WalMart Stores Inc.'s sales surged in February, beating the company's forecast and retail analysts' expectations at a time when most retailers reported double-digit sales declines.
The company also raised its stock dividend Thursday for the 35th consecutive year.
Dillard's Inc. of Little Rock was among the retailers that suffered another sharp drop in sales. With unemployment rising and household incomes shrinking, department and apparel stores have tried for months to draw customers with sharply discounted merchandise with limited success.
WalMart said Thursday that last month's sales in stores open at least a year rose 5.1 percent over a year ago, well above the 1 percent to 3 percent the company had forecast. The results exclude the impact of fluctuating gasoline prices.
Analysts surveyed by Thomson Reuters had expected a 2.4 percent increase in WalMart's same-store sales.
Results from stores open at least a year exclude the impact of stores opened or closed during the period, providing a measure of performance in continuing operations.
"WalMart has got amazing traffic, and they're driving more traffic," said Patricia Edwards, a retail analyst and founder of Storehouse Partners LLC in Seattle.
WalMart, based in Bentonville, increased its dividend by 15 percent, from 95 cents to $1.09 a share.
The sales and dividend news pushed the company's stock up $1.26, or 2.6 percent, to a close of $49.75 a share on the New York Stock Exchange as the overall market plummeted to a 12-year low.
WalMart's stock has traded between $46.25 and $63.85 in the past year.
Because of its enormous scale more than 4,200 U.S. stores and 3,300-plus in its international division WalMart skews the results of U.S.-based retail operations overall.
Including WalMart's latest results, same-store sales at 35 retail chains tracked by the International Council of Shopping Centers fell only 0.1 percent in February. Excluding Wal-Mart, sales were down 4.3 percent, the trade group said.
"The tone was a little better, but the poster child of the improvement was WalMart," said Michael Niemira, the center's chief economist.
While the numbers may show that business is stabilizing, he said, it could also just be a "WalMart story" that more people are downscaling amid the tough times.
John Lawrence, an analyst with Morgan Keegan & Co. in Memphis, sees Wal-Mart continuing to improve sales.
"With five consecutive months of traffic increase, WalMart is clearly taking market share from its rivals," he wrote in a research note to clients.
"We expect the trend to continue with the trading-down effect and improving store operation." Among other retailers reporting same-store sales: Gap Inc.'s sales fell 12 percent, its Old Navy store sales fell 13 percent and Banana Republic was off 16 percent; Kohl's Corp. sales fell 1.6 percent; J.C. Penney Co. Inc.'s sales fell 8.8 percent; Nordstrom Inc.'s sales fell 15.4 percent; and Macy's Inc.'s sales fell 8.5 percent.
Dillard's reported samestore sales fell 14 percent from February's results last year, citing sluggish sales in juniors' and children's apparel.
Cosmetics sales were significantly better than the average company trend, Dillard's said.
The company said sales were slightly above the company trend in the central region, slightly below trend in the East and below trend in the West.
Low gasoline prices likely helped increase February sales at WalMart, the company said.
"We believe falling gas prices significantly boosted household disposable income in February and therefore allowed for both more trips and more spending towards discretionary categories," Eduardo Castro-Wright, vice chairman in charge of the company's U.S. stores division, said in a news release on the company's latest results.
If so, the lower fuel prices did not help all of WalMart's competitors.
Target Corp. of Minneapolis, the No. 2 discounter nationally, reported same-store sales fell 4.1 percent, which Gregg Steinhafel, chairman, president and chief executive officer, said was "in line with our planned range for the month." Other discounters did better, however. Family Dollar Stores Inc. of Matthews, N.C., with 6,643 stores at the end of February, said same-store sales were up 6.4 percent.
And regional retailer Duckwall-ALCO Stores Inc. of Abilene, Kan., with 258 stores in 23 states, reported samestore sales up 9.4 percent.
But mostly, retailers are hurting.
"It is brutal out there," Edwards said.
"People are trading down, they are shopping where they can get their food in addition to other things, and they are trying to save money any way possible," she said.
WalMart said grocery, health and wellness categories helped push sales higher, but also said shoppers spent more on items for their homes.
Edwards noted that other retailers also pointed to improvement in the home category, suggesting that people are not going out as much and are willing to spend some money to spruce up their homes.
Sam's Club, WalMart's members-only, wholesale club division, outperformed the U.S. stores operation with a 5.9 percent gain, excluding the impact of gasoline.
The U.S. stores division, which includes supercenters, discount stores and Neighborhood Market grocery stores, boosted same-store sales 5 percent.
At Sam's, food and other consumables also were mainly responsible for sales gains as shoppers avoided furniture, jewelry and other big-ticket items, the company said.
Club operator Costco Wholesale Corp. reported Wednesday that its same-store sales, excluding fuel, rose 4 percent at its U.S. stores in February.
BJ's Wholesale Club said sales were up 0.6 percent, excluding fuel.
WalMart's international sales continued to grow, though they don't look that way when converted to U.S. dollars.
Factoring out the increase in the dollar's value compared with other currencies from a year ago, sales were up 9.9 percent.
At current exchange rates, the company said, sales were down 10.8 percent in dollars.
WalMart de Mexico, a publicly traded company, boosted same-store sales by 4.7 percent.
WalMart does not report details of same-store sales for the other nations where it has stores, though it said those sales were slightly negative in Canada, positive in Japan and rose in the low single digits in Brazil.
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