The largest US retailer Wal-Mart Stores reported stronger sales during the winter holiday season, which is in stark contrast to the poor results of competitors with physical stores, including Target and Macy’s. Wal-Mart reported that sales from stores open at least 12 months ago, rose by 1.8% in the quarter to January 31, which is the 10th consecutive quarter of growth. Many consumers spend more in stores than before. However, the power of American business of the company continues to be at the expense of profit, which decreased by 18% during the quarter.
The largest US retailer invested billions dollars to increase salaries, reduce prices and increase sales from e-commerce to compete better with Amazon.com.
However, the growth in global e-commerce sales of Wal-Mart has slowed compared to the previous quarter. The online sales were up 16%, including sales from the first full quarter of Jet.com, which Wal-Mart bought in September. In the previous quarter Internet sales had increased by 21%.
Growth in sales of developed stores is mainly due to the strength of the business with health and wellness products, helped by growth of prices of medicines, a large number of recipes and higher sales of medicines without prescriptions. The businesses with groceries continues to face pressure from deflation in food prices and strong sales of clothing have led to growth in general merchandise category.
Wal-Mart announced an increase of the annual dividend of 2% to 2.04 USD per share.
During the quarter ending in January, Wal-Mart posted a profit of 3.76 billion USD, or 1.22 USD per share, against 4.57 billion USD, or 1.43 USD per share, for the same period of the previous year.
The revenue of Wal-Mart rose by 1% to 130.94 billion USD. Without currency fluctuations company said that revenue would increase to 133.6 billion USD.
For the year ending in January 2018, Wal-Mart expects earnings between 4.20 and 4.40 USD per share, which corresponds to previous forecasts that profits will remain unchanged.