Sales and earnings updated at Walmart
BENTONVILLE, Ark. Health and wellness was among the top performing categories at Walmart during March, and combined with a strong start to Easter, it was enough for the company to indicate first-quarter sales and earnings would be at the high-end of the previously communicated range.
The home and grocery categories also were credited with helping the company’s U.S. stores division achieve a 0.6% same-store sales increase. That’s not a large number on a stand-alone basis, and it was below analysts’ expectation. Walmart, however, was quick to point out that results were negatively affected by a significant swing in the timing of Easter, which falls on April 11 this year, compared with March 23 last year. As a result of the shift, the majority of seasonal sales associated with Easter are likely to be reflected in April results.
Walmart was aggressive in its pursuit of Easter seasonal sales this year, and directly targeted the chain drug channel in a national television campaign that portrayed Walmart as a less expensive alternative for Easter products. In addition, the company continued to promote its $4 generic drug program on the cover of a circular distributed the week of March 29.
“Based on the initial strength of our sales this week, we expect Easter to drive April sales performance,” said Walmart vice chairman Eduardo Castro-Wright. “Clarity of offering, quality brands, unbeatable prices and strong operational execution are driving growth in multiple categories.”
When March results are combined with actual results from February and anticipated results for April, Walmart expects total U.S. same store sales to be around the high end of a previously forecast range of 1% to 3% for the first quarter. As a result of the sales momentum and what cfo Tom Schoewe called, “expense control,” the company indicated first quarter earnings per share would be toward the high end of the range of $0.72 to $0.77 provided in February.
“We remain well positioned for today’s economy,” Castro-Wright said. “People are choosing to spend money in key discretionary categories across the stores, and this is translating to improvement is several areas of our business, including home.”
Shares of Walmart opened sharply lower from the prior day’s close of $52.61 despite the company’s assertion that once results for April are tallied sales and earnings would be at the high-end of earlier guidance.