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Wal-Mart’s Q1 Sales, Earnings Flat

5/14/2009 10:36:00 AM Eastern

Bentonville, Ark. — Wal-Mart reported flat sales and earnings for its fiscal first quarter, ended April 30.

Net sales at the world’s largest retailer slipped 0.6 percent from the year-ago period to $93.5 billion, and net income was flat at $3 billion.

The company said sales and earnings were negatively impacted by currency fluctuations and the 2008 leap year, which resulted in one less selling day during the quarter.

Mike Duke, president/CEO of Wal-Mart Stores, said the company was pleased with its results given “a very challenging global economy.

“Our business overall is stable,” he said during a conference call, “but our customers are still concerned about economic issues. For the Wal-Mart customers, until unemployment eases and confidence really returns, we remain cautiously optimistic about the timetable for economic recovery.”

In the U.S., sales at the company’s flagship Wal-Mart stores rose 3.8 percent to $61.2 billion during the period and same-store sales increased 3.6 percent. Operating income rose 3.3 percent to $4.5 billion.

During the conference call, Eduardo Castro-Wright, vice chairman of Wal-Mart Stores, attributed Wal-Mart’s strong performance to lower fuel costs, improved merchandising systems, reduced inventory levels, store remodels, more efficient scheduling of in-store staff and strong online growth.

 At Sam’s Club, net sales slipped 1.4 percent to $11 billion, but same-store sales rose 4.2 percent excluding the impact of gasoline. Operating income was flat at $393 million.

During the call, Brian Cornell, Sam’s Club new president/CEO, said discretionary categories “continue to experience sales pressures. Big-ticket items continue to be challenged, with categories such as furniture, jewelry and electronics remaining areas where members are spending less. Office electronics, which includes laptops, was a notable exception, with strong comp sales for the quarter.”

Cornell also announced the promotion of home business head Linda Hefner to merchandising executive VP, and noted the recent appointment of Ignacio Perez as operations executive VP.

Looking ahead, the company expects same-store sales for both Wal-Mart and Sam’s Club to be between flat and 3 percent for the current 13-week period ending July 31, as its anniversaries the issuance of stimulus checks last year.

Final sales tallies will be reported with Wal-Mart’s second-quarter earnings on Aug. 13, as the retailer no longer reports its sales results each month.

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