Wal-Mart's International Surge

Wall Street Journal--Wal-Mart (WMT) reported today a 0.7% rise in U.S. same-store sales excluding fuel, the lower end of its forecast (see top chart above, click to enlarge). The firm's Sam's Club chain posted a 0.7% drop because of losing a day of sales to Easter closures. That hurt sales by 2 to 2.5 percentage points, the company said.

Wal-Mart's namesake chain had a 0.9% increase amid continued strength in groceries, health and wellness and entertainment. Wal-Mart described Easter sales as "good" despite the holiday's earliness this year shortening the season's selling period. Home-related sales remained weak.

What didn't make it into the WSJ's report was Wal-Mart's strong international performance (at stores in Argentina, Brazil, Canada, China, Costa Rica, El Salvador, Guatemala, Honduras, Japan, Mexico, Nicaragua, Puerto Rico and the United Kingdom), with a 5-week sales increase of almost 19% (see bottom chart above), which might suggest that the economic slowdown in the U.S. has not spread internationally, and also suggests that U.S. companies can remain profitable from strong international sales despite a domestic slowdown.

“We are pleased with the overall performance of our International markets,” said Mike Duke, vice chairman responsible for Wal-Mart International. “We had strong sales performance in key countries, including the United Kingdom, Canada, Brazil and China.”

Comments

[Markrt test]

"The firm's Sam's Club chain posted a 0.7% drop because of losing a day of sales to Easter closures."
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One of my favorite retailing lines. Was COST closed on Easter, too? (and does that mean COST's results were relatively that much better?). And the Walmart's non-Sams retail sales - I presume they didn't use that excuse because they didn't need to? And in April will they remind us that last year April lost an Easter sales day and that this year they had that extra day?

Anyway, my point is that the calendar is the retailer's selective excuse (like remembering this year's snow days but forgetting last year's). Or our time-honored favorite - selling days between Thanksgiving and Christmas (though I guess there there is some supporting data on that).

Anyway, that's my retail excuse rant. Use the rationalizations when you need them, right?

Thanks

[mkreisel]

Costco is surely doing well, but you are also paying a 50% premium on its stock vs WMT. Besides, Costco doesn't have any meaningful international exposures yet, and James Sinegal will be retiring soon.

[Roudy]

I appreciate Dr. Mark's artice. Any way you cut it WMT does it better overall I think since I've owned it since 1981. It has made me a "ton" of money over the years with DRI and stock splits. I will "stay the course"as John Bogle of Vanguard says. Dr. Mark, a Phd, fair and balanced. How about that! RoudMan