U.S. president/CEO Bill Simon said the CE share gain came despite a mid-single-digit decline in category comps, pointing to continued overall deflation in the industry and the conversion to digital. “These results were balanced by strong performance in tablets and wireless,” he noted, with mobile comps growing double digits with the additions of the iPhone 5 and the Samsung Galaxy S II smartphones to its prepaid Straight Talk program.
Simon noted that sales in late January and February were slower than planned due in large part to the delay in income tax refunds. Simon and other senior executives had been quoted in leaked emails and memos attributing weak January and February sales to the refund delay and higher payroll taxes.
Said Wal-Mart Stores president/CEO Mike Duke, “Walmart U.S. is as strong as it has ever been, and we continue to build on that position. We have positive comp performance and grew market share in a number of categories, and I fully expect that trend to continue in this new year … Our EDLP [everyday lowprice] promise — along with the broad assortment — is the key to driving sales. Strong merchandising, efficient operations and thoughtful use of capital will keep Walmart U.S. strong into the future.”
At Sam’s Club, fourth-quarter sales increased 3.4 percent to $14.5 billion and comps climbed 2.3 percent excluding fuel, buoyed by a low-single-digit gain in CE comps and a 20-basis point gain in wireless share, according to NPD data. For the full year, sales rose 4.9 percent to $56.4 billion and comps climbed 3.6 percent.
Rosalind Brewer, president/CEO of the wholesale club division, acknowledged that “Sam’s Club invested in price and had one of the best holiday offers in retail” during Q4, including leading brand items such as Samsung’s Galaxy S III and the iPhone 5 smartphones.
She added that “great prices” drove double-digit unit sales of Apple iPads and that TVs with displays of 70 inches or larger performed “successfully.”
Conversely, Sam’s Club saw “significant declines” in office electronics, video games, movies and music, as consumers continued to “shift to digital consumption for these products,” she said.
For the full year, Wal-Mart’s profits increased 7.8 percent to nearly $17 billion and net sales rose 5 percent to $466.1 billion.
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.