The world's largest retailer,
Wal-Mart Stores, Inc.
) reported fiscal first quarter 2014 earnings of $1.14 per share,
missing the Zacks Consensus Estimate of $1.15 per share by 0.9%.
Earnings were up 4.6% from the prior-year quarter earnings of
$1.09 per share.
The first quarter fiscal 2014 results were within the
company's earnings guidance range of $1.11 to $1.16 per share.
Top-line growth coupled with cost savings boosted earnings in the
Total revenue climbed 1.0% to $114.2 billion (including
membership and other income), missing the Zacks Consensus
Estimate of $116.6 billion. Membership and other income increased
1.6% on a year-over-year basis, driven by an increase in
Net revenue, excluding currency impact of $1 billion and
membership income of $0.8 billion, increased 1.8% to $114.2
billion. Total e-commerce sales also grew more than 30% in the
Consolidated operating income increased 1.1% to $6.46 billion,
driven by productivity improvements. On a constant currency
basis, operating income increased 1.6% to $6.49 billion.
: The segment posted net sales growth of 0.3% to $66.6 billion in
the quarter, including the impact of fuel sales. Operating income
increased 5.9% to $5.3 billion.
U.S. same-store sales declined 1.4% compared to 2.6% growth in
the prior-year quarter due to a delay in tax refund checks,
challenging weather conditions and the payroll tax increase. Comp
traffic declined while average ticket increased in the
Segment net sales, including fuel sales, increased 2.9% to $33.0
billion. Excluding currency headwinds, international sales
increased 5.4% to $33.8 billion. Walmart's stores in the U.K.,
Africa, Mexico, Central America, Brazil, Chile, Argentina, China
and India delivered positive comp sales in the quarter, while
comps in Japan and Canada declined. Operating income declined
4.7% to $1.3 billion.
The segment, which comprises membership warehouse clubs, posted
net sales growth, including fuel impact, of 0.1% to $13.9
billion. Net sales, excluding fuel impact, increased 0.5% to
$12.2 billion. Sam's Club operating income grew 7.4% to $0.5
billion in the quarter.
Sam's Club's comparable sales, excluding the impact of fuel
sales, increased 0.2% in the quarter, driven by positive traffic
and partially offset by decline in average ticket. The same-store
sales growth was within the guidance range of flat to 2.0%.
The company had posted comp sales growth of 5.3% in the
prior-year quarter. Including the impact of fuel sales, Sam's
Club comp sales declined 0.2% compared to growth of 6.2% in the
prior-year quarter due to unfavorable weather conditions.
Other Financial Update
During the quarter, the company repurchased 30 million shares
worth approximately $2.2 billion. In addition, the company paid
$1.6 billion in dividends for the quarter. The company had
previously announced an increase of 18% in fiscal 2014 dividend
to $1.88 per share over last year's dividend of $1.59 per
For the second quarter of fiscal 2014, Walmart expects its
earnings to range between $1.22 and $1.27 per share, taking into
account the impact of its e-commerce initiatives. The guidance is
also up from $1.18 per share earned in the second quarter of
Walmart expects U.S. comp sales to increase flat to 2% for the
13-week period ending July 26. Sam's Club comp sales growth,
without the impact of fuel sales, is expected to increase from 1%
to 3.0% for this 13-week period.
Walmart continues to focus on improving its U.S. and
International segments. In addition, the company is focused on
reducing its operating expenses in fiscal 2014, which in turn
will increase its productivity. However, the company expects a
decline in consumer spending going ahead as middle-class
consumers struggle to cope with rising gas prices, delayed income
tax refunds and higher payroll taxes.
Walmart holds a Zacks Rank #3 (Hold). Retail and wholesale
stocks that are presently doing favorable business include
The Kroger Co
Harris Teeter Supermarkets Inc
TJX Companies Inc.
), all of which carry a Zacks Rank #2 (Buy).
HARRIS TEETER (HTSI): Free Stock Analysis
KROGER CO (KR): Free Stock Analysis Report
TJX COS INC NEW (TJX): Free Stock Analysis
WAL-MART STORES (WMT): Free Stock Analysis
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