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BENTONVILLE, Ark. and MINNEAPOLIS -- Leading U.S. retailers Wal-Mart Stores, Inc. and Target Corp. reported higher fourth-quarter profits yesterday, on double-digit sales growth.
Following the release, Target shares rose more than 2 percent, closing at $50.16 on the New York Stock Exchange, while shares of Wal-Mart gained only slightly, closing at $52.70.
Wal-Mart said quarterly earnings rose 16 percent to $3.16 billion, as sales increased from store expansion, beating Wall Street expectations. However, president and c.e.o. Lee Scott said on a recorded conference call that the retailer could have done better, as it did not have enough merchandise to meet demand, particularly for mid- and premium-priced products.
Wal-Mart, which opened 389 new stores during the fiscal year, achieved fourth-quarter sales of $82.22 billion -- a 10.4 increase over the same period last year. Sales at U.S. stores open for at least a year rose 1.4 percent.
Wal-Mart's traditional and supercenter stores recorded sales of $55.45 billion, a 9.5 percent increase. The Sam's Club division brought in sales of $9.98 billion, a 4.4 percent gain. The international division posted sales of $16.78 billion, a 17.4 percent increase.
Meanwhile, Target said profit edged up to $825 million, or 91 cents per share, in its fourth quarter, from $823 million, or 90 cents a share, a year earlier.
Fourth quarter revenues were $15.194 billion, up 11.1 percent from a year ago. Comparable store sales for the quarter rose 5.4 percent.
During a conference call with investors, Target Stores president Gregg Steinhafel said the company will build on its "eat well, pay less" strategy, with more food offerings around holidays and family events such as students' graduations. The retailer also plans to add a new assortment of healthy alternatives, such as low-carb potatoes and trans-fat-free baked goods, and will begin selling products in bulk through club packs of candy and pizza, among others.
In April, Target will introduce a new design for pharmaceuticals containers, featuring color-coded rings that allow family members to easily identify their own medicine, as well as a new liquid-dispensing system for children's medicine.