Wal-Mart Stores on Thursday said comparable-store sales in the U.S. during the second quarter topped the company's modest estimates, as shoppers rewarded improved store conditions with more visits.
The Bentonville, Ark.-based mass merchant said U.S. stores saw comp gains of 1.6% on a 1.2% increase in store traffic. In May, Walmart said it was anticipating comps for the quarter to increase by about 1%.
"We continue to see steady improvement in the Walmart U.S. business as customers respond favorably to the changes we’re making in our stores and e-commerce offer," Brett Biggs, Walmart's CFO, said in recorded remarks. "We believe a contributing factor to the results is our consistent improvement in customer experience. Customer surveys indicate that we’re making good progress in providing a better shopping experience with cleaner stores, faster checkout and friendlier service."
Comps at Walmart's Neighborhood Markets stores improved by 6.5% during the quarter, and Sam's Club saw U.S. comps improve by 0.6%, also slightly above estimates. E-commerce sales contributed approximately 40 basis points to the U.S. comp figure.
U.S. gross margin increased 33 basis points in the quarter. Improved margin rates in food and consumables were a contributing factor, officials said. Savings in procurement, lower transportation costs and some improvements in shrink also improved costs, but these were somewhat offset by the implementation of a multi-year strategy of incremental price investments.
Walmart did not provide additional detail of that program.
Despite increased promotional activity by competitors, Walmart Canada's comp sales increased by 1.1%, the division's ninth straight quarter of comp growth. According to Nielsen, Walmart Canada continued to gain market share in food and consumables and health and wellness during the quarter.
Overall Walmart said quarterly revenues increased by 0.5% to $120.9 billion, or by 2.8% at constant currency rates. Adjusted earnings per share of $1.07 topped consensus estimates of $1.02.
Also Thursday, CEO Doug McMillan confirmed that Neil Ashe, CEO of Walmart.com, would be leaving the company following the end of the fiscal year. Marc Lore, current president and CEO of Jet.com, will join Walmart as its new president and CEO of e-commerce following completion of Walmart's acquisition of Jet.
"Marc is a passionate merchant and innovative thinker who will definitely add value to our business," McMillon said. "I look forward to working with him."
