Walmart U.S. Store Sales Dip14 Aug, 2014 By: Erik Gruenwedel
When does $5.2 billion in operating income and $70 billion in revenue at the domestic level result in a bad fiscal quarter? When you’re Walmart, the world’s largest retailer with competitors and Wall Street looking for the slightest imperfections.
While Walmart U.S. revenue increased 2.7% in the second quarter (ended July 31), operating income dipped 2.4%. Same-store sales were flat, with the Bentonville, Ark.-based retailer projecting the same for the current quarter, which ends on Halloween.
The retail behemoth has seen increased competition from discount chains such as dollar stores throughout rural parts of the country. The recent merger of Dollar Tree and Family Dollar is expected to up the pressure on Walmart’s domestic operations going forward.
Walmart remains the largest retailer of packaged media, including DVD movies. It also owns and operates Vudu.com, which offers UltraViolet functionality on electronic sellthrough purchases.
Meanwhile, Walmart.com e-commerce revenue increased 24%, which represented a 0.3% positive impact on same-store sales. During the 13-week quarter, Walmart U.S. comp traffic decreased 1.1%, while the average store purchase increased 1.1%.
Separately, Walmart International increased sales 3.1% to nearly $33.8 billion, while Sam’s Club upped revenue 2.3% to $14.8 billion. Total Walmart revenue topped $119 billion, up 2.8% from the prior-year period.
“We wanted to see stronger comps in Walmart U.S. and Sam’s Club,” Walmart Stores CEO Doug McMillon said in a statement. “Stronger sales in the U.S. businesses would’ve also helped our profit performance.”
McMillon said ongoing growth in e-commerce and turnaround shipping underscores the need to move quickly to serve customers more effectively.
“We see opportunities to improve in merchandising, pricing and store-level service in our supercenters, and we are working to close those gaps,” McMillon said. “Our investments in e-commerce and mobile are very important, as the lines between digital and physical retail continue to blur. Our customers expect a seamless experience, and we’re working to deliver that for them around the world.”