Sales slide continues at Walmart as profit goal met
Weak sales trends continued at Walmart’s U.S. stores division during the third quarter as same-store sales declined 1.3%; however the company managed to meet analysts’ third quarter earnings per share target of 90 cents.
Inclusion of a five cents a share tax benefit resulted in third quarter earnings per share of 95 cents and caused the company to raise the full-year profit forecast to a range of $4.08 to $4.12 from $3.95 to $4.05.
Walmart president and CEO Mike Duke said the company performed well in the third quarter and delivered solid earnings growth for shareholders.
“Our company now has delivered four consecutive quarter of operating expense leverage, and we continue to grow operating income faster than sales,” Duke said.
Operating income during the quarter grew 3.1% to $5.6 billion while sales increased 2.6% to slightly more than $101 billion.
Sales at the U.S. stores division were essentially flat at $62.2 billion, while operating profits increased 1.9% to $4.4 billion. The 1.3% comp decline at the U.S. division marked the sixth consecutive quarter of declining comps and Walmart left open the possibility of a fourth-quarter decline by offering a guidance range of negative 1% to plus 2%.
Internationally, sales on a constant currency basis increased 7.9% to $26.6 billion and operating profits increased 12.4% to $1.2 billion. Including favorable currency benefits, sales increased 9.3% to $26.9 billion and profit increased 13.5% to $1.223 billion. Sales at Sam’s Club increased 2.7% to $12.1 billion, while operating profits declined 7.1% to $367 million, and same-store sales, excluding the favorable impact of rising fuel prices, increased 2.4%.
“Our international business continues to deliver impressive results, with sales up more than nine percent,” Duke said. “We are also pleased with the ongoing sales momentum at Sam’s Club and expect that momentum to continue in the fourth quarter. Our Walmart U.S. business is on the right track with third quarter comps sales with guidance and operating income growing faster than sales.”
Appelmann out at Stock Building Supply
Joe Appelmann, CEO of Stock Building Supply, is no longer with the company, according to a statement issued today by chairman of the board Tim Meyer.
Anew CEO has already been identified, according to a company spokesperson, and an announcement will be made “very shortly.”
Appelmann was a 22-year veteran of Stock, holding many key posts, including VP finance, senior VP logistics and chief operating officer. He became CEO in 2007 and led the company through a sale to The Gores Group, a Los Angeles private equity firm, and a major Chapter 11 restructuring.
Speaking about his departure, Appelmann said: “Stock is an exceptional place to work with a bright future. I would like to thank every associate for the courtesy and loyalty they extended to me during my tenure. My sincere hope is they will provide the same support to my successor. I cherish all of the friendships I developed over the years and look forward to maintaining those relationships in the future.
“It was a privilege to work with such a talented management team,” he added. “They were instrumental in transitioning the company to committed ownership and restructuring the organization for future growth and performance.”
Circular of the Week
This year, get your Thanksgiving wares at the hardware store. Montana-based Billings Hardware is featuring deals on everything from pop-up turkey timers to lancers and even infrared turkey fryers and marinade injectors. Not to fall too far behind the Christmas curve, it is also starting deals on outdoor lights and accessories, including an extreme cold-weather extension cord.
• CharBroil oil-less infrared turkey fryer for $165; • Six-piece party traveler kit for $25; and • Weston Brand heavy-duty food slicer for $99.
The Skinny: While supplies last
The message of urgency takes up just a small amount of real estate on a circular, but its impact is huge. The red banner with “While Supplies Last” in bold letters above the circular sends a clear message to customers: It’s in their interest to come to the store as soon as they can.