Same song, different verse.
Wal-Mart Stores, Inc. posted a strong quarter of gains in revenue and net income fueled by its international operations, but domestic sales continue to plague the retail giant.
Bentonville-based Wal-Mart reported first quarter sales of $103.4 billion, up 4.4% from last year’s comparable period. The company earned another $774 million from membership fees and other revenue, such as real estate.
Net income hit $3.4 billion for the quarter, up 3% from last year’s first quarter net of $3.3 billion.
International expansion led the way as sales in that division jumped 11.5% on a year-to-year comparison. U.S. same-store sales dipped 1.1% in the 13-week period. It was the 8th consecutive quarter of lagging same-store sales, which are defined as comparable sales within stores open for more than a year.
“Walmart U.S. comp sales for the first quarter were within our guidance range,” said Wal-Mart CEO Mike Duke. “We recognize we still have work to do and comp sales growth remains the greatest priority for me and the entire Walmart U.S. team. The good news is that the plan Bill Simon and his team are executing is gaining traction. We’re focused on delivering every day low price and a wide assortment.”
“International remains the key growth driver for our company, and the segment is seeing continued growth through a combination of comp sales and new stores,” Duke added. “Mexico, China and Chile had the highest percentage sales increases for the first quarter compared to last year.”
Wal-Mart also noted several one-time items that impacted earnings. They included:
- Approximately $117 million from mark-to-market gains on certain foreign currency derivative positions.
- A $67 million charge in its British operations for the realization of expenses in the current period related to the removal of future benefit accruals and the effect of future pay increases associated with its defined benefit plan.
- Walmart Japan recorded approximately a $51 million charge for casualty losses related to the March earthquake and tsunami.
- Walmart Chile recorded approximately a $51 million gain from the sale of an investment.
Michael Tilley with our content partner, The City Wire, has more analysis in this report.