In a gloomy retail environment, Wal-Mart’s growth a bright spot

Big-box behemoth Wal-Mart released a surprisingly upbeat earnings report on Thursday, showing it has been able to keep its turnaround efforts on track despite a shopping environment that has proved punishing to many other major retailers.

Wal-Mart reported a 1 percent uptick in its sales at its U.S. stores open more than a year, its seventh consecutive quarter of increases on this closely followed metric. The rise was fueled by 1.5 percent growth in store traffic, an encouraging sign at a moment when foot traffic to shopping centers generally has been sluggish. WalMart’s revenue was up 0.9 percent to $115.9 billion.

Executives said they believe the stronger sales reflect a host of efforts they’ve been making to improve the stores.

Stocked shelves

Wal-Mart has been working to keep shelves stocked so that customers don’t end up disappointed when they can’t find the item they came for. And the chain has been trying to spruce up its presentation in departments such as grocery, where it is giving more prominent display to items such as leafy green vegetables.

The retailing giant has also undertaken measures to deliver better customer service, including hiking the minimum wages for its workforce and increasing pay for department managers. Greg Foran, the U.S. chief executive of WalMart, said the company is recording higher customer satisfaction scores from shoppers as it executes these changes.

Employee spending

Interestingly, Foran also said that he has seen an increase in purchasing at Wal-Mart stores by WalMart workers, perhaps a sign that some of those workers are spending the extra money in their wallets that has come from the wage hike.

Wal-Mart recorded a profit of $3.1 billion, or 98 cents a share, a decline of 7.8 percent from the same quarter a year ago but above the guidance it had offered for the quarter. Investors sent the stock up more than 9 percent to settle at $69.20.

One area of concern for Wal-Mart in the quarter was the slowdown in growth in its e-commerce division. Online sales growth was only 7 percent, a performance that CEO Doug McMillon acknowledged was “too slow.”

Wal-Mart has been pouring money into shoring up its digital operation, so it might give investors pause that sales in that channel aren’t growing at a faster clip.