Wal-Mart sales beat view on grocery, school supplies
NEW YORK (Reuters) - Wal-Mart Stores Inc (WMT.N) reported better than expected August sales at U.S. stores open at least a year and gave an optimistic forecast for September as shoppers seek low prices on groceries and school supplies.
The world's biggest retailer said on Thursday that August same-store sales were strongest in grocery and medicines. Electronics, fitness equipment and camping items also did well.
Analysts, on average, were expecting same-store sales to increase 1.6 percent, according to Thomson Reuters Estimates, while Wal-Mart itself had forecast a rise of 1 percent to 2 percent, excluding fuel sales.
Wal-Mart, whose shares have gained nearly 40 percent in the last year, has outperformed other retailers as cash-strapped consumers respond well to its lower prices.
During a presentation at a Goldman Sachs conference, Chief Executive Lee Scott said consumers worldwide were pulling back in some areas, but still splurging for hot consumer electronics such as video games and flat-screen television sets.
Scott said Wal-Mart was planning for next year's economy and the company's profit margins would be in line with this year.
"For the most part we see next year as a challenging year, but one in which we can do well," Scott said.
Looking abroad, Scott said the company's international expansion plans would concentrate on the "major" markets of India, China, Brazil, Canada and Britain, although Wal-Mart is "exploring" Russia and Eastern Europe.
BEIJING SUPPLIER MEETING
Scott said Wal-Mart was meeting with roughly a thousand of its suppliers next month in Beijing to talk about Wal-Mart's commitment to "socially responsible sourcing."
"It is my belief that a person who cheats on overtime, forced labor, the age of the labor ... a person that dumps chemicals in rivers and cheats on their taxes ... there's no way that that person is not going to cheat on us," he said.
Because of Wal-Mart's size and clout, it will be able to make a "significant change" in the quality of factories and products over the next 3 to 5 years, Scott said.
Wal-Mart has already set a long-term goal of using only renewable energy and creating zero waste. It has challenged its suppliers to cut back on packaging and boost energy efficiency in products.
BACK-TO-SCHOOL PICKS UP
Back-to-school sales, especially of jeans, school supplies and home furnishings for college dorms, picked up toward the end of the month, Wal-Mart said, as many shoppers delayed purchases while some schools open later this year. Continued...
