Wal-Mart CFO: The Ice Is Melting on Our Frozen Sales
Will March really go in like a lion and out like a lamb? Wal-Mart Stores (NYSE:WMT) sure hopes so, and it’s no big mystery why. Though the discount retailer has suffered struggling sales for a while now, its business especially takes a hit during the cold and snowy winter months, and Wal-Mart could use some warm weather. Though the weather certainly hasn’t cleared for good, the company’s Chief Financial Officer Charles Holley said at an investor conference in New York Tuesday that Wal-Mart’s U.S. sales have improved since mid-February — the time when the retailer especially felt the blow to its its business — and according to Reuters, Holley maintained that the world’s largest retailer has had “very good sales” in recent weeks.
Wal-Mart certainly isn’t the only retailer that has felt the effects of the nation’s cold and snowy weather this winter season, but the case for the world’s largest retailer is still significant because it has been suffering struggling sales for a while now, and a slow winter season really wasn’t something the company could afford. Wal-Mart reported its latest set of disappointing earnings in mid-February, and received advice from analysts that executives should invest more in Wal-Mart’s better-performing small format business, because smaller-format stores are performing significantly better than their big-box counterparts. One Credit Suisse analyst, Michael Exstein, an industry veteran, advised the company’s new CEO Doug McMillion to consider buying Family Dollar (NYSE:FDO) so Wal-Mart can further expand its small-format sector, but McMillion has still stayed mum as to whether he will heed that advice.
In order to boost sales inside its brick-and-mortar stores, Wal-Mart has taken on a number of initiatives to make its products, especially its tech gadgets, which more appealing to customers. CNN reported last week that Wal-Mart cut the price on the Samsung Galaxy S4, along with those on its Apple (NASDAQ:AAPL) 16-gigabyte 5S and 5C last Wednesday. The retailer is hoping that with the price drops, consumers will be more likely to buy their devices at Wal-Mart rather than at Amazon.com (NASDAQ:AMZN) or other phone carriers.
According to CNN, a Galaxy S4 with a two-year contract at Wal-Mart is now $49, down from $99, and the 16-gigabyte iPhone 5S is dropping from $145 to $119. The 5C is $29, down from $45. In addition, any customer who buys a Samsung phone with a two-year contract between March 9 and March 22 will receive a free $50 Wal-Mart gift card.
Can you smell the desperation? Maybe that’s extreme, but it’s still evident that Wal-Mart is trying now more than ever to get its devices off the shelves so it can keep its head above water in the U.S. Thanks to increasing competition from rivals like Amazon, Target (NYSE:TGT), and Best Buy (NASDAQ:BBY), Wal-Mart has almost no room to breathe and no room for mistakes — and when you’re dealing with a winter that has kept many families locked indoors, desperate times call for desperate measures.