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Wal-Mart Cites Sales Pressures in Q3

Wal-Mart Cites Sales Pressures in Q3

BENTONVILLE, Ark. — Despite aggressive holiday plans, Wal-Mart Stores here said last week it anticipates continued pressure on sales.

Those pressures were visible in the company’s financial results for the third quarter ended Oct. 31, which saw comparable store sales in the U.S. decline 0.1% overall in the quarter and 0.4% for the year-to-date, driven by a drop of 0.4% in traffic, the company pointed out.

Comps at Wal-Mart’s U.S. stores declined 0.3% for the quarter and fell 0.4% for the 39-week period, while comps at Sam’s Club, excluding fuel, rose 1.1% during the quarter and 1% for the year-to-date. 

The company also said sales at Neighborhood Markets were up 3.4% during the third quarter; e-commerce sales rose 0.2%; and average baskets rose 0.1%.

Mike Duke, chairman, president and chief executive officer of Wal-Mart Stores, said, “Our most important priority is growing top-line sales, including comp sales.”


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Bill Simon, president and CEO of the chain’s U.S. division, said third-quarter sales “started slower than we’d like, though comp sales picked up in September and October.”

Two major merchandising events during the fall enabled Walmart U.S. to boost sales in several grocery categories, Simon said, including snacks and beverages, baby consumables and paper products, “[which] helped offset additional consumer noise in the quarter related to the government shutdown and debt-ceiling discussions.”

One of the more challenging categories, Simon noted, was dry grocery, which had a comp of negative 0.7%.

According to Simon, Walmart expects comps to be relatively flat during the fourth quarter, compared to an increase of 0.3% in last year’s fourth quarter.

Read more: Wal-Mart Plans Faster Growth of Neighborhood Markets

For Wal-Mart Stores net income from continuing operations during the 13-week third quarter — excluding Vips restaurants in Mexico, which are being sold — rose 2.8% to $3.7 million, while net sales increased 1.6% to $114.9 billion.

Sales for the quarter rose 2.4% to $67.7 billion at Walmart U.S.; 1.1% to $14.1 billion at Sam’s Clubs; and 0.2% to $33.1 billion at Walmart International.

Stephen Springham, senior retail analyst at Planet Retail, London, called the third-quarter results “a hat-trick of disappointments.”

“Walmart U.S. again failed to achieve its guidance of flat comps,” he said, adding that negative comps were “not entirely unexpected as an already fragile consumer environment has not been helped by the government shutdown.”

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