Wal-Mart beats forecast but still wary about economy
GDA Staff -- Gifts & Dec, May 18, 2010
Bentonville, Ark. – Walmart’s U.S. home business was a mixed bag during the first quarter, as the retailer’s core customer continues to hold back on discretionary spending, executives said in remarks about the quarter’s results.
Home categories showing “momentum” during the quarter were outdoor living, bedding, home management and food preparation, according to Eduardo Castro-Wright, vice chairman.
The Walmart shopper, he said, is still hurting.
“Rising gas prices and high unemployment levels continue to be the most pressing issues for our core customer,” said Castro-Wright, citing a correlation between store comps and unemployment.
“Stores in areas with the highest increase in unemployment are running approximately 200 basis points lower comps than those with the lowest,” he said. He said the use of food stamps and other assistance funds increased significantly compared to last year.
Nonetheless, the company beat expectations with earnings per share of 88 cents, up 14% from the year-ago period. Total sale rose 6% to $99.1 billion.
Sales at U.S. stores nudged up 1.1% to $62.3 billion, and Sam’s Club sales increased 4.6% to $11.7 billion. Most of the growth took place in the international division, where sales jumped 21.4% to $25.0 billion.
Comps at U.S. stores slipped 1.4%. Merchandise comps at Sam’s Club were up 0.7%.
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