Walmart Posts Record Fiscal Q1

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Bentonville, Ark. - Walmart Stores reported record fiscal first-quarter sales and earnings for the period ending April 30.

Net sales for the first quarter of fiscal year 2011 were $99.1 billion, an increase of 6 percent from $93.5 billion in the first quarter last year. Net sales for the first quarter included a currency exchange rate benefit of $2.5 billion.

Income from continuing operations attributable to Walmart for the quarter increased to $3.3 billion, from $3 billion in the first quarter last year.

Mike Duke, Walmart Stores' president/CEO, said in a prepared statement, "Our customers, particularly in the United States, are still concerned about their personal finances and unemployment, as well as higher fuel prices. Our commitment to reducing prices and managing expenses positions us well across the retail landscape."

In the U.S., Walmart had operating income of $4.6 billion for the first quarter, up 5.6 percent from last year. Walmart U.S. comp-store sales declined 1.4 percent due to soft customer traffic, partially offset by an increase in average ticket, compared with the first quarter of fiscal year 2010.

Sam's Club delivered 0.7 percent comp-store sales without fuel for the first quarter. The clubs had strong sales from fresh foods and health and wellness categories, as well as home and apparel. Sam's Club leveraged operating expenses. Operating income grew at a faster rate than sales, increasing 9.2 percent to $429 million.

Walmart will continue to grow worldwide, with a significant number of store openings expected for the second and third quarters, the chain said.

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.

Conversely, high unemployment and reduced credit availability continue to pressure business club-members, resulting in soft demand for some office product categories, Cornell said. - Alan Wolf contributed to this story.


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