International shines brightest in challenging quarter
If there was a bright spot to Walmart’s fourth-quarter results it was the international division where sales increased in every country, expansion surged and operating profits increased 9.7% to $5.4 billion on sales that increased 7.6% to $104.8 billion. Those results are on a constant currency basis that assumes foreign exchanges rates are consistent year over year and present a more accurate view of country-by-country performance.
If it wasn’t clear already from the way Walmart is allocating capital to acquisitions and organic expansion, and international operations increasingly will be the growth driver for the company going forward. For example, Walmart opened 458 new stores last year, representing an 11.2% increase in total square footage, and its strongest sales increases came in some of the world’s fastest growing markets such as China, Brazil and Mexico.
In Mexico alone, Walmart added 255 new stores while 45 new units were added in Brazil and in China Walmart added 49 new stores to bring its total there to 328 units. While Walmart international is finalizing significant acquisition in South Africa and the United Kingdom this year, it also plan to add another 23 to 24 million square feet of new selling space in existing markets.
“Our focus on price leadership, customer service, and productivity have produced good results for fiscal 2011, and we are well prepared to meet our fiscal goals in 2012 in more than 4,550 stores,” said Doug McMillon, Walmart International president and CEO.