Wal-Mart's June Comps Beat Expectations

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Wal-Mart's June Comps Beat Expectations

Wal-Mart Stores, Inc. said yesterday its same-store sales in June beat expectations, jumping 5.8 percent with help from strong grocery sales and a boost from tax-rebate checks. The Bentonville, Ark.-based retailer is raising its guidance based on the results.

Wal-Mart’s net sales for the five-week period ending July 4 were $39.94 billion, an impressive 11.5 percent increase from the same period last year.

At Wal-Mart’s namesake discount stores and Supercenters, same-store sales rose 6.1 percent, while total sales were up 10.1 percent. The retailer’s Sam’s Club unit saw a 4.6 percent boost in same-store sales and an 8.9 percent jump in net sales.

"Our underlying business is strong because of price leadership, clearly defined product offerings, and a better store experience that continue to drive customers to our stores," said Eduardo Castro-Wright, Wal-Mart U.S. president and c.e.o. "Customers like what they are seeing, and they're shopping more of the store. Assortments and brands have improved, which bodes well for the upcoming seasons, including back-to-school."

Sam's Club sales during the June period had strengths in fresh foods, dry grocery, and consumables.

"Our estimate for U.S. comparable store sales, excluding fuel, for the July four-week period is between two and four percent," said Tom Schoewe, e.v.p. and c.f.o. "The Wal-Mart U.S. underlying business remains strong. However, consumers and small business owners remain concerned about the economy, inflation, and most of all, higher gas prices. With the last large mailing of economic stimulus checks due this Friday, it is difficult to forecast the benefit from the economic stimulus through the remainder of the year.”

Because of its improved sales results during the quarter, Schoewe said the retailer has updated its guidance estimate for earnings per share for the second quarter of fiscal year 2009 to a range of $0.82 to $0.84.