BENTONVILLE, Ark. -- A strong performance in its supercenter and discount-store division contributed to Wal-Mart Stores' 23% sales increase in the second quarter ended July 31.
r. The results were in line with Wall Street's estimates. The company converted 10 conventional Wal-Mart stores to supercenters and opened seven new Sam's Clubs and 19 new conventional stores as part of its second-quarter building program. The projects added about 4.6 million square feet of new retail floor space.
As of July 31, Wal-Mart operated 87 supercenters, which include a full-line supermarket and a traditional Wal-Mart general merchandise store under the same roof, and 434 Sam's Clubs. Same-store sales at Sam's dropped 3.6% in the quarter.
David Glass, president and chief executive officer, said Wal-Mart was "pleased" with its performance in the quarter, particularly in the discount store and supercenter divisions. "Our sales performance was very good in the food, electronics, basics and seasonal categories," he said.
During the second quarter, Wal-Mart also completed the conversion to the Wal-Mart format of 35 former Woolco stores in Canada and began receiving general merchandise in two new distribution centers, in Red Bluff, Calif., and Marcy, N.Y. Gross margins declined about 50 basis points to 19.7% of sales from 20.2% in the year-ago second quarter. Selling, general and administrative expenses rose about 40 basis points to 15.9% of sales, which securities analysts attributed to increases in insurance and payroll costs.