Wal-Mart Stores reported $108.6 billion in net sales for the second quarter of fiscal year 2012, an increase of 5.5% compared with fiscal 2011. Operating expenses also increased 5.5% to $21.2 billion during Q2. Income from operations in the quarter was $3.8 billion, an increase of 5.7% compared with the same quarter of last year.
The retailer doesn’t reveal e-commerce sales figures, which is probably not a coincidence given last week’s e-commerce operations shake-up. (To be fair, the company has never revealed e-commerce figures. But it’s also possible those figures have never been any good.) In short, the company’s US e-commerce chief and EVP of global e-commerce for developed markets both resigned. Wal-Mart also said it will require e-commerce teams in US, Canada, the UK and Japan to report directly to their respective store organizations, instead of the global e-commerce management, while teams in China, India and Latin America will report to the global e-commerce division.
The retailer’s earnings beat Wall Street estimates, despite US same-store sales decreasing 0.9%, the company’s ninth straight quarterly decline in this category. CNN argues that Wal-Mart — and its 140 million weekly shoppers in the US — is a barometer of the health of the consumer and the economy.
“Many consumers are still struggling; they’re trading down to match their budget,” said Mike Duke, Wal-Mart Stores president and CEO, during an investors call. “That’s why we’re laser-focused in investing in price to help our customers. We’re committed to widening the gap on price.”
There’s no arguing that our economy is struggling and that consumers are looking for deals wherever they can get them. But the US Census Bureau recently reported that sales in the retail and food services sector increased 7.9% to $2.7 trillion in the first seven months of 2011, compared with the same period of last year.
“We are seeing a resilient consumer,” said Kathy Grannis, director of media relations at the National Retail Federation, in response to the estimate. “This is certainly good news.”
So perhaps Wal-Mart isn’t a barometer of consumer health at all but rather a barometer of consumer preference. Maybe, just maybe, Wal-Mart’s recent e-commerce struggles have more to do with the company’s mediocrity than the economy does.
If you don’t believe me, go ask Amazon.com. The company reported a net sales increase of 51% in the second quarter to $9.9 billion, compared with the second quarter of 2010.