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Wal-Mart Stores, Inc. reported a flat first-quarter profit due to its international operations being hurt by the stronger dollar. Its revenue fell 0.6 percent to $93.47 billion, from $94.04 billion a year earlier; it earned $3.02 billion, or 77 cents per share, for the period ended April 30, which was flat from a year earlier.
The mega-retailer reported that earnings were affected by 4 cents per share because of currency exchange rates. Without that impact, the company said sales would have risen 4.5 percent to $98.31 billion. Wal-Mart's exposure to currency fluctuations is heightened because nearly a fourth of its sales for the quarter -- 22.7 percent -- came from its international division.
"When economic conditions improve, we believe customers who shop Wal-Mart today will stay with us, because of the business improvements we're making and continue to make," said Mike Duke, Wal-Mart president and CEO. "Across the company, we are building our brand by reducing costs, sharpening our merchandising and updating our stores."
Last week, Wal-Mart reported that same-store sales rose 5 percent in April, surpassing the 2.9 percent gain expected by Wall Street. The figure excludes fuel sales.
The company said it expects to earn between 83 cents and 88 cents per share in its second quarter. The guidance “takes into account Wal-Mart's strong underlying performance and the difficult economic environment,” noted Tom Schoewe, the company’s EVP and CFO. “Plus, our U.S. businesses will be up against the economic stimulus checks in the second quarter last year.”
Schoewe added that Wal-Mart was “in a great financial position.”
Progressive Grocer sister publication Commercial Property News reported that Wal-Mart is actively planning to open stores in the Russian Federation and may even be in talks with a Russian supermarket chain, citing published sources. Wal-Mart has not confirmed the reports, but company officials have spoken of the current fragmented nature of Russian retailing as spur for growing its type of retailing in that country.