Home shows strength at Wal-Mart

It’s been a long time since Wal-Mart singled out the home or DIY categories as strong sales performers, but that was the case during March as the company reported a 0.6% same-store sales increase. While that figure isn’t impressive on a standalone basis and was short of analysts’ expectations, the home and DIY categories achieved a mid-single digit increase during March, according to the company. Other categories singled out for strength included health and wellness and grocery.

Overall, the relatively weak results in March were explained by a major swing in the timing of Easter, which falls on April 11 this year compared to March 23 last year. The shift made March results appear weak, but April results will appear strong.

“Based on the initial strength of our sales this week, we expect Easter to drive April sales performance,” said Wal-Mart vice chairman Eduardo Castro-Wright. “Clarity of offering, quality brands, unbeatable prices and strong operational execution are driving growth in multiple categories.”

Anticipated strength in April caused Wal-Mart to update its sales and earnings guidance by noting that it expects U.S. same-store sales to be around the high end of a previously forecast range of 1% to 3% and that earnings per share would be toward the high end of the range of $0.72 to $0.77 provided in February. Despite the affirmation of sales and earnings guidance, the market was focused on the 0.6% same-store sales increase announced Thursday morning. Shares opened sharply lower at $50.04 from the previous day’s close of $52.61.

Even so, Castro-Wright maintained Wal-Mart remains well positioned for today’s economy.

“People are choosing to spend money in key discretionary categories across the stores, and this is translating to improvement is several areas of our business, including home,” he said.