Walmart has reported net sales of $103bn (£66.3bn) in the second quarter, compared with $100bn (£64.37bn) in the same period last year.
On a constant currency basis, consolidated net sales increased 2%. Income from continuing operations attributable to Walmart for the quarter increased to $3.6bn (£2.31bn) from $3.5bn (£2.25bn) last year.
The quarter was something of a disappointment for Walmart US, with sales flat at $64.7bn (£43.9bn) and operating earnings down by 0.2% at $4.87bn (£3.13bn). Like-for-like sales figures for the quarter as a whole were down by 1.8%.
The Walmart US operating segment, now led by president and chief executive Bill Simon, is now seeing some aspects of its much-lauded Project Impact diluted, or even reversed. In July, for example, Walmart put the emphasis back on its core Everyday Low Prices model. In addition, after rationalising the number of SKUs as part of Project Impact, Walmart is now restoring thousands of products to its assortment and adding new items. Since the start of July 2010, Walmart has also returned merchandise to Action Alley.
One component of Project Impact though is still going strong - store remodels. The final group of 550 store remodels scheduled for this year, are under way.
The retailer’s Sam’s Club business performed better, with net sales, excluding fuel, increasing 0.6% to $11.4bn (£7.33bn). Sam’s Club reported operating earnings up 2.4% at $428m (£275m). The chain delivered 1% comparable club sales (excluding fuel).
Internationally, Walmart’s net sales jumped 11% to $25.9bn (£16.67bn), with strong underlying sales in Mexico, and new store growth in Brazil and China.
On a constant currency basis, international net sales were up 7.3%. Operating profits improved strongly, up 16.8% to $1.29bn (£830m). Asda in the UK experienced sales growth in the low single digits, while comp sales without fuel declined 40 basis points. In Japan, overall sales and like-for-like sales for the period both declined by about 0.8%, the result of continued deflation in grocery and consumables. In real terms, like-for-like sales in Japan increased 1.6%, as traffic continues to increase because customers are responding well to EDLP.
Walmart Canada’s sales growth was for the period was 4.2%, largely due to the Supercentre expansion programme and a strong category performance in existing stores. Like-for-like sales in Canada were flat.
Robert Gregory, research director, Planet Retail. For more information contact us on:
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