Wal-Mart Logs Modest October Sales; November Outlook Cautious

BENTONVILLE, Ark. - Wal-Mart Stores, Inc. said yesterday its October same-store sales rose a modest 0.5 percent in the U.S., which was below its already lowered expectations, and represented the smallest gain in more than two years.

Total sales for the four-week period ended Oct. 27 rose 11.7 percent to $25.71 billion.

The retailer also said that it expects sales at its U.S. stores open at least a year to be roughly flat in November.

Wal-Mart International's net sales fared much better, with a 32.1 percent increase for the four-week period including sales from the consolidation of Seiyu and Wal-Mart Central America and the acquisition of 139 units in Southern Brazil.

The company continues to see a negative impact on comparable store sales from the hurricanes last year and its extensive remodeling program, according to Tom Schoewe, Wal-Mart's e.v.p. and c.f.o.

"The U.S. Wal-Mart stores that were not impacted by the 2005 hurricanes had comps of approximately 1.7 percent in October," said Schoewe in a statement. "Last year, we saw a positive impact on comps from customers who restocked their homes after the hurricanes and this continued through the end of the fiscal year. The impact on comps from hurricanes will continue, but will soften somewhat during the next three months.

"Our remodeling efforts in the Wal-Mart Stores division wrap up during the next two weeks to ensure there is no disruption for our customers during the holiday shopping period," he added. "Remodeling activities will begin again in late January and will continue into the next fiscal year."

Trends for the company's October sales were similar to September, with food and consumables outpacing general merchandise.

"As in September, apparel sales, particularly in women's apparel, were softer than expected," Schoewe said. "We're continuing to work longer term to improve the balance between fashion and core essentials in our stores. Short-term, we're working to maximize holiday opportunities by focusing on leveraging inventory."

Schoewe added that the company's aggressive "rollback" advertising and marketing programs should reinforce Wal-Mart's price leadership position to customers in the fourth quarter.

The company's pharmacy sales were strong again in October, said Schoewe. Pharmacies in Wal-Mart, Sam's Club, and Neighborhood Markets now offer the $4 generics program on 314 generic prescriptions in 27 states.

In other news, Wal-Mart said yesterday it will give a $1 million grant to the Business Consortium Fund (BCF), which was established by the National Minority Supplier Development Council (NMSDC) to address the lack of traditional lending opportunities for minority businesses. The grant comes after the company made an initial $1 million donation to the BCF last October.

Wal-Mart said it currently works with more than 3,600 diverse suppliers.
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