Wal-Mart Comps and Sales Fall Short in Q1 2014
It’s been a harsh winter for Wal-Mart and shoppers alike. After reporting its smallest growth in quarterly sales in almost five years, shares fell approximately 3% before the bell on Thursday, according to Reuters. This is the fifth consecutive quarter of stagnant or negative same store sales, so what's happening? Wal-Mart claims it’s due to bad weather, but could it be something more?
Analysts note that Wal-Mart’s quarter may also have been disrupted by price comparison reports as well as the struggling lower-income consumer base. With further competition in the brick-and-mortar space, how can the world’s largest retailer continue to expand in times like these? Are small format stores the key, or more investments in e-commerce?
Consolidated net sales for the first quarter were $114.2 billion, an increase of 0.8% over last year. Same-store sales dropped by about 20 basis points, while customer visits fell 1.4%, according to the report. As of 1:27 PM ET, shares are down $2.01 to $76.73, a 2.55% decrease.
“Wal-Mart’s underlying business is solid, and I’m confident in our long-term strategies,” said President and CEO Doug McMillon. “We remained focused on growth across the enterprise, especially in small formats like Neighborhood Market in the U.S.”
As we recently reported on ANUK, Wal-Mart’s online sales growth actually beat Amazon’s, and sales worldwide rose approximately 27%. Check out our previous story, linked below. There won’t be any more weather woes to fall back on now that we’re moving into the warmer months. Is e-commerce the key to building the business back up?
Click here to read: Wal-Mart Overtakes Amazon in Web Sales Growth in 2013
“We have the opportunity to create transformative growth through stronger e-commerce capabilities,” continued McMillon. “Our investments are focused on improving customer experience and fulfillment capacity. We’re working to deliver a relevant, personalized, and seamless customer experience across all channels to further grow sales.”
It might have been a slow quarter, but it’s apparent that the company has been trying to keep its sales up with further investments into e-commerce and plans to reduce prices for organic groceries. Are these latest results a sign that Wal-Mart will continue to revamp its strategy?
Stay tuned to AndNowUKnow as we continue our coverage on Wal-Mart’s financial performance.
