You are here
While the world’s largest retailer posted a profit in the fourth quarter that beat Wall Street’s expectations, Wal-Mart Stores, Inc.’s same-store sales declined 1.6 percent vs. a 2.4 percent increase the prior year, during the all-important year-end holiday period ended Jan. 31, 2010.
For the full year, Wal-Mart’s same-store sales were flat compared with a 3 percent increase last year.
“I am disappointed that U.S. comparable sales were below expectations in the quarter,” Wal-Mart CEO Mike Duke said during a pre-recorded analysts’ call to discuss the Bentonville, Ark.-based retailer’s latest financial results. Calling the economy “a real challenge for many of our customers,” Duke cautioned that Wal-Mart’s first-quarter sales “will be difficult” due to tougher sales comparisons and ongoing price deflation in some of its key merchandise categories, including food and electronics.
Later during the same call, Eduardo Castro-Wright, vice chairman of Wal-Mart Stores, said the same-store sales decline was fueled by a slight drop in customer traffic as well as a decline in the total value of purchases that customers were making. Grocery and consumer electronics were affected the most by price deflation, while sales of health-and-wellness and pharmacy products were strongest.
In the near term, Wal-Mart officials expect first-quarter same-store sales from both its traditional and Sam’s Club stores to be flat in the plus-or-minus 1 percent range.
Same-store sales during the fourth quarter at the company’s Sam’s Club division rose slightly to 0.7 percent and were up 1.4 percent for the full year, although membership renewal rates continue to be flat during the first quarter.
Wal-Mart’s international operations, particularly Brazil and China, delivered the best performance in the quarter, with fiscal year progress up more than $100 billion in net sales and strong double-digit sales growth.
The retailer said profit climbed to $4.7 billion, or $1.23 a share, during its fourth-quarter ended Jan. 31.
Excluding certain one-time charges, Wal-Mart reported earnings of $1.17 per share. Analysts polled by Thomson Reuters, who typically strip out one-time charges, were expecting a profit of $1.12 a share for the three months ended Jan. 31.
Sales at Wal-Mart increased 4.6 percent to $112.8 billion during the quarter, while full-year profits gained 9 percent to $14.4 billion, and experienced a 1 percent sales gain to $405 billion.
Wal-Mart Stores serves customers and members more than 200 million times per week at more than 8,400 retail units under 53 different banners in 15 countries.