On the money: Wal-Mart upbeat on US outlook despite sales decline
Wal-Mart boss Mike Duke remains cheerful in face of US sales drop
US retail giant Wal-Mart struck an upbeat note on the performance of its namesake US business today (18 February), despite posting a decline in sales during the fourth quarter.
Although the company posted a 7% increase in full-year earnings this morning, Wal-Mart's top line proved sluggish and sales rose by just 1% during the 12 months to 31 January.
While the retailer said revenue gains picked up in the fourth quarter, when total sales grew by 4.6%, Wal-Mart revealed that group's same-store sales in the US fell 1.6%, excluding fuel, in the three months to the end of January.
Speaking during a conference call following the release of Wal-Mart's results, CEO Mike Duke admitted that he was “disappointed” with the company's fourth quarter domestic sales performance.
“While I’m disappointed that Wal-Mart US comparable store sales were below expectations for the fourth quarter, I am really proud of their underlying operating performance,” he commented.
Duke emphasised that Wal-Mart US was able to grow operating income faster than its sales increased as it cut costs and tightened inventory management – with inventory down almost 8% on the year.
Consolidated operating income from Wal-Mart US totalled $24bn, up a little over 5%, the company revealed.
While Wal-Mart's continued investment in revamping its US store base does not seem to have translated into improved sales, Duke nevertheless insisted that the investments bode well for the coming year.
“Continued investments in remodeling, and productivity initiatives and our sourcing position us for better top line sales growth,” Duke claimed.
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