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CHICAGO - Wal-Mart Stores Inc. on Tuesday posted a better-than-expected 15.5 percent jump in quarterly profit due largely to higher sales abroad. The increase helped offset sluggish sales at its U.S. Sam's Club warehouse stores.
Wal-Mart's U.S. sales at stores open at least a year slowed considerably over the past year, and Wal-Mart forecast more of the same at least through the first quarter.
Same-store sales were up just 2.7 percent for the fourth quarter, well below the 8.1 percent gain recorded in the first quarter. The retailer forecast same-store sales would be up in the range of 2 percent to 4 percent for the current first quarter.
Wal-Mart, struggling with fierce competition in the warehouse club sector led by Costco Wholesale Corp., said it was "very disappointed" with results from Sam's Club, but profits in that unit should improve in the first quarter.
The retailer put in a new management team last year and hopes merchandise improvements will help it compete, but earnings improvement will trail sales growth until later in the year, Wal-Mart said.
For the fourth quarter, Sam's posted a 0.7 percent dip in operating profit, while the international segment recorded a 37.6 percent jump.
Wal-Mart credited strong sales in Britain, Canada and Mexico, adding that currency benefits added only $1 million to international quarterly operating profit of $757 million.
Analysts pointed to cost cuts from a global purchasing operation put in place last year that allows Wal-Mart to use its massive size to buy products cheaper for its more than 4,700 stores around the world.
Overall, Bentonville, Arkansas-based Wal-Mart said it earned $2.53 billion, or 57 cents per share, in the fourth quarter ended Jan. 31, compared with $2.19 billion, or 49 cents per share, in the year-ago period.
Sales rose 10.7 percent to $71.07 billion.
Lee Scott, president and CEO, said "challenging and troubling" aspects of the past year would continue in the current fiscal year. He named geopolitical concerns among those "troubling" issues.