Wal-Mart blows past June sales expectations

Wal-Mart Stores Inc. (NYSE: WMT) said today that its June 2007 same-store sales results rose about 2.4% from the year-ago period, which blew past the analyst consensus estimate of 0.8%. Wal-Mart's numbers did not even include its fuel sales at its Supercenter locations, so the retailer had a stellar June, all things considered. What caused the upside surprise?

Gas prices again took a turn for the worse as they climbed up the $3.00/gallon scale during late June amid a tough retail environment in every way. Yet, for a $344 billion retailer, Wal-Mart managed to increase sales to a large degree. For the five weeks ending July 6, its sales were up to $35.81 billion from $32.74 billion a year ago, and even Wal-Mart store sales alone posted a 7.1% rise to $22.94 billion. Wal-Mart explained the large lifts by strong grocery sales, which outpaced almost all categories except electronics. Home and apparel sales, though, remained stagnant as they have been all year.

Wal-Mart specifically noted that flat-panel televisions, video game hardware, MP3 players and computers had "significant" year-over-year sales gains. Is the reinvention of the electronics departments inside all those Wal-Mart stores working? This has been a merchandising area targeted by Wal-Mart in the last few quarters as a way to pump up sales of higher-margin goods, and from the looks of June results, it may be working. Wal-Mart remained bullish on its 2007 fiscal guidance and said it would not lower previous expectations.