Wal-Mart U.S. stores sales decline for first time

By IBTimes Staff Reporter | February 18 2010 8:18 PM

Quarterly sales at Wal-Mart stores in the U.S. fell for the first time in the giant retailer's history.

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Sales were $70.969 billion, down 0.5 percent from the same quarter a year ago. Comparable store sales - which measure sales at stores open for more than one year - fell 2.0 percent.

Wal-Mart CEO Mike Duke said he was disappointed that comparable store sales were below expectations.

In a day when the Dow Jones Industrial Average closed up 0.81 percent, Wal-Mart (NYSE:WMT) closed down 1.09 percent after it reported earnings this morning.

Total sales, which also include International and Sam's Club, rose 4.6 percent to $112.83 billion, missing consensus expectations of $114.36 billion, according Reuters.

Despite the decline the company beat Wall Street's net profit expectations for the quarter with $1.17 earnings per share.

For the year, the growth for Wal-Mart U.S. sales was merely 1.1 percent.

The results in 2009 were in stark contrast with 2008 and 2007, where Wal-Mart U.S. sales grew 6.8 percent and 5.8 percent, respectively. For 2008, comparable store sales grew 1.6 percent for the quarter and 1.0 for the year.

Duke attributed the weak results to deflation, particularly in food and consumer electronic prices. He also states that the economy remains challenging for many of our customers around the world.

Unemployment is forecasted to be higher this year than the last three years in many of our countries, Duke added.

In the U.S., the job market deteriorated significantly in 2009, dropping by more than 4 million jobs.

The latest unemployment rate, reported on February 5, was 9.7 percent. However, the same report showed that non-farm payrolls declined by 20,000. The report from the previous period showed unemployment rate at 10.0 percent and non-farm payrolls declining by 85,000.

Although Wal-Mart reported decreasing sales in its latest quarter and payrolls are decreasing, some economic indicators do point to possible recovery for consumers. The Conference Board's consumer confidence index rose for three straight months and retail sales increased 0.5 percent in January 2010.