Wal-Mart Stores Inc, the world's largest retail group, has reported on its results for the fourth quarter and full-year ended 31 January 2012, with sales and income improvements noted for both periods.
For the fourth quarter, net sales came in at US$122.3bn, an increase of 5.8 per cent from US$115.6bn in the fourth quarter last year, and included US$2.4bn of positive impact from the acquisitions of Netto stores in the UK and Massmart in South Africa.
Income from continuing operations attributable to Walmart for the fourth quarter of fiscal 2012 were US$5.2bn, up 3.4 per cent from US$5bn last year.
For the full year of fiscal 2012, consolidated net sales grew 5.9 per cent to US$443.9bn, including approximately US$4.7bn of positive impact from acquisitions and US$4bn from currency exchange rates.
Income for the year from continuing operations attributable to Walmart was US$15.8bn, up 2.7 per cent on the US$15.4bn recorded last year.
'We are pleased with Walmart’s earnings performance for both the fourth quarter and the full year,' said Mike Duke, Wal-Mart Storespresident and chief executive officer. 'Today, every segment of our business is stronger than it was a year ago, and we’re in a great position for fiscal year 2013.'
Natalie Berg of retail industry analyst Planet Retail said that the results painted a 'mixed picture', highlighting an improvement in its US market but warning of growing competition from the online market.
'In the US, Walmart is finally gaining traction by focusing on its core customers,' she explained. 'Initiatives such as layaway and price guarantees have struck a chord with hard-pressed shoppers, while ongoing improvements in merchandising and availability have also helped to restore confidence. Walmart learned the hard way that it cannot veer too far from its core. Low prices and a wide assortment of brands are integral to its success.
'That said, the key challenge for Walmart going forward will be maintaining this concept in the face of the ever-growing online threat. Walmart has been scrambling to make up lost ground in this area, and crucially now has a leadership team in place with the relevant experience to drive this forward. Walmart has been planting big boxes for the past 50 years but, like its global peers Tesco and Carrefour, is struggling to maintain its relevance in today’s digital world. Going forward, Walmart’s bricks and mortar strategy must become much more event-driven and supported with exclusive ranges to avoid direct price comparisons. While we maintain that Amazon poses the biggest threat, Walmart has the opportunity to leverage its physical store base. More needs to be done to create a seamless shopping experience across all channels.'
Berg added that she did not expect Walmart to press forwards with any new market entries this year, although longer-term targets for the group could include Russia.
'This year, Walmart will have its hands full with further integration in South Africa and, to a lesser extent, the UK,' Berg explained. 'Entry into the Middle East with George franchised stores will be cautious, but if successful could represent a new route to market in other parts of the world.'
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