Walmart (WMT, Financial), the largest retailer in the world, reported earnings on Tuesday morning. The event was on watch by the markets, which were interested in seeing what Wal-Mart’s numbers, a barometer of consumer activity/spending, had to say about the past three months. Here are some of the highlights from the quarter and the conference call:
Net sales for the second quarter were $108.6 billion, an increase of 5.5 percent from last year ($103 billion); after backing out $2.3 billion from a currency exchange rate benefit, sales increased by 3.2% on a constant currency basis. Excluding acquisitions, the company added 176 net new units in the quarter.
Walmart U.S. sales increased 0.4% from Q2 2011 to $64.9 billion, while comparable store sales decreased 0.9%; while negative, this quarters’ comps were the strongest since Q3 2010, and trended in the right direction by increasing sequentially month to month within the quarter. Management expects comps for Q3 to range from -1% to +1% for Walmart U.S. (off of a 1.3% decline in Q3 2011).
As expected, consumers are still hurting, and delaying purchases whenever it’s possible. Here is what CEO Mike Duke had to say about the U.S. consumer: “I've recently observed several consumer focus groups, and it's clear that many consumers are still struggling. They're trading down to stretch their budgets, buying a lower-priced brand of detergent, moving from branded canned goods to private label and purchasing half gallons of milk instead of gallons.”
Sales at Walmart International increased more than 16% to more than $30 billion, partly driven by exchange rates (up 7.1% to $27.8B on a currency neutral basis) and strong performances in Mexico, the U.K., Canada, Brazil and China. In addition, the company completed its acquisitions of the 147 Netto stores in the U.K. (consolidated in financials) and the 51% majority ownership position in Massmart Holdings in Africa (will start being consolidated in Q3); combined, the two acquisitions added 462 new units to Walmart’s retail operations.
At Sam’s Club, sales increased by 9.5% to $13.65 billion, driven by impressive same store sales growth of 5% (excluding fuel) when compared to Q2 2011. Mike Duke had this to say: “This is the sixth straight quarter of comp improvement for Sam's, a testament to the team's execution to drive quality, value and savings for members.” Management expects comparable sales at Sam’s Club to increase between 3-5% in comparison to Q3 2011.
The company returned $2.7 billion to shareholders through dividends ($1.3 billion) and share repurchases (26.1 million shares, at an average cost of roughly $53.64/share) in the second quarter, and more than $6 billion through the first half of the fiscal year. In June, the board of directors approved a new $15 billion repurchase authorization, which has $14.1 billion remaining.
Second quarter diluted EPS from continuing operations were $1.09 (guidance was $1.05-$1.10), an increase of 12.4% from the $0.97 per share from continuing operations in Q2 2011. As a result of the strong start to the year, management raised full year EPS guidance range to $4.41 to $4.51; at the time of writing, the stock was up nearly 4% to just under $52/share.
Net sales for the second quarter were $108.6 billion, an increase of 5.5 percent from last year ($103 billion); after backing out $2.3 billion from a currency exchange rate benefit, sales increased by 3.2% on a constant currency basis. Excluding acquisitions, the company added 176 net new units in the quarter.
Walmart U.S. sales increased 0.4% from Q2 2011 to $64.9 billion, while comparable store sales decreased 0.9%; while negative, this quarters’ comps were the strongest since Q3 2010, and trended in the right direction by increasing sequentially month to month within the quarter. Management expects comps for Q3 to range from -1% to +1% for Walmart U.S. (off of a 1.3% decline in Q3 2011).
As expected, consumers are still hurting, and delaying purchases whenever it’s possible. Here is what CEO Mike Duke had to say about the U.S. consumer: “I've recently observed several consumer focus groups, and it's clear that many consumers are still struggling. They're trading down to stretch their budgets, buying a lower-priced brand of detergent, moving from branded canned goods to private label and purchasing half gallons of milk instead of gallons.”
Sales at Walmart International increased more than 16% to more than $30 billion, partly driven by exchange rates (up 7.1% to $27.8B on a currency neutral basis) and strong performances in Mexico, the U.K., Canada, Brazil and China. In addition, the company completed its acquisitions of the 147 Netto stores in the U.K. (consolidated in financials) and the 51% majority ownership position in Massmart Holdings in Africa (will start being consolidated in Q3); combined, the two acquisitions added 462 new units to Walmart’s retail operations.
At Sam’s Club, sales increased by 9.5% to $13.65 billion, driven by impressive same store sales growth of 5% (excluding fuel) when compared to Q2 2011. Mike Duke had this to say: “This is the sixth straight quarter of comp improvement for Sam's, a testament to the team's execution to drive quality, value and savings for members.” Management expects comparable sales at Sam’s Club to increase between 3-5% in comparison to Q3 2011.
The company returned $2.7 billion to shareholders through dividends ($1.3 billion) and share repurchases (26.1 million shares, at an average cost of roughly $53.64/share) in the second quarter, and more than $6 billion through the first half of the fiscal year. In June, the board of directors approved a new $15 billion repurchase authorization, which has $14.1 billion remaining.
Second quarter diluted EPS from continuing operations were $1.09 (guidance was $1.05-$1.10), an increase of 12.4% from the $0.97 per share from continuing operations in Q2 2011. As a result of the strong start to the year, management raised full year EPS guidance range to $4.41 to $4.51; at the time of writing, the stock was up nearly 4% to just under $52/share.
