Wal-Mart beats Street as profit jumps on strong sales
Bentonville, Ark. -- Wal-Mart Stores Inc. reported a better-than-expected 9.2% increase in first-quarter profit on increased sales in the United States and a strong performance abroad.
Wal-Mart earned $3.74 billion in the quarter ended April 30, 2012, up from $3.39 billion in the year-ago period.
“Our overall performance reflects the success of Walmart's business model: driving the productivity loop, leveraging expenses and investing in price leadership,” said Mike Duke, Wal-Mart's president and CEO. “We believe that the momentum throughout our business positions us very well for the rest of the year.”
Net sales, excluding membership fees from Sam's Club, rose 8.6% to $112.2 billion. Analysts had expected sales of $110.5 billion. The chain’s namesake U.S. stores had a 2.6% increase in same-store sales—their best showing in three years. Same-store sales at Sam's Club outlets were up 5.3%.
During the 13-week period, both traffic and ticket rose for Walmart U.S. All merchandise units delivered comparable sales growth for the quarter, the company said, with the exception of entertainment. The chain’s results came after it increased its product selection, bringing back some 10,000 goods to its shelves, and bringing back such general merchandise categories as fishing.
“Our merchants are focused on increasing sales through the right assortment at the right time and for the lowest price,” said Bill Simon, Walmart U.S. president and CEO. “We will continue to invest in price to lower costs for our customers by enhancing leverage initiatives and managing expenses.”
In a call with reporters, Wal-Mart executives said apparel, which has long been a weak spot for the retailer, posted its first comparable-store sales increase in six years. CFO Charles M. Holley Jr. said that the company’s focus on cheap prices had helped, and that women’s workout apparel, jeans and intimate wear were popular.