US retail giant Wal-Mart has upped its second-quarter earnings per share guidance on the back of improved sales.
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The company said that total sales at its Wal-Mart Stores, Sam’s Club and international units for the five weeks to 4 July were up 11.5% to $39.9bn from $35.8bn in the same period last year.
For the 22 week period to 4 July, sales were up 9.6% to US$166.3bn.
Based on its improved results, Wal-Mart updated its second-quarter earnings per share guidance to a range of $0.82 to $0.84.
Comparable sales at Wal-Mart US stores rose 6.1%, with favourable weather and improved assortments helping drive sales of seasonal apparel items such as swimwear and sportswear.
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By GlobalDataThe company said that all six merchandise units (grocery, entertainment, health and wellness, apparel, home and hardlines) achieved comparable-store sales increases in the June five-week period. The strongest results were in grocery, entertainment and health and wellness.
It added that the economic stimulus checks contributed to increases in overall comparable store traffic results.
“Our underlying business is strong because of price leadership, clearly defined product offerings and a better store experience that continue to drive customers to our stores,” said Eduardo Castro-Wright, Wal-Mart U.S. president and chief executive officer. “Customers like what they are seeing and they’re shopping more of the store.”
Sam’s Club sales during the June period had strengths in fresh foods, dry grocery and consumables, the company noted.
Wal-Mart International’s sales for the June period were strongest in the UK, Brazil and China.
“Our international businesses continued to show strong sales increases during June,” said Mike Duke, vice chairman, Wal-Mart International. “We are committed to serving our customers in a manner that resonates with them everywhere we do business. Our ability to serve our customers through different formats at every day low prices is helping us lead in each of our markets.”
In the UK, sales at Asda grew faster than the market due to higher customer traffic, a statement said.
Brazil also had strong sales, led by the low-income format Todo Dia, the hypermarkets in the south and south-east of the country, and Maxxi, the cash-and-carry format.
Wal-Mart Canada had strong sales leading up to Canada Day, a national holiday on 1 July. Wal-Mart Canada opened two new supercentres, bringing the total number of Canadian supercentres to 34 and total units in Canada to 307.
Wal-Mart Mexico’s total and comparable-store sales growth continued to be driven by traffic growth at the self-service formats, Bodega Aurrera, Wal-Mart Supercenter, Sam’s Club, and Superama.
Wal-Mart Mexico announced its comparable-store sales increased 8% in nominal terms during the calendar June period. Lower consumer confidence negatively affected sales at the discretionary spending formats, Suburbia and Vips.
“Our estimate for US comparable-store sales, excluding fuel, for the July four-week period is between 2% and 4%,” said Tom Schoewe, executive vice president and chief financial officer.
“The Wal-Mart US underlying business remains strong. However, consumers and small business owners remain concerned about the economy, inflation and most of all, higher gas prices. With the last large mailing of economic stimulus checks due this Friday, it is difficult to forecast the benefit from the economic stimulus through the remainder of the year.
“Because of our improved sales results during the quarter, we have updated our guidance estimate for earnings per share for the second quarter of fiscal year 2009 to a range of $0.82 to $0.84,” Schoewe said.
