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Wal-Mart’s Comparable Apparel Sales Up; Quality Offerings Strategy Pays Off

Retailing colossus Wal-Mart reported positive comparable apparel sales for the first time in seven years, reflecting a long-awaited and vigorously pursued turnaround in this category.

Revenue climbed 3.9 percent to US$5.6 billion for 4Q and profits spiked a healthy 8.6 percent, according to Wal-Mart filings.

Annual profits increased 8.3 percent to U.S.$16.9 billion, on a 5 percent spike in U.S. sales to $466.1 billion and a global sales increase of 7.4 percent to U.S.$135.2 billion.

U.S. sales growth was up 3.9 percent to U.S. $274.5 billion.

Driving the positive although modest positive comparables in apparel in the U.S. market is the “…improved quality of our offering,” said Bill Simon, president and CEO of Wal-Mart U.S.

“Over a year ago, we put in place our new apparel strategy that focused more on basics and essentials,” Simon said. “This quarter…[ending on January 31, 2013.] marks the first full year of positive comp sales in apparel in seven years.”

Wal-Mart president and CEO Mark Duke cited the retailer’s tag line describing its pricing strategy, Every Day Low Costs, and wide selections as the factors boosting sales.

“Strong merchandising, efficient operations, and thoughtful use of capital will keep Wal-Mart US strong into the future,” he said.

Sales of children and women’s apparel helped Wal-Mart’s low-pricing warehouse division Sam’s Club to post mid single-digit comparable sales for all apparel.

The increase in Wal-Mart’s apparel sales indicates the success of the firm’s strategy to induce a substantial segment of its grocery customers to buy apparel and footwear as well as food when shopping at the retailer.

A major element of that successful strategy was the renewed focus on socks, T-shirts and underwear, while no longer concentrating on fashion garments.  Wal-Mart’s traditional bargain-hunting, value seeking customers responded positively.

Wal-Mart announced an annual fiscal year dividend of $1.88 per share, an 18 percent increase, or $0.29 per share, over last year’s $1.59 per share dividend.