Q1 Sales, Income Slip At Walmart But Home Advances

Wal-Mart Stores sales and revenues fell slightly in the first quarter, and earnings stumbled more substantially. Income from continuing operations attributable to Walmart slipped to $3.34 billion, or $1.03 per share, from $3.59 billion, or $1.11 per share in the prior-year quarter, the company reported.

A Thomson Reuters analyst average estimate called for earnings of $1.04 per share.

Without volatile fuel sales included, Wal-Mart comparable store sales in the United States advanced by 1.1% and those for Sam’s Clubs gained 0.4%.

In a conference call, as transcribed by the company, Greg Foran, president of Walmart U.S., said, “Indoor home categories with key items and investments in opening pricepoints drove momentum.”

Foran pointed out that Neighborhood Market stores fared particularly well in the first quarter, with traditional format store comps up 7.9%. He also noted that labor action and ensuing congestion at West Coast ports had cost the company in some electronics categories, including televisions.

At Sam’s Club, said Rosalind Brewer, president of that division, comparable store sales in the home department advanced in the low single digits. Outdoor was off to a slow start in the quarter due to the late spring, but housewares segments, in aggregate, enjoyed double-digit comp growth, she said.

Wal-Mart posted net sales of $114 billion versus $114.17 billion in the year-earlier period, while revenues were $114.83 billion versus $115 billion in the quarter a year prior. Operating income was $5.68 billion versus $6.18 billion in last year’s quarter, the company maintained.

According to Wal-Mart, currency fluctuations and investments in associate wages and training, as well as e-commerce, had a negative impact on operating income.

Net sales in Walmart U.S. stores increased by 3.5% to $70.25 billion while those at Walmart International decreased 6.6% to $30.28 billion and those at Sam’s Club slipped 3% to $13.48 billion, the company related. However, operating income at all three divisions declined, by 6.8% at Walmart U.S. to $4.64 billion, by 11% at Walmart International to $1.07 billion and by 10.9% at Sam’s Club to $427 million.

Wal-Mart asserted that global e-commerce sales gained 17%.

Doug McMillon, Wal-Mart president and CEO, in announcing the financial results, characterized the first quarter as “solid,” adding, “We took some important steps to strengthen the foundation of our business for the future. We need to continue to get better at consistently running great stores, clubs and e-commerce everywhere we operate, and we are.”