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Walmart Posts Record Q1; CE Results Mixed

6/07/2010 12:01:00 AM Eastern

BENTONVILLE, ARK. — Wal-
Mart Stores reported record fiscal first quarter
sales and earnings for the period
ending April 30.

Net sales rose 6 percent to $99.1 billion,
including a $2.5 billion benefit from favorable
exchange rates, while income from
continuing operations edged up $300 million,
to $3.3 billion year over year.

In the U.S., operating income rose
5.6 percent to $4.6 billion at Walmart
stores while comp-store sales declined
1.4 percent due to soft traffic, partially
off set by an increase in average ticket.

Comps increased 0.7 percent at Sam’s
Club excluding fuel, and operating income
grew 9.2 percent to $429 million as the division
leveraged operating expenses.

In a pre-recorded announcement,
Mike Duke, president/CEO of Wal-
Mart Stores, acknowledged that “A number
of economic pressures, including gas
prices and ongoing concerns about unemployment,
continue to affect key segments
of retail, and this is especially true
for Walmart’s core customer.”

Within CE, vice chairman Eduardo
Castro-Wright reported lower comps
on mixed results. Large-screen TVs, including
new LED models, continued to
show strength, as did laptops and wireless,
while sales of video game hardware
and software fell below expectations
across all platforms due to fewer
new releases and a “lack of innovation
in gaming systems,” he said.

Castro-Wright added that CE sales are
benefitting from a store remodeling program,
and that more than 550 Walmart
locations would be upgraded this year.

CE was also constrained at Sam’s
Club, albeit due to industry-wide shortages
in flat-panel TV and the chain’s
transition to new models and technologies,
including backlit LED. Brian
Cornell, president/CEO of the warehouse
club division, said next-generation
products from LG, Samsung and
Vizio are now arriving, and Sam’s Club
is experiencing improved performance
and good market demand for CE.

Additional reporting by Alan Wolf