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Walmart Posts Record Q1; CE Results Mixed

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 offset 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