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Due in large part to strong growth of its business abroad, Wal-Mart Stores Inc. yesterday posted second-quarter net sales of $103 billion, an increase of 2.8 percent from the $100 billion reported last year. Net sales for the second quarter included a currency exchange rate benefit of $857 million. On a constant currency basis, consolidated net sales rose 2.0 percent. Income from continuing operations for the quarter grew to $3.6 billion from $3.5 billion in the year-ago period.
Diluted earnings for the second quarter of fiscal year 2011 were 97 cents, with a benefit of about once cent from currency exchange rates, vs. diluted EPS of 89 cents in last year’s second quarter.
“We continue to focus on our priorities of growth, leverage and returns,” noted Wal-Mart Stores president and CEO Mike Duke. “Despite the ongoing challenges of the global economy, we continue to grow our earnings.” Duke said that based on such performance, the company was raising its full-year guidance to a range of $3.95 to $4.05.
“The slow economic recovery will continue to affect our customers, and we expect they will remain cautious about spending,” he added.
Despite such lingering caution on the part of U.S. consumers, the worldwide picture is looking particularly bright for the mega-retailer. “Our international business continues to be an impressive growth engine, and Walmart International grew operating income faster than sales,” observed Duke. In fact, of the nearly 5 million square feet of retail space added in the second quarter, over 60 percent was in Walmart International.
“Our goal is to provide a consistently high return, and ROI is extremely healthy,” said EVP and CFO Tom Schoewe. “We continue to deliver solid operating performance.” Further, according to Schoewe: “In the second quarter, we delivered on our promise to leverage expenses, and this commitment remains a strategic priority throughout the company.”
Walmart International net sales came to $25.9 billion for the quarter, an 11.0 percent increase from last year, thanks to solid underlying sales in Mexico, and new store growth in Brazil and China. The growth in Walmart International net sales includes an $857 million positive impact from currency exchange rate fluctuations. The International segment continues to generate growth for the company: On a constant currency basis, its net sales rose 7.3 percent to $25.0 billion from the year-ago period.
Second-quarter net sales for Sam’s Club, excluding fuel, grew to $11.4 billion, a 0.6 percent rise over last year’s second quarter. The division delivered 1.0 percent comparable-club sales without fuel for the 13-week period ended July 30, with average ticket, excluding fuel, higher for this period for both Business and Advantage members.
Walmart U.S. net sales were flat, but its comps had improved by the close of the 13-week period ended July 30, the company noted, with traffic trends indicating sequential improvement during that period. The operating segment, now headed by president and CEO Bill Simon, remains focused on boosting sales and customer traffic, according to the company, which added that the management team goals were to offer a relevant merchandise mix, maintain market-leading prices and strengthen relationships with suppliers.
Walmart operates more than 8,500 retail units under 55 banners in 15 countries.