Wal-Mart Stores Inc reported net sales for the four-week and 26-week periods ending August 3, 2007, and August 4, 2006, respectively, as follows (dollars in billions):
The Company reports net sales on a monthly basis based upon the 4-5-4 retail calendar. For earnings releases, the Company reports sales based upon the calendar months within the quarter and the fiscal year. Total net sales for the second quarter of fiscal year 2008 ended July 31, 2007 were approximately $92 billion. The Company will report quarterly earnings on August 14 before the market opens.
Wal-Mart Stores:
Grocery sales were once again stronger than general merchandise sales during the four-week July sales period at the Wal-Mart segment. Perishables led the increase in grocery, with solid performance in dairy and bakery, as well as pharmacy. Electronics continued to show solid comparable store sales gains over last year, with strength in TVs, computers, digital cameras and video games.
The Company is encouraged by positive early signs in back-to-school and back-to-college categories. However, through the July four-week period, apparel and home overall continued to be soft and are expected to remain so through the third quarter.
Wal-Mart U.S. stepped up its promotional activity during the July four-week period. The stores increased their price leadership position with “rollback” and “save even more” programs on more than 16,000 products during July. The deep cuts ontop brands and food started in time for the July 4th holiday, and continued throughout the four-week period, and customers have responded well.
“In the current economic environment, our customers depend on Wal-Mart to save them money on merchandise that they need,” said Eduardo Castro-Wright, Wal-Mart Stores U.S. president and chief executive officer. “Customers are responding to the pricing initiatives and traffic trends are improving. However, this is impacting gross margins.”
Sam’s Club:
Sam’s Club’s sales for the four-week period were driven by continued momentum with small business owners. Sales were driven by increases in average ticket. In addition to small business categories, other strengths included electronics, fresh food and grocery.
As the month of August gets under way, the clubs are completing the transition from summer outdoor goods to a furniture gallery and back-to-college in many markets. A fall merchandise transition will begin in September. The fuel impact was a minimal negative 20 basis points for the four-week period.
International:
The Company continues to see the same pressures as in the United States on customers in its international markets, particularly in Mexico where the economy is experiencing lower growth and less consumer demand. However, there were positive sales results in certain markets, including Brazil and the U.K. In Brazil, sales were driven by an improved price position and recovery of consumer purchasing power.
Guidance:
The Company expects the comparable store sales of its United States operations for the August four-week reporting period to be between 1 and 2 percent, said Tom Schoewe, executive vice president and chief financial officer. The August four-week period runs from August 4 through August 31, 2007.
As previously noted, the Company reports net sales and comparable store sales consistent with the National Retail Federation (NRF) calendar. The NRF calendar for the most recently completed year included 53 weeks, but includes only 52 weeks this year. The weekly sales information for the four-week and 26-week periods ended August 4, 2006 reported in this release match the comparable weeks for the current fiscal year. However, these four-week and 26-week comparable store sales periods reported for last year ended July 28, 2006, one week earlier.
The Company has posted on its Web site in investors section, a “reclassification” document showing prior year comparable store sales re-grouped to match the comparable weeks for the current reporting calendar. The reclassification for the August four-week period for the total Company comparable store sales is 2.9 percent, excluding the impact of fuel.
