Walmart U.S. Comp Sales Flat, Neighborhood Market Sales Strong

neighborhood-market-chicago_129852273128460201

In its second quarter, the U.S. division of Wal-Mart Stores Inc. reported a net sales increase of 2.7 percent to more than $70 billion. Comparable-store sales in its U.S. division were flat during the 13-week quarter, which ended Aug. 1.

Walmart’s smaller format Neighborhood Market stores turned in comparable sales growth of 5.6 percent. Comparable store traffic grew 4.1 percent in those stores.

The Bentonville, Ark.-based mega-retailer opened 22 Neighborhood Market stores during the second quarter and expects that for the full fiscal year it will open about 200 new locations under that banner.

Walmart International’s net sales increased 3.1 percent to $33.9 billion.

Global e-commerce sales increased 24 percent.

“As it relates to the positives from the quarter, I’m encouraged by the performance of our international business, our Neighborhood Market sales in the U.S. and by our e-commerce growth,” said Doug McMillon, Wal-Mart Stores Inc. president and CEO.

Consolidated net sales were $119.3 billion, an increase of 2.8 percent vs. the same period a year ago. The company said membership and other income increased 8.2 percent vs. last year. Total revenue was $120.1 billion, an increase of approximately $3.3 billion, or 2.8 percent.

Sam’s Club comparable-store sales without fuel were flat. Membership income growth grew 11.9 percent during the quarter.

Total earnings per share from continuing operations (EPS) is $1.21 vs. last year’s $1.23.

“As it relates to our challenges in the quarter, we wanted to see stronger comps in Walmart U.S. and Sam’s Club, but both reported flat comp sales,” McMillon said. “Stronger sales in the U.S. businesses would’ve also helped our profit performance.”

Walmart revised EPS for the full year downward, expecting it to range from $4.90 to $5.15 vs. the previous guidance of $5.10 to $5.45.

Reasons given for the adjustment include higher health care costs in the U.S. than the company anticipated and investments in e-commerce.

“We see opportunities to improve in merchandising, pricing and store level service in our supercenters, and we are working to close those gaps,” McMillon said. “Our investments in e-commerce and mobile are very important, as the lines between digital and physical retail continue to blur. Our customers expect a seamless experience, and we’re working to deliver that for them around the world.”

For the 13-week period ending Oct. 31, 2014, Walmart U.S. comp-store sales are expected to be relatively flat. Comp sales in the year-ago period declined 0.3 percent.

Sam’s Club comp sales for the third quarter, excluding fuel, are expected to be slightly positive. Last year, its comp sales, excluding fuel, increased 1.1 percent during the same period.

About The Author

Related posts

Leave a Reply

Your email address will not be published. Required fields are marked *