Wal-Mart’s Q1 sales, profit disappoints; issues tepid Q2 outlook
Bentonville, Ark. — Wal-Mart Stores on Thursday reported profit and sales that were just below Wall Street expectations as the giant retailer struggled with a number of issues that impacted its U.S. sales, from the payroll tax increase to an unseasonably cold spring to delayed tax returns. The discounter also scaled back its earnings expectations for the current three-month period.
Wal-Mart’s net income rose 1.1% to $3.8 billion. Revenue edged up 1%, to $113.4 billion.
"Frankly, we had a more difficult quarter than expected when we announced our guidance in February,” said Wal-Mart CEO Mike Duke on the company’s first quarter earnings conference call. “Sales were pressured primarily by delayed tax refunds, which caused customers to put off discretionary purchases. And though no one likes to talk about weather, it was a real factor across the United States… .”
Same-store sales in the United States fell 1.4%, while comp traffic was down 1.8% and the average ticket increased 0.4%.
"Despite comps being lower than expected, we continued to generate market share gains," stated Bill Simon, Walmart U.S. president and CEO. "According to The Nielsen Company, we gained 20 basis points of market share in the measured category of ‘food, consumables and health & wellness/OTC’ during the 13-weeks ended Apr. 27, 2013."
Simon was optimistic looking forward, and said that the second quarter is off to a good start, with positive comps.
"We continue to believe in the strength of our strategic plan to deliver a broad assortment with EDLP,” he said. “We also continue to monitor the impact of the 2% payroll tax increase.”
At Sam’s Club, sales rose 0.2%, while comp traffic was up 1.3%, while ticket was down 1.1% for the 13-week period ended April 26.
"Comp sales for the first quarter were impacted by unfavorable weather and less than expected inflation," stated Rosalind Brewer, Sam’s Club president and CEO. "Our business member is an integral part of our business, and comp sales and traffic patterns indicated that they remained pressured in the first quarter.”
In remarks released with the company’s results, Duke echoed Simon’s optimism.
“I’m confident about our long-term strategy and the direction Walmart is headed," he stated. "Our expectations about our U.S. businesses’ performance, coupled with more discipline in International, will allow us to improve our performance throughout the year."
Duke also noted that the chain’s e-commerce sales grew more than 30% in the first quarter versus last year.
"There is no doubt that our company is making the right investments in e-commerce to differentiate ourselves and become a better Walmart," said Duke. "And with our sales growth in the first quarter, we believe our investments are paying off."
Contingent Network Services helps Finish Line overhaul customer experience
New York — Contingent Network Services has announced the successful completion of a strategic IT project to deploy new in-store technology to stores operated by The Finish Line. The retailer has reinvented its in-store shopping experience at all locations with a total store overhaul and technology refresh that included implementation of innovative mobile POS and interactive kiosk technologies. Contingent provided Finish Line with incremental project and technology experts to manage the in-store deployment for 320 of the 664 sites completed within the overall project.
The benefits of this changeover include better information at the fingertips of store associates, a more convenient mobile checkout process, and an increasingly interactive customer experience for Finish Line customers, according to Contingent.
“Contingent has proven their ability to manage a complex deployment project that satisfies our high standards for timeliness and quality,” said Rob Baugh, director of store application delivery for Finish Line.
To execute the project, Finish Line leveraged Contingent’s On Demand StoreWorX service which offers full project management, real-time project status visibility, a lifetime workmanship warranty, and a predictable pricing and service level approach that is consistent across all sites.
Club Monaco launches lookbook on Tumblr
NEW YORK — International lifestyle brand Club Monaco is leveraging the power of social media to promote its fashion apparel and accessories. It has launched an interactive fashion lookbook on Tumblr.
Club Monaco hopes to use the visually driven platform to expand its reach and entice consumers to see and share fashion looks months before they hit the stores.
"Tumblr allows us to take an industry standard press-room and redefine it as a social media outlet for consumers," says Ann Watson, VP of marketing and communications, Club Monaco. "This innovative, exciting collaboration is an industry game-changer because it gives editors direct access to seasonal assets that are downloadable and allows consumers to curate, and share Club Monaco fashions by downloading the fashion themed, Tumblr template. In effect, consumers can become their own editors and develop their own wide-scale fashion community thanks to the help of Club Monaco and Tumblr."
Club Monaco opted to use social celebrities instead of traditional models in its fall campaign and is relying on Tumblr bloggers to be models in the lookbook, leveraging their social currency and celebrity status to expand its network.
Club Monaco considers Tumblr the perfect brand partner because its platform features more than 100 million blogs giving it an enormous, global reach of nearly 50 billion posts. Club Monaco has already reported success on Tumblr. Its Culture Club blog offers a glimpse into the brand’s lifestyle and how they curate the world of culture. The blog’s motto "Get Inspired By What Inspires Us," has sparked global conversations on food, art, fashion, photography, music and travel and has already amassed more than 200,000 followers.
"It was a strategic decision to expand Club Monaco’s presence on Tumblr, as both companies already have an established and engaged social community," noted Watson. "As the first online social experience rooted in creation and curation, Tumblr’s DNA is about connecting users via creative content. The new Club Monaco Lookbook on Tumblr provides the consumer with an interactive, engaging, brand experience. With today’s launch, we are taking our social experience for the consumer one step further."
Headquartered in New York City’s Chelsea Gallery district, Club Monaco operates more than 140 points of distribution worldwide with flagships in the United States, Canada, Sweden, Hong Kong and Shanghai. A subsidiary of Polo Ralph Lauren Corporation, it is an international retail concept that designs, manufactures and markets its own men’s, women’s and accessory collections.