Wal-Mart Defies Recession, Eyes Further Entertainment Exclusives17 Feb, 2009 By: Erik Gruenwedel
Wal-Mart Stores Feb. 17 reported it would remain on the offensive in entertainment and electronics, citing strong fourth-quarter (ended Jan. 31) revenue growth in packaged media (including Blu-ray) and double-digit sales increases in flat panel televisions and video game systems.
The Bentonville, Ark.-based retail behemoth didn’t outline specific pending entertainment exclusives. Past proprietary music CD and DVD releases have included artists Garth Brooks, Elton John, AC/DC, Bruce Springsteen and next month’s packaged media and digital release of Summit Home Entertainment’s Twilight.
“We will continue to focus on leveraging exclusive entertainment properties to take advantage of the breadth of our assortments across multiple categories,” said Eduardo Castro-Wright, president of Wal-Mart USA, in a call with investors.
Wal-Mart continued to sidestep economic downturns affecting most retailers by reporting a 2.8% increase in quarterly same-store sales in locations open at least 12 months. Net sales rose 1.7%, to $108 billion, from $106.2 billion last year.
Indeed, Castro-Wright said that excluding food, auto and gasoline revenues, Wal-Mart accounted for 50% of all U.S. retail growth in 2008, according to retail sales data from the U.S. Census Bureau.
Net income, however, dropped 7.5%, to $3.8 billion, from $4.1 billion due primarily to litigation expenses, including a $54.2 million settlement of a seven-year class-action case that alleged current and former Wal-Mart workers were denied rest and meal breaks from 1998 to 2008.
Overall (including international and Sam’s Club) net revenues for the fiscal year increased 7.2%, to $401.2 billion. U.S. same store sales increased 3.3%. Wal-Mart ended the year with $11.6 billion in free cash.