Wal-Mart Short Term Sales Are Impressive But Reports Further Declining Profits
The retail giant is trying its best to get back in the game and is striving to improve its sales and store experience but is it enough.
In the last quarter, the retails giant Wal-Mart Stores Inc. reported higher sales in comparison to the low stock price that it was witnessing. Due to the changes made by the company in a number of the stores all over the United States, the retailer managed to attract quite a few shoppers who were initially shopping elsewhere but now for the past few months started to shop at Walmart.
In the third quarter of fiscal year 2015, the retailers’ sales rose by as much as 1.5% in its stores all over the country making the quarter the fifth consecutive quarter with a gain. The retailer has had a long stretch of decline in sales but at this point even the number of visitors to the stores has increased by 1.7%. Increase has been recorded for four consecutive quarters even though the customers to pay less per trip to the stores.
Despite the fact that the sales have been increasing for three quarters along with the number of visitors increasing the company’s profits have fallen by 11% and the company has continued to state that this fall in sales will continue for a while as the retailer has been spending a lot on improving customer experience and also because of the of the high wages to the workers. Due to these reasons the company purposely lowered its profit target in August and continued to do so for the month of October as well. Along with the declining sales, Walmart stock has also fallen by as much as 31% in Fiscal year 2015, but rose by a small number on the trading session on Tuesday. The increase in stock during the trading session was of 3.5% and the shares closed down at $59.92.
The demand for clothes, household products as well as gifts have declined all over the United Stated as last week, sales of various department stores came into light according to which, for the quarter the sales that have been reported are awfully low for major departmental stores such as Nordstrom Inc. and Macy’s Inc. Kantar Retail’s analyst Bryan Gildenberg talking about consumer need and want in the United States stated that currently the consumers are strongly investing on stuff that they need and ‘selectively strong’ on stuff that they want.
According to Walmart stores as well as retail companies it was determined that the U.S. customer is just not spending much on shopping anymore. Despite the fact that the retail giants short term sales are performing comparatively well, the retailer is still facing trouble when it comes to making investment in order to grow its business. As the company continues to increase its workers’ wages, it informed its investors that the company is expected to report a fall of as much as 12% in the profit for next year.