Wal-Mart CEO Mike Duke has said that the company remains focused on improving its productivity as the retail giant’s top line comes under pressure from lower consumer spending.
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Earlier today (12 November), the world’s largest retailer booked an increase in earnings per share, which rose to US$0.84 from $0.77, despite a 0.4% drop in same-store sales.
Wal-Mart has benefited from the recession, attracting new consumers who are increasingly focused on price. However, the company’s gains have moderated in recent quarters as consumers continue to reduce their spending.
Duke dismissed concerns that pressure on the company’s top line will increase as consumers return to their old spending patterns when the economic picture brightens.
“During the recession of last two years we have gained customers, strengthened our balance sheet and delivered year-on-year sales and EPS growth on a constant currency basis,” he said during an investor conference call.
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By GlobalData“When the recession is behind us we believe people will continue to shop with a new instinct for value and they will find it at Wal-Mart, Sam’s Club and the many other retail banners that we operate worldwide. We are pleased with where we have come over the last two years.”
With a lacklustre top-line performance, Wal-Mart has focused on productivity to drive profits.
“The productivity loop is back at Wal-Mart and I pleased with the progress we are making and I believe we are at the beginning of the curb,” Duke insisted.
According to Duke, Wal-Mart has remained focused on lowering its costs and leveraging selling, general and administrative expenses.
“We can and we will improve SG&A leverage,” he insisted. “We are redoubling our efforts on leveraging expenses and to widen the gap with our competitors on price leadership and customer experience.”
