Wednesday, February 22, 2012

Walmart’s Q4 2012 Results – Comments

I found various notable items in Walmart’s Q4 2012 conference call transcript (pdf) dated February 21, 2012.  I view Walmart’s results and comments as particularly noteworthy given their retail prominence and focus on low prices.  I have previously commented on their quarterly results; these previous posts are found under the “paycheck to paycheck” label.

Here are various excerpts that I find most notable:

comments from Mike Duke, page 7:
Our core customers remain cautious about their finances, and they turn to Walmart and our EDLP promise to help them manage through today’s economic challenges.
comments from Jeff Davis, page 10:
Gross profit as a percentage of net sales was 24.3 percent, a 40 basis point reduction compared to last year. All three segments contributed to the margin decline, and later you’ll hear more details from each segment.
comments from Bill Simon, page 16:
Despite moderating inflation in certain categories, grocery prices continue to be an issue for many of our customers. For the fourth quarter, total grocery inflation was approximately 4.0 percent. However, trade down and other initiatives reduced the net inflation impact on our customers to between 100 and 200 basis points.
comments from Bill Simon, page 20:
A challenging economy and rising gas prices will continue to drive customers to seek value. In the past, significant increases in gas prices over short periods of time have led to trip consolidation and higher ticket.  We’ll continue to help customers adapt to such trends.

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1362.21 as this post is written

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