Half a year has gone by and Wal-Mart (WMT) released results yesterday.
26 week sales results at Wal-Mart stores are up 5.5%, Sam's Clubs are up 7.1% and the International operations are up 16.2%. Total sales results are up 8% vs. 2006. Not bad at all.
At Wal-Mart stores grocery sales were once again stronger than general merchandise sales. Perishables led the increase in grocery, with solid performance in dairy and bakery, as well as pharmacy. Electronics continued to show solitore sales gains over last year, with strength in TVs, computers, digital cameras and video games.
At Sam's Clubs sales have been driven by continued momentum with small business owners. Sales were driven by increases in average ticket. In addition to small business categories, other strengths included electronics, fresh food and grocery. As the month of August gets under way, the clubs are completing the transition from summer outdoor goods to a furniture gallery and back-to-college in many markets. A fall merchandise transition will begin in September.
Here is a small but very notable paragraph from the release "In comparable Wal-Mart stores, traffic was negative for the month. However, the trend improved for the third consecutive reporting period. The Central and West geographic regions of the Wal-Mart stores were strongest for the period." Why is it so meaningful? It means people are beginning to go back to Wal-Mart to shop and that is very good news for shareholders. With all the unwarranted negative publicity they have endured the past three years, Wal-Mart became a dirty word. It would seem now that it is beginning to wear off and when push come to shove, people's pocket book rules. Now that the image of Wal-Mart is slowly beginning to stand for "great prices on quality" rather than just "cheap", this trend should continue.
Wal-Mart is also doing it's usual masterful job with costs as "Fuel sales impacted the Sam’s Club sales figures for the four-week period ending August 3, 2007 by negative a 0.2 percentage point. Fuel sales had no impact on the total U.S. comparable store sales figures for the four-week period ending August 3, 2007."