Even as it gears up for a fight to enter the D.C. market, retailing giant Wal-Mart is facing new questions at the corporate level after reporting mixed financial results Tuesday for its most recent quarter, including a seventh straight drop in per-store sales in the United States.
The Arkansas-based company's Sam's Club division saw per-store sales increase by 2.7 percent during the 13-week period ending Jan. 28, compared with a year earlier, but the flagship Wal-Mart stores saw a drop in comparable sales of 1.8 percent, the company said. Investors sent the chain's stock down 3.1 percent on the news Tuesday.
Wal-Mart's net sales reached $115.6 billion for the fourth quarter, a 2.5 percent increase from last year, but short of analysts' expectations. The company, which accounts for more than 10 percent of the U.S. retail market, did report a fourth-quarter profit of $5.02 billion, or $1.41 per share, compared with $4.82 billion, or $1.26 per share, for the quarter ending Jan. 31, 2010.
"We're pleased with our strong earnings performance for both the quarter and the full year across our three operating segments," said Wal-Mart Inc. CEO Mike Duke in a statement Tuesday. "At the same time, we are disappointed by our Wal-Mart U.S. fourth-quarter sales."
With the company's D.C. plans still in the pipeline, Joseph Feldman, senior retail analyst for the New York-base Telsey Advisory Group, said the drop in sales should not cause any major concerns.
"Clearly, the [per-store sales number] is not positive," said Mr. Feldman in a phone interview. "That is unfortunately the one thing people are focusing on. Operations at Sam's Club businesses were strong. I'm arguing that despite that one mark on the earnings report … the rest of the business is operating quite well."
About 80 percent of Wal-Mart U.S. sales are paid in cash, and credit card payments have dropped within the last year. The fact that Wal-Mart's sales dropped as much as they did should have no affect on the company's expansion plans, according to Mr. Feldman.
He also predicted Wal-Mart's entry into the D.C. market would have a positive impact on the local retail scene.
"I think it will drum up some new interest," he said. " I think [the new stores] will be a welcome addition of the community, and it will put pressure on the grocers in the area."
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