Walmart had a 'great' Christmas
BENTONVILLE, Ark. — Walmart’s U.S. stores division regained customer traffic during the fourth quarter to post a 1.5% same-store sales increase, and continues to gather momentum as familiar strategies and effective marketing are resonating with customers, the company said Tuesday morning in conjunction with the release of quarterly results.
Total sales increase by 5.8% to $122.3 billion, profits from continuing operations increased 3.4% to nearly $5.2 billion and earnings per share from continuing operations increased 7.5% to $1.44 from $1.34 if one-time gains are excluded from both reporting periods.
“We are pleased with Walmart’s earnings performance for both the fourth quarter and the full year,” Wal-Mart Stores president and CEO Mike Duke said. “Today, every segment of our business is stronger than it was a year ago, and we’re in a great position for fiscal year 2013.
As in the past, Duke asserted that Walmart remains the best positioned global retailer and touched on progress made in the United States where divisional president and CEO Bill Simon and chief merchandising officer Duncan Mac Naughton have spent the past year implementing a back-to-basic strategy focused on asserting price leadership, controlling expenses, enhancing product assortment and ensuring products are on shelves. Progress on all those fronts is why Duke said Walmart had a great Christmas and, “the plan that Bill and his team put in place a year ago was the right plan.”
Duke said Walmart would continue to lower prices in the coming year and that positive trends will continue.
“Our price leadership is making a difference across the United States, as many families are settling into a new normal. Core customers remain cautious about their finances, and they rely on Walmart’s EDLP promise to help them manage through today’s economic challenges.”
While the comps increase was noteworthy and toward the upper end of the company’s guidance range that called for flat to a 2% increased, the bigger deal was the increase volume of customers who shopped at Walmart during the quarter.
Simon said it was “the first positive traffic quarter in quite awhile,” thanks to the addition of 10,000 items to the product mix and advertising that effectively conveyed Walmart’s core value proposition of low prices on a broad and in-stock assortment of merchandise.
“Our business models is working and we continue to drive progress on three major front,” Simon said, referring to price leadership, expanded assortment and on-shelf availability.
During the year, Walmart added 119 supercenters and 27 small formats for a total of 9.6 million new sq. ft. This year, between 210 and 235 new units are planned with 80 to 100 of those being small formats, primarily Neighborhood Markets.
Looking abroad, Walmart’s international division also made a meaningful contribution to growth as sales increased 13.1% to nearly $35.5 billion.
Momentum continued as Sam’s Club where, excluding fuel, same-store sales increased 5.4% and total sales increased 5.4% to $12.6 billion.
For the year, Walmart’s sales increased 5.9% to $443.9 billion and full-year profits increased 2.7% to $15.8 billion. The company ended the year with 10,130 stores operating under 69 different banners in 27 countries and more than 2 million employees.