A revenue boost over the year before reverses a two-year sales slump.
Wal-Mart’s effort to reverse a two-year sales slump at its U.S. namesake stores is beginning to work. The world’s largest retailer said Wednesday during a meeting with analysts that revenue at its namesake stores in the U.S. that have been open at least a year rose three months in a row in July, August and September after more than two years of quarterly declines. Wal-Mart had promised a quarterly increase by the end of this year, and Wednesday’s news indicates it could make good on that vow in the current quarter, which ends Oct. 28. “We have had very positive momentum in the back half, especially in the U.S,” said Charles Holley, Wal-Mart’s executive vice president and chief financial officer. “We have more opportunities to grow more sales in the U.S. and around the world. But we will be deliberate.” Wal-Mart also said it expects its expenses to increase more slowly than its sales for the second year in a row. The last time that happened was 1992, Holley noted. Wal-Mart has vowed to reduce expenses even more aggressively over the next five years and put those savings into reducing the prices its customers pay. The weak U.S. job market and other economic woes have strained the core low-income shoppers at Wal-Mart’s namesake stores in the U.S., while the somewhat higher-income clientele of the company’s Sam’s Club warehouse stores has been more resilient. Wal-Mart’s namesake stores in the U.S. also stumbled in recent years because of mistakes the company made in merchandising and pricing. The chain, based in Bentonville, Ark., now has restocked thousands of products it scrapped in an overzealous bid to clean up its stores. It’s also stopped using gimmicks such as slashing prices temporarily on select items and returned to its “everyday low price” strategy, the bedrock philosophy of founder Sam Walton. Analysts have been closely watching for an end to the sales declines at Wal-Mart’s namesake U.S. stores, which account for 62 percent of the company’s total revenue. On Nov. 15, Wal-Mart will report its results for the current quarter.
