Walmart Q1 Canadian Performance

Doug McMillon, President & CEO, Walmart International

"Moving to Canada, Walmart Canada faced a challenging quarter, as consumer spending weakened due to higher household debt levels. Our results were impacted by the unseasonably colder weather this year versus unseasonably warm weather last year and the leap year overlap. Net sales grew 6.1%, but Canada had a decline in operating income and did not leverage expenses.

Comparable sales decreased 1.3%, with comp ticket up 0.7%, and comp traffic declining 2%. We had strong comp sales in food, consumables, and home lines, but continue to see softer sales in entertainment. The colder weather also impacted sales in hard lines and apparel. However, in the first quarter’s challenging environment, we drove market share gains of 120 basis points and the Nielsen Company measured categories of “food, consumables, and health and wellness.

Regarding profitability, gross profit rate increased due to improved initial margins from private label and direct import gains, as well as reduced shrink. However, operating expenses grew faster than sales, primarily due to negative comp store sales, the lapping of costs related to the year-over-year growth in new store base, and investments in ecommerce."

Walmart Earnings Call May 16th 2013 http://seekingalpha.com/article/1439851-walmart-ceo-discusses-q1-2013-results-earnings-call-transcript?part=single