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BENTONVILLE, Ark. -- Even though Wal-Mart Stores, Inc. reported record sales and earnings for the first quarter yesterday, president and c.e.o. Lee Scott said there "was an opportunity to have done better."
In a statement, Scott said, "Delivering on our mission -- saving people money so they can live better -- is more important than ever around the world."
Net sales for the first quarter ended Apr. 30 were $85.387 billion, an increase of 8.3 percent, the company said. Income from continuing operations for the quarter was $2.826 billion, an increase of 6.2 percent.
Sales increases were the greatest in Wal-Mart's international division. The group reported sales of $19.6 billion, an 18.5 percent jump from the same period a year ago.
For both the Sam's Club and Wal-Mart Stores divisions, meanwhile, sales were up 5.6 percent.
Same-store sales rose just 0.6 percent in the first quarter at Wal-Mart's U.S. stores, the weakest level since Wal-Mart started reporting the quarterly figure in 2003.
In a prerecorded conference call, Scott named three financial concerns that currently face Wal-Mart customers: general money or income worries; inflation's effect on consumers' budgets; and escalating prices at the gas pump.
Food and pharmacy sales increased steadily, according to Eduardo Castro-Wright, who runs the domestic Wal-Mart stores. However, sales in the apparel and home categories, two of the highest-margin segments for Wal-Mart, were weak. He also noted that shrinkage had risen.
In a research note, JPMorgan analyst Charles Grom said the company has confused buyers with its "Look Beyond the Basics" initiative that focuses on high-ticket items. "We feel Wal-Mart is sending a mixed message to its customer base today, which is partially to blame for its weak operating results... Is Wal-Mart still committed to its upscale merchandise initiative from 2006, or is the company re-focusing on price and value? We're confused and its customer is probably too."
The retailer remained cautious about the second quarter, forecasting earnings from continuing operations in a per-share range of 75 cents to 79 cents. Same-store sales are projected to rise 1 percent to 2 percent in the second quarter.