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Weather Dampens Wal-Mart's Q1 Results

Thursday May 15th, 2014 - 11:15AM


For the first quarter, Wal-Mart Stores, Inc. posted consolidated net income of $3.6 billion, down 5% from last year and earnings per share of $1.10 versus $1.14 in the 2013 period. Without the impact of fuel price fluctuations, comparable store sales for Wal-Mart stores in the United States were down 1.1% while those for Sam's Club declined by 0.5% for a company U.S. total combined comp of negative 0.2%.

A Zack's average analyst estimate for earnings per share was $1.15.

First quarter net sales were up 0.8% to $114.2 billion.

The company stated that EPS took a three-cent hit due to lower net sales and higher direct costs from the effects of severe weather. Sales suffered a negative impact of about $1.6 billion from currency exchange rate fluctuations, Walmart asserted, adding that net sales would have increased 2.1% to $115.7 billion without the effect.

Membership and other income gained 4.8% versus last year, and total revenue was $115.0 billion, up 0.8%, the company related. Operating income for Walmart U.S. was down 4.3% in the quarter to $4.98 billion, while that for the international division was up 3.4% to $1.2 billion. Without the impact of fuel price fluctuations, operating income at Sam's Club was down 1.4%.

"Like other retailers in the United States, the unseasonably cold and disruptive weather negatively impacted U.S. sales and drove operating expenses higher than expected," said Doug McMillon, Wal-Mart Stores, Inc. president and CEO, in announcing the financial results. "Walmart's underlying business is solid, and I'm confident in our long-term strategies. We'll continue to invest in price and enhance our service to improve sales. We remain focused on growth across the enterprise, especially in small formats like Neighborhood Market in the U.S."

In addition, Walmart noted, the company has continued its investment in e-commerce initiatives, including the global technology platform, and worldwide sales generated online rose approximately 27%.