Wal-Mart produces record sales in weak economy
BENTONVILLE, Ark. Wal-Mart’s first-quarter financial results topped analysts’ estimates by a narrow margin, but shares of the company were trading lower Tuesday morning as executives expressed concern about the economic environment.
Total company sales for the quarter ended April 30 increased 10.2 to $94.1 billion and net income increase 6.9 percent to slightly more than $3 billion. Earnings per share of $0.76 exceeded analysts’ estimates by a penny and increased 11.7 percent from $0.68 per share during the comparable period the prior year.
President and chief executive officer Lee Scott attributed the company’s performance to broad based strength across its U.S., international and Sam’s Club business segments combined with a low price image that resonates with consumers during periods of economic weakness.
“We continue to deliver against the business model that Sam Walton started, selling branded merchandise for less,” Scott said. “Our business is even more relevant to our customers today given the current economic pressures.”
That was particularly true in the U.S. where store division president and chief executive officer Eduardo Castro-Wright said customer traffic increased for the first time in several years and customer service scores are at an all time high. He added that the company’s U.S. grocery, health and wellness and entertainment businesses remained strong and the corner has been turned in the apparel business where a return to basic items selling for less than $10 has been well received by consumers.
Sales at the stores division increased 6.6 percent to $59 billion while operating income increase 9.6 percent to $4.4 billion and same store sales, excluding the impact of fuel prices, increased 2.7 percent.
Once again, Wal-Mart’s fastest growing division was international where sales surged 22 percent to nearly $24 billion and operating income increased 15.6 percent to slightly more than $1 billion.
Sam’s Club had a solid quarter, but growth in membership income was less than planned. Sales increased 7.6 percent to $11.1 billion and operating income increased 4.3 percent to $386 million.
Looking ahead to the second quarter, chief financial officer Tom Schoewe said Wal-Mart is well positioned in the current economic environment but given the unclear impact government rebate checks will have on sales the forecast for second quarter same store sales is in a range of flat to 2 percent and earnings per share should fall between $0.78 and $0.81.
American Greetings signs deal with Kathy Davis
CLEVELAND American Greetings has signed a deal with Kathy Davis Studios to exclusively distribute the artist’s designs across a range of products starting in 2009.
The Kathy Davis Collection will debut in Spring 2009 in all American Greetings and Carlton Cards stores. “Her inspiring verse and beautiful art resonate with consumers who are looking for something original and to-date,” said American Greetings vice president of greeting cards Steve Laserson. “This partnership provides a valuable addition to our product offerings.”
Davis began her career in the greeting card business in 1990 and has since become an industry-leading writer, artist and designer whose work appears in cards, apparel, books and home decor.
Walgreens taps outsider to head finance, boosting Rudolphsen to risk management
DEERFIELD, Ill. Walgreens announced this afternoon it has named Wade Miquelon senior vice president and chief financial officer, effective June 16. He will replace William M. Rudolphsen, who has been named to the new role of senior vice president and chief risk officer.
Miquelon, 43, will report to chairman and chief executive officer Jeff Rein. One of the relatively few high-level Walgreens executives hired from outside the company instead of coming up through the ranks, the new chief financial officer comes from Springdale, Ark.-based Tyson Foods, Inc., the world’s largest processor and marketer of chicken, beef and pork, where he was an executive vice president and chief financial officer since 2006.
Prior to that, Miquelon spent 16 years with The Proctor & Gamble Company, the world’s largest consumer goods product company. At P&G, Miquelon was assigned to the company’s headquarters in Cincinnati and offices in Bangkok, Singapore and finally Geneva, Switzerland, where he was general manager and head of finance for Western Europe operations.
“Wade brings an excellent combination of financial knowledge, strategic thinking and operational experience, including mergers and acquisitions, that will serve us well,” said Rein. “He also has a strong background in consumer products and marketing, and is a solid leader with top communication skills. I’ve enjoyed getting to know Wade and believe he’ll be a good fit for us in this key role.”
As chief financial officer, Miquelon will oversee accounting, tax and treasury functions, including investor relations.
Rudolphsen, 53, becomes Walgreens’ first chief risk officer and will continue reporting to Rein. He will oversee the audit, loss prevention, compliance and enterprise risk management functions.
“Bill’s 31 years with Walgreens give him the deep knowledge of our company’s operations and financial sophistication needed for this position,” said Rein. “The CRO position is fast becoming a best practice among large companies.
“Given our size, complexity and the highly regulated industry in which we operate, separating the financial and audit functions and increasing our focus on risk identification and mitigation is a prudent move,” Rein added. “We’re glad to have a person of Bill’s caliber and integrity in such a role.”