Walmart still can’t seem to find the handle for its CE business.
While the world’s largest retailer saw “some improving trends” in electronics at is U.S. flagship stores, the category continues to be what chief financial officer Brett Biggs described as “a sales headwind.”
The CE stagnation stands in sharp contrast with an aggressive, multiyear expansion under past category chief Gary Severson, who built up the one-time commodity business with premium brands and the latest technologies.
But since then the department has listed amid a succession of four merchandising chiefs over the past five years.
Biggs’ comments came with the discounter’s first-quarter earnings results, which are traditionally accompanied by a pre-recorded management discussion in which each division president provides a detailed accounting of the quarter.
This time out Biggs spoke for all, and provided significantly less color, offering no specifics on the improving CE trends and no mention at all of Sam’s Club’s merchandising.
The numbers, however, were generally positive, and following Macy’s reported underperformance, which sent shock waves through the retail sector, investors rewarded parent company Wal-Mart Stores for exceeding forecasts by sending shares up as much as 10 percent in pre-market trading.
At Walmart U.S., net sales were up 4.3 percent, to $73.3 billion; comp sales increased 1 percent — the seventh consecutive quarterly gain — with a 20-basis-point contribution from e-commerce; and store traffic rose 1.5 percent during the first quarter, ended April 30.
At Sam’s Club, net sales rose 1 percent, to $13.6 billion; comps, excluding gasoline, increased 2.9 percent, with a 60-basis-point contribution from e-commerce; and store traffic was flat.
Companywide, net sales rose 3.9 percent during the quarter, to $118 billion in constant currency, and net income fell 7.8 percent, to $3.1 billion, reflecting newly higher wages for U.S. sales associates.
Wal-Mart Stores president/CEO Doug McMillon added in the pre-recorded comments that global e-commerce sales grew 7 percent, which he deemed as “too slow.”