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Walmart bests forecasts amid soft sales

BY Mike Troy

BENTONVILLE, Ark. — Walmart saw a diminutive 1% increase in same-store sales at U.S. stores, but beat analyst estimates and delivered better-than-expected fourth-quarter profits, the company announced Thursday.

Walmart said total sales increased 3.9% to $127.1 billion compared to $122.3 billion last year. Without the benefit of a favorable currency exchange situation, sales would have increased a lesser 3.7% to $126.8 billion. Full year sales increased by 5% to $466.1 billion compared to last year’s total of $443.8.

Fourth-quarter profits increased 7.9% to $5.6 billion and earnings per share of $1.67 were 10.6% higher than the $1.51 reported the prior year and well ahead of the company’s guidance and analysts’ consensus estimate. Walmart had forecast profits in a range of $1.53 to $1.58 and analysts were looking for $1.57.

"Walmart topped off a really good year with a solid fourth quarter, and I’m proud of what we accomplished as a team," said Mike Duke, president and CEO of Wal-Mart Stores, Inc. Every day our associates around the world deliver on our mission to help customers save money so they can live better. Together, we added $22 billion in sales to top $466 billion. Walmart U.S. was a key driver of our 5% sales increase."

The 1% U.S. comp increase was at the low end of a forecast range which called for a 1% to 3% increase and a slow start to the first quarter has the company forecasting flat same store sales.

To offset the deceleration in U.S. comps, which can be attributed to a range of external economic pressures, Walmart highlighted its volume growth and market share gains. The company said its U.S. division added more than $10 billion in net sales last year, including $4.7 billion as a result of same store sales growth. The company said it gained share in categories such as food, consumables, health and wellness, entertainment and toys.

"Despite comps at the low end of the guidance, our market share gains, as noted by Nielsen and NPD, along with our two-year positive comp trend indicates the underlying strength of Walmart’s business," said Walmart U.S. president and CEO Bill Simon. "Comp sales grew by 1% for the quarter, lapping a solid 1.5% comp last year. This represented $743 million in comp growth for the quarter."

Looking ahead, Walmart faces a challenging comparison against a first-quarter 2012 U.S. comp increase of 2.6% and a variety of headwinds such as increased gas prices and reductions in take home pay. Against this backdrop, Simon expressed confidence that the company’s familiar low price strategy will continue to resonate with shoppers.

However, a slow start to February caused largely by a delay in tax refunds has dimmed enthusiasm for the first-quarter and resulted in a flat same store sales forecast.

"We continue to monitor economic conditions that can impact our sales, such as rising fuel prices, changes in inflation and the payroll tax increase," Simon said.

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Reports: Analyst names Ahold as ‘most logical’ buyer of Harris Teeter

BY Alaric DeArment

NEW YORK — Supermarket operator Ahold USA could be in a position to buy Matthews, N.C.-based supermarket chain Harris Teeter, according to published reports.

Citing remarks by BMO Capital Markets analyst Karen Short, the Wall Street Journal reported that Ahold, Publix Super Markets and Kroger Co. would be candidates for a purchase of Harris Teeter, with Ahold named as the most logical candidate due to an acquisitive nature and a desire to enter the southern United States.

Last Thursday, Harris Teeter confirmed reports in the Journal that it had been approached by two private equity firms and was exploring strategic options.

 

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Giant Food announces Child Hunger Grants, 2012 contributions

BY Jason Owen

LANDOVER, Md. — Giant Food, joined by Feeding America food bank leaders, held a press conference today to highlight the company’s 2012 giving and announce Child Hunger Grants. Giant’s monetary and in-kind contributions exceeded $12 million, which was an increase from $8.3 million in 2011.

“Giant Food is a proud community partner. Giving back is a cornerstone of our company, which was instilled by our founders 77 years ago,” said Anthony Hucker, president of Giant Food. “We’re very proud of our legacy, especially as the nation’s capital grocer, and are committed to being a better neighbor each and every day.”

Giant’s support of Feeding America food bank partners and hunger relief organizations, including the Capital Area Food Bank, Maryland Food Bank, Blue Ridge Area Food Bank, Fredericksburg Area Food Bank and Food Bank of Delaware, remains the neighborhood grocer’s top priority. Through food drives, special deliveries and monetary and product donations, Giant’s contributions helped partners provide 55.2 million meals to neighbors in need.

Also at today’s press conference, Giant Food president Anthony Hucker announced Giant’s first-ever Child Hunger Grants to benefit five Feeding America food bank partners. This year’s grants are in excess of $850,000 and grant commitments over the next three years are equivalent to more than $2.8 million, enabling the Capital Area Food Bank, Maryland Food Bank, Blue Ridge Area Food Bank, Fredericksburg Area Food Bank and Food Bank of Delaware to implement programs and initiatives to combat child hunger.

“According to Feeding America, more than 200,000 children throughout the Washington metropolitan region are at risk of hunger. Nearly 1-in-5 children lives in households that struggle to put food on the table. Giant Food is doing our part to support our food bank partners — the ones on the frontlines fighting childhood hunger — through these significant Child Hunger Grants,” said Hucker.

In addition to hunger relief, Giant teamed up with health and wellness groups, military support organizations and various nonprofit organizations, as well as supporting education programs, to help individuals and families in the communities it serves across the Mid-Atlantic region. 2012 highlights include:

  • In its eighth year, the Triple Winner program raised $1.5 million for Johns Hopkins Kimmel Cancer Center and The Children’s Cancer Foundation to fight pediatric cancer.
  • Last year, Giant sponsored more than 200 youth baseball and softball teams, encouraging kids to be active. In addition, the neighborhood grocer hosted “Get Out & Play” clinics with major and minor league baseball teams across the region.
  • During Breast Cancer Awareness Month, Giant raised $37,305 for the Capital Breast Care Center.
  • In March, Giant hosted an in-store giving campaign to support the USO of Metropolitan Washington and USO Delaware and sold CareOne Care Packages featuring essential care items to support our troops and military families.
  • Giant again hosted Toys for Tots collection bins at all neighborhood stores during the holiday season and donated $25,000 to purchase toys for children in need.
  • Throughout the year, Giant donated more than $1 million to support local community initiatives and organizations, from churches and synagogues to Boy Scout and Girl Scout troops, firehouses, hospitals and more.
  • More than $2 million awarded to local schools through A+ School Rewards, which augmented school budgets and purchased new technology, playground equipment, musical instruments, athletic uniforms and more.

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