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Wal-Mart’s Q1 sales, profit disappoints; issues tepid Q2 outlook

BY Marianne Wilson

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."

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Club Monaco launches lookbook on Tumblr

BY CSA STAFF

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.

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Engaging employees with gamification at Walmart

BY CSA STAFF

BOSTON — Walmart has partnered with Inward Strategic Consulting to design an innovative way to engage with staff and foster what the company hopes is a fun yet productive work environment that enhances customer experience.

Walmart plans to introduce gamification to increase employee engagement and plans to discuss that process and the lessons it has learned at the Conference Board, Extending Your Brand to Employees, on May 16-17, in Chicago. Gamification is a form of learning and engagement that uses games to tap into people’s natural desire for competition, achievement, status and rewards. Presenting will be Kurt Templeton, director of workforce planning at Walmart, along with Whitney Cook, consultant and account manager at Inward Strategic Consulting.

"This is the third year Inward has been a sponsor of this conference, and we are thrilled to use this opportunity to promote employee engagement as a means to improve customer experiences," said Allan Steinmetz, CEO and founder of Inward Strategic Consulting.

"By using innovative strategies like gamification, major brands can engage, educate and interact with their employees on new and exciting levels," added Cook.

Inward Strategic Consulting is a leading brand engagement consulting firm that specializes in vision, mission and values, team alignment, internal branding, change communications, external branding and communications planning with offices in Boston, Bentonville, Chicago, San Francisco and Orlando.

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