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Wal-Mart Q2 Sales Below Expectations

BENTONVILLE, Ark. — Wal-Mart Stores here said Thursday that low inflation and a late start to summer weather contributed to sales falling below expectations in the fiscal second quarter.

Wal-Mart’s U.S., non-fuel comps were down by 0.3%, while overall sales were up by 2.1% to 68.7 billion. Officials noted that although sales were below expected levels, comps increased sequentially from the first quarter.

Walmart U.S. CEO Bill Simon
Bill Simon

Bill Simon, chief executive officer of Walmart U.S., said grocery comps were down slightly as a result of low inflation and/or price deflation in categories like dry grocery, snacks and frozen food. Shoppers also traded down, “particularly in the categories where product loyalty is not the primary factor in a purchase decision,” Simon said.

Produce comps were up in the mid-single digits, and sales increased through the quarter, Simon added, citing effects of an initiative to improve employee training and the company’s ongoing “fresh-over” campaign.


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Neighborhood Market stores saw sales increase by more than 30% as a result of new stores and “solid comp growth,” Simon said. “Our comp growth was driven by strong traffic trends, as customers respond to our expanded assortment and focus on fresh foods, with produce, adult beverages and consumables setting the pace, and driving customers’ intentions for return trips.”

Read more: Wal-Mart Campus Store Among 18 New Sites

Sam’s Club sales were up by 2.6% to $14.5 billion, and non-fuel comps were up by 1.7%, driven in part by higher membership fees. International sales increased 2.9% to $33 billion.

Consolidated sales for the quarter, which ended July 31, totaled $116.2 billion, a 2.4% increase. Net income of $4.1 billion increased by 1.3%.

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