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Wal-Mart also is touting its return to the "Every Day Low Price" message of founder Sam Walton with a new ad campaign. It had gotten away from that philosophy, instead offering sharp discounts on only relatively few items.
In a prerecorded conference call, company officials said the changes are "gaining traction." But Charles Holley, Wal-Mart's chief financial officer, declined to give a timetable on when growth for the key revenue measure would return.
Competitors have been beating Wal-Mart on selection and price. Drugstores and dollar stores, typically located near shoppers' homes, have expanded their selections to include popular food brands, and offer small-size packages, ideal for shoppers on a budget.
Supermarket chain Aldi, an import from Germany that offers store brands at about half the price of national labels, is also becoming a formidable player, said Craig Johnson, president of Customer Growth Partners, a retail consultancy.
Besides trying to undo its mistakes, Wal-Mart is investing more online as shoppers gravitate toward the Web. It also plans smaller stores called Walmart Express the size of drugstores and less than a tenth the size of its supercenters. Wal-Mart also said Tuesday that it's scaling back on plans to convert discount stores to supercenters that carry full lines of groceries.
"We just want to make sure we have the assortments right," Holley said during a separate call with media.
Wal-Mart's net income rose to $3.39 billion, or 97 cents per share, in the three months ended April 30. That compares with $3.3 billion, or 87 cents per share, in the same period last year.
Revenue, excluding membership fees from Sam's Club warehouse stores, rose 4.4 percent to $103.41 billion.
Analysts expected earnings of 95 cents on revenue of $102.76 billion, according to FactSet. Wal-Mart's shares fell 52 cents to close at $55.54.
Wal-Mart's US division posted a 0.3 percent drop in revenue at stores open at least a year, dragged down by a 1.1 percent drop at its namesake stores. That measure rose 4.2 percent at Sam's Clubs, which has drawn more customers because of its push to remodel stores and carry better-quality food and other merchandise.
During the latest quarter, groceries and health and wellness items were the star performers. Bill Simon, president and CEO of Wal-Mart's U.S. division, said the chain is seeing business in basic household items like paper goods and shampoo recover.
But clothing, electronics and home furnishings remained weak. The company said it hasn't been able to lure grocery customers to shop the clothing aisles.
For the second quarter, Wal-Mart expects earnings per share between $1.05 per share and $1.10 per share. The estimates assume that currency exchange rates remain at current levels. Analysts forecast $1.08 per share.