Walmart sales up 5.7% in Canada

Cheesewright says he's pleased with online grocery business to date
11/17/2015

Canada proved to be a “reliable” performer for Walmart Stores in the company’s third quarter.

Net sales in Canada for the three months to Oct. 31 rose  5.7% while same-store sales rose 4.3%, the Bentonville, Ark.-based retailer announced Tuesday

The growth was led by a “strong performance” in core grocery and “stronger performance” in general merchandise,” David Cheesewright, head of Walmart international, said in an earnings call.

“Overall I’m please with our results in Canada, and I expect reliable growth to continue,” he said.

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Cheesewright did not divulge how much Walmart Canada’s grocery business grew overall during the quarter. But he said that the division's market share in food, health and wellness, consumables and infants grew during the three months to Oct. 29, according to Nielsen.

Same-store traffic at Walmart’s Canadian stores rose 1.9% during the quarter while tickets were up 2.4%.

Operating income at the Canadian division grew faster than sales, Cheesewright said, but once again he did not supply numbers.

In addition to converting more of its discount stores to full-grocery Supercentres this year, Walmart is investing more into e-commerce in Canada this year.

In February it announced that it would spend $35 million on e-commerce, including expanding online product assortment, its website and delivery programs. It also announced plans to open dedicated e-commerce distribution centres.

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In July a click and collect grocery pickup service was launched at 11 locations in Ottawa. In October it installed pickup lockers at some 7-Eleven stores in the Toronto area so customers could order on line at Walmart.ca and then pick up their items at a the nearest convenience store.

On Tuesday, Cheesewright said he was “pleased” with Walmart’s online grocery business in Ottawa since the launch, adding that the Canadian and Mexican divisions of Walmart are learning about online grocery from the company’s U.K. subsidiary, Asda, which has been selling groceries online for a number of years.

Canada, along with Mexico, was a bright spot in the third quarter for Walmart’s international division, which also includes the retailer’s activities in China, the U.K. and Brazil. Canada and Mexico were the only two of those countries that experienced positive same-store growth during the quarter.

Overall, Walmart's international segment reported a net sales drop of 11% to US$29.81 billion. Net sales were $34.7 billion on a constant currency basis.

READ: In low-growth economy, Walmart Canada’s sales still move up

For U.S. stores, quarterly net sales gained nearly 4% to $72.71 billion, while same-store sales rose 1.5%

Walmart’s total net income fell 11 per cent to $3.3 billion in the quarter ended Oct. 31, but its earnings per share of $1.03 per share topped Wall Street expectations.

The average estimate of 13 analysts surveyed by Zacks Investment Research was for earnings of 97 cents per share.

Walmart has been pressured on a number of fronts so far this year. A strong U.S. dollar has affected results. The company is also facing increasing competition from Amazon.com and dollar stores, and its profits has been squeezed by pay raises for workers and efforts to improve its stores.

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