BENTONVILLE, Ark. — Price investments in food and other consumables helped drive sales growth at Wal-Mart Stores in the first quarter, but also pressured profit margins at the world’s largest retailer.
“Price was the focus of our first-quarter marketing, and this will continue to be a key message this year,” said Bill Simon, president and chief executive officer, Walmart U.S., in a prerecorded earnings call on Thursday.
Comparable-store sales in the U.S. division, which does not include Sam’s Club, were up 2.6% for the 13-week period ending April 27. Traffic was up 1.1% and the average ticket size increased 1.5%, relative to the comparable period of a year ago, the company said.
Operating income in the U.S. grew 8.1% in the first quarter, to $5 billion, on a 5.9% increase in sales, to $66.3 billion. The company said gross profit in the U.S. was up 4.9% to $18 billion, but the gross profit rate was down 24 basis points vs. a year ago, reflecting the price investments.
Overall, the company posted a 9.2% increase in net income, to $3.7 billion, on an 8.5% gain in revenues, to $113 billion. Operating income was up 7.7% at Sam’s Club to $490 million, and up 21.2% at Walmart International, to $1.3 billion. Comps were up 5.3%, excluding fuel, at Sam’s Club in the U.S.