Wal-Mart Sees Flat November

Another same-store sales setback for the giant retailer.
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Wal-Mart (WMT) - Get Report said it expects to follow a weak October sales performance with a weaker November.

The Bentonville, Ark., discount giant said it expects to post flat U.S. same-store sales in November. That showing will come after October's scant 0.5% gain in stores open at least a year. Wal-Mart blamed the effect of last year's restocking efforts in the wake of Hurricane Katrina.

"The U.S. Wal-Mart stores that were not impacted by the 2005 hurricanes had comps of approximately 1.7% in October," said Wal-Mart. "Last year, we saw a positive impact on comps from customers who restocked their homes after the hurricanes and this continued through the end of the fiscal year. The impact on comps from hurricanes will continue, but will soften somewhat during the next three months.

"Our remodeling efforts in the Wal-Mart Stores division wrap up during the next two weeks to ensure there is no disruption for our customers during the holiday shopping period," it added. "Remodeling activities will begin again in late January and will continue into the next fiscal year."

Trends for October sales were similar to September, with food and consumables outpacing general merchandise.

"As in September, apparel sales, particularly in women's apparel, were softer than expected," finance chief Tom Schoewe said. "We're continuing to work longer term to improve the balance between fashion and core essentials in our stores. Short term, we're working to maximize holiday opportunities by focusing on leveraging inventory."

Schoewe added that aggressive "rollback" advertising and marketing programs should reinforce Wal-Mart's price leadership position to customers in the fourth quarter.

"Price rollbacks on key toys that went into effect in mid-October generated significant lift in unit volume," Schoewe explained. "In electronics, another dynamic category for the holiday season, we have several initiatives planned to drive holiday sales. We have expanded our brand offerings, improved our product presentations in the store, reinforced our value pricing and doubled the assortment of accessories."

The company said total sales for the month ended Oct. 27 rose 11.7% from a year ago to $25.71 billion. Same-store sales rose 0.3% at Wal-Mart and 2% at Sam's Club.