OREANDA-NEWS. Wal-Mart Stores, Inc. (Walmart) reported first quarter diluted earnings per share (EPS) of USD 1.14, a 4.6 percent increase compared to last year's first quarter EPS of USD 1.09.
Walmart U.S. and Sam's Club, excluding fuel, expect to increase comps for the Q2 13-week period to between flat and 2 percent and 1 and 3 percent, respectively.
The company expects to deliver EPS for Q2 between USD 1.22 and USD 1.27, compared to USD 1.18 last year.
Walmart U.S. comp sales declined 1.4 percent in the 13-week period from Jan. 26 to Apr. 26, 2013. Comp sales performance was impacted by a delay in income tax refund checks, challenging weather conditions, less grocery inflation than expected and the payroll tax increase. Walmart U.S. gained market share1 in the measured category of "food, consumables and health & wellness/OTC."
Walmart International grew net sales 2.9 percent to USD 33.0 billion. On a constant currency basis2, Walmart International's net sales would have increased 5.4 percent to USD 33.8 billion. Walmart International gained market share3 in a majority of the countries in which we operate.
Comp sales, without fuel, at Sam's Club were up 0.2 percent during the period, pressured by softer business member traffic, weather and lower than expected inflation.
Consolidated net sales reached USD 113.4 billion, an increase of USD 1.2 billion, or 1.0 percent. Currency exchange rate fluctuations had a negative impact on net sales of USD 1.0 billion.
Consolidated operating income was USD 6.5 billion, an increase of 1.1 percent over last year. Walmart U.S. and Sam's Club grew operating income 5.9 percent and 7.4 percent, respectively.
Walmart reported free cash flow2 of USD 1.9 billion for the quarter ended Apr. 30, 2013.
The company returned USD 3.8 billion to shareholders through dividends and share repurchases in the first quarter.

1 Sources: The Nielsen Company, 13 weeks ended Apr. 27, 2013.

2 See additional information at the end of this release regarding non-GAAP financial measures.

3 Sources: Africa: Statistics South Africa, Argentina: The Nielsen Company, Canada: The Nielsen Company, Central America: The Nielsen Company, Chile: National Statistics Institute (INE), China: National Bureau of Statistics of China (NBSC), Japan: Ministry of Economy, Trade and Industry (METI).

Wal-Mart Stores, Inc. (NYSE: WMT) today reported financial results for the first quarter ended April 30, 2013.

 Net sales for the first quarter were USD 113.4 billion, an increase of 1.0 percent over last year. Net sales last year benefited by 1.0 percent from the extra day due to leap year. On a constant currency basis1, net sales would have increased 1.8 percent to USD 114.2 billion. Membership and other income increased 1.6 percent versus last year, due primarily to an increase in membership income. Total revenue for the first quarter was USD 114.2 billion, a 1.0 percent increase over last year.

 Consolidated net income attributable to Walmart for the first quarter was USD 3.8 billion, up 1.1 percent. Diluted earnings per share attributable to Walmart (EPS) were USD 1.14, a 4.6 percent increase, compared to USD 1.09 last year.  Solid earnings performance 


 "In a quarter marked by considerable headwinds to top line sales, Walmart delivered solid EPS growth of 4.6 percent," said Mike Duke, Wal-Mart Stores, Inc. president and chief executive officer. "Walmart's mission is simple and focused -- to help people save money so they can live better. When we simplify and focus our execution against this mission, it's easy for our associates to prioritize what they have to do to serve our customers.

 "I'm confident about our long-term strategy and the direction Walmart is headed," Duke added. "Our expectations about our U.S. businesses' performance, coupled with more discipline in International, will allow us to improve our performance throughout the year."

 Duke also noted that e-commerce sales grew more than 30 percent in the first quarter versus last year.

 "There is no doubt that our company is making the right investments in e-commerce to differentiate ourselves and become a better Walmart," said Duke. "And with our sales growth in the first quarter, we believe our investments are paying off."  Leverage


 The company's operating expense leverage was relatively flat for the first quarter, but the commitment to leverage for the full year remains a priority.

 "We are proud that our U.S. segments leveraged operating expenses in the first quarter, and we expect them to continue leveraging," said Duke. "To operate in a difficult sales environment requires disciplined expense and productivity management, the core of EDLC and EDLP. We are committed to have the total company achieve expense leverage for the year."

 "Although we believe our company will leverage expenses for the year, the second quarter will be challenging, given expense pressures in International and our corporate area," said Charles Holley, executive vice president and chief financial officer. "Expense leverage may not be delivered evenly across the quarters, but we believe that by executing our plans, we will continue to reduce expenses and improve productivity."

1 See additional information at the end of this release regarding non-GAAP financial measures  Strong returns


 "We deployed cash to grow our business and return value to shareholders," said Holley. "Despite the multiple headwinds during the quarter, we grew operating profits ahead of sales growth. Our balance sheet is strong, and we continue to grow."

 During the first quarter, the company repurchased approximately 30 million shares for USD 2.2 billion. In addition, the company paid USD 1.6 billion in dividends. As previously announced, the company increased its dividend by 18 percent for fiscal 2014 to USD 1.88 per share.

 Return on investment1 (ROI) for the trailing 12 months ended April 30, 2013 was 17.8 percent, compared to 18.1 percent for the prior trailing 12 months ended April 30, 2012. The decline was primarily the result of acquisitions, along with an increase in fixed assets within Walmart's base business.

 Walmart ended the quarter with free cash flow1 of USD 1.9 billion, compared to USD 3.1 billion in the prior year. An increase in income tax payments due primarily to changes in federal bonus depreciation rules and an increase in capital expenditures contributed to the free cash flow decline.  EPS Guidance.

 "Given current business and economic trends, including currency, we expect second quarter EPS to be in the range of USD 1.22 to USD 1.27," said Holley. "Investments in Global eCommerce initiatives were forecast to have an incremental USD 0.09 impact for fiscal 2014, and this remains in our guidance. We expect the Q2 impact to be in line with the USD 0.02 per share we had in the first quarter. In addition to eCommerce initiatives, expenses related to FCPA matters are expected to range from USD 65 to USD 70 million for the second quarter."

 Last year, Walmart delivered USD 1.18 in EPS for the second quarter.