Wal-Mart Cites Weakness in Apparel, Hardlines in 1Q

ELLIOT ZWIEBACH

BENTONVILLE, Ark. — Wal-Mart Stores said soft sales in apparel and hardlines had a negative impact on results for the first quarter that ended April 30. While noting that overall comparable-store sales, excluding fuel, were up 0.6% during the quarter, Lee Scott, chairman, president and chief executive officer, told analysts in a conference call yesterday that comps at Wal-Mart Stores, encompassing supercenters and discount stores, dropped 0.1% — offset by comp gains of 4.7% at Sam's Clubs. According to Eduardo Castro-Wright, president and CEO of the Wal-Mart Stores division, the problem was not with grocery-related sales — food sales at supercenters were up more than 13.4% in the quarter and food comps rose in the mid-single digits, he indicated. "While comps continued to be pressured by softer traffic, comps in grocery, driven by food; in health and wellness, driven by pharmacy; and in entertainment, were at or above plan,” he said, “but not enough to offset [weaknesses] in apparel, home and hardlines.” Net income for the 13-week quarter rose 8.1% to $2.8 billion, while sales jumped 8.3% to $85.4 billion. On a segment basis, first-quarter sales rose 5.6% at Wal-Mart Stores to $55.4 billion; 5.6% at Sam's Clubs to $10.3 billion; and 18.5% in the international division to $19.7 billion.

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