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Sales slide continues at Walmart as profit goal is met

BY DSN STAFF

BENTONVILLE, Ark. Weak sales trends continued at Walmart’s U.S. stores division during the third quarter as same-store sales declined 1.3%; however, the company managed to meet analysts’ third-quarter earnings per share target of 90 cents.

 

Inclusion of a five cents a share tax benefit resulted in third-quarter earnings per share of 95 cents and caused the company to raise the full-year profit forecast to a range of $4.08 to $4.12 from $3.95 to $4.05.

 

 

Walmart president and CEO Mike Duke said the company performed well in the third quarter and delivered solid earnings growth for shareholders.

 

 

“Our company now has delivered four consecutive quarter of operating expense leverage, and we continue to grow operating income faster than sales,” Duke said.

 

 

Operating income during the quarter grew 3.1% to $5.6 billion while sales increased 2.6% to slightly more than $101 billion.

 

 

Sales at the U.S. stores division were essentially flat at $62.2 billion, while operating profits increased 1.9% to $4.4 billion. The 1.3% comp decline at the U.S. division marked the sixth consecutive quarter of declining comps, and Walmart left open the possibility of a fourth-quarter decline by offering a guidance range of negative 1% to plus 2%.

 

 

Internationally, sales on a constant currency basis increased 7.9% to $26.6 billion, and operating profits increased 12.4% to $1.2 billion. Including favorable currency benefits, sales increased 9.3% to $26.9 billion, and profit increased 13.5% to $1.223 billion.

 

Sales at Sam’s Club increased 2.7% to $12.1 billion, while operating profits declined 7.1% to $367 million, and same-store sales, excluding the favorable impact of rising fuel prices, increased 2.4%.

 

“Our international business continues to deliver impressive results, with sales up more than 9%,” Duke said. “We are also pleased with the ongoing sales momentum at Sam’s Club and expect that momentum to continue in the fourth quarter. Our Walmart U.S. business is on the right track with third-quarter comps sales with guidance and operating income growing faster than sales.”

 

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Starting the day off right with both nutrition and convenience

BY Michael Johnsen

Families count on cereal for convenient, affordable nutrition.

Quickly prepared or eaten on the go, cereal is a convenient breakfast option for today’s busy families that also provides important nutrients.

Studies have proven that eating breakfast is closely linked to healthy body weights, improved mental alertness and physical performance. Plus, people who skip breakfast don’t make up for the missed nutrients later in the day.

As families look to save money by eating more in-home meals, breakfast — particularly the ready-to-eat cereal category — has become a more popular and important option.

Ready-to-eat cereal, like Kellogg’s Apple Jacks, Corn Flakes and Rice Krispies, generates nearly 54% of sales of all breakfast foods and prompts more than 12 shopping trips per year, according to mid-year 2010 data from the Nielsen Homescan consumer facts panel. That’s more than twice as many as any other breakfast foods category.

In addition, more than 92% of households made at least one ready-to-eat cereal purchase during the 12 months ended June 2010, with the typical home spending $66.69.

Consumers also understand the value of eating healthy food, especially for breakfast.
For example:

  • Sales of items that include flax or hemp seed were up 49.6% for the 52 weeks ending Sept. 4, according to Nielsen;
  • Sales of foods making antioxidant claims were up 26.6%;
  • Sales of foods making fiber claims were up 5.3%; and
  • Sales of granola/natural cereals, like Kashi, were up more than 9%, with sales rapidly approaching $250 million for what was once a niche category largely for shoppers of the natural foods channel.

Cereal is also a great-tasting option that meets consumers’ taste and nutrition needs. Children and adults enjoy the variety, flavors and textures, as well as the convenience of ready-to-eat cereal. Plus, cereal with milk is also the leading source of 10 nutrients in the diets of U.S. children, including vitamins A, B6, B12 and D, riboflavin, thiamin, niacin, folate, iron and zinc.

Fiber, a much-needed nutrient that 90 percent of American adults and children aren’t getting enough of in their diets, also contributes to overall health. Recognizing the important role of fiber in digestive health, weight management, heart disease and diabetes, the majority of Kellogg cereals are at least a good source of fiber (3 grams), and more than half also include a half serving (8 grams) of whole grain. And, at just 50 cents a serving for cereal and milk, ready-to-eat cereal provides convenient, affordable nutrition to help millions of families around the globe start their days off right.

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Big bowl of wellness

BY Dave Schulz

Now that more drug stores have moved into the grocery business, consumers are gaining more convenient access to food.

As a result, drug stores, which have always been synonymous with health and wellness, also have a tremendous opportunity to meet the nutrition needs of time-starved shoppers by stocking their shelves with healthier foods.

Food manufacturers, like Kellogg, see an opportunity for retail pharmacies to help reinvent the way groceries are merchandised to shoppers and help consumers make better decisions when buying food.

“Cereal is one of the best choices available,” said Doug VanDeVelde, Kellogg SVP of marketing and innovation for ready-to-eat cereal. “In fact, ready-to-eat cereal and milk is the leading source of 10 nutrients in children’s diets. Kellogg, which offers more than 80 cereal choices, continues to respond to consumer requests for better-for-you, convenient products that fit their nutritional needs.”

Since 1906, Kellogg has been providing consumers with high-quality, nutritious and great-tasting food, and Kellogg’s ready-to-eat cereal help millions of families around the globe start their day off right.

Studies have proven that eating breakfast is closely linked to healthy body weights, improved mental alertness and physical performance. Plus, people who skip breakfast don’t make up for the missed nutrients later in the day.

Additional facts support the importance of breakfast:

  • If essential nutrients are missed at breakfast, people don’t compensate for the loss at other meals;
  • Cereal is a typically low-fat, cholesterol-free food that encourages breakfast consumption; and
  • Breakfast cereal eaters have higher intakes of riboflavin, calcium, B vitamins, vitamin A and vitamin D.

In the United States, ready-to-eat cereal is the preferred breakfast with 82 percent of women and 79 percent of men starting their day with a cereal breakfast. Ready-to-eat cereal is also growing approximately three percent per year and is the third largest center-of-the-store category.

Drug stores are helping educate and assist consumers by communicating the relationship between breakfast and overall nutrition.

CVS, for example, is promoting its grocery initiatives to its ExtraCare loyalty cardholders with coupons, including one for Kellogg’s Fiber Plus cereals. Other Kellogg products that are logical choices for both in-store and coupon or sales circulars include Special K for weight management and All-Bran for digestive health.

In addition to nutrition, price is also a consideration among consumers, a trend that drugs stores are noticing.

“Consumers have become more conscious of their spending; this recessionary mindset has become part of their routine,” VanDeVelde added. “Today, there is an increased focus on brands that provide overall value, including elements of price, nutrition, education, health prevention and family appeal. Cereal and milk fit the bill perfectly. For these reasons, cereal will continue to be a focus category for retailers to drive store traffic.”

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