Wal-Mart Stores Inc. on 20 February reported fourth-quarter profit growth of 9.8 % to beat analyst estimates, and issued a bullish forecast for the year ahead.
Chief Executive Lee Scott singled out Wal-Mart’s flagship US business for boosting the company as whole with a twin strategy of discounting hot items like electronics and holiday toys while continuing to tailor stores more closely to local demographics.“I believe in the strategic plan that is guiding our US stores,” Scott said in a recorded conference call for investors.
The world’s largest retailer said profit for the period ending 31 January was $3.94 billion (euro3 billion), or 95 cents per share, up from $3.621 billion, or 87 cents from one year prior. Even with a $98 million (euro74.63 million) tax benefit worth 2 cents per share, Wal-Mart’s earnings beat the 90 cents per share forecast by analysts surveyed by Thomson Financial.
The company had fourth-quarter sales of $98.09 billion (euro74.7 billion), up 10.9 percent from a year before but below the $99.95 billion (euro76.11 billion) forecast by analysts.Wal-Mart U.S., which comprises 3,443 stores, saw quarterly sales grow 7 percent. Sales at the smaller Sam’s Club division rose 4 % and Wal-Mart international jumped 30 %, helped by acquisitions in Brazil and Central America.
For the fiscal year, Wal-Mart sales rose 11.7% to $344.99 billion (euro262.71 billion), from $308.95 billion. The company had a profit from continuing operations of $12.18 billion (euro9.28 billion), up from $11.41 billion a year before. The company’s per-share earnings for the fiscal year were $2.92, compared to $2.72 a year before.
Wal-Mart has struggled to increase sales at stores open at least a year and is working to better tailor its merchandise mix to the clientele of specific stores. It also spent the year fighting media attacks by union-backed groups and court challenges, including a gender-based discrimination lawsuit in federal court in San Francisco.Scott said the company’s fourth-quarter results give Wal-Mart momentum.
“I am encouraged by (Wal-Mart workers’) achievements as we head into the current fiscal year. Our company’s performance for the fiscal year was helped by a strong fourth quarter,” Scott said.
Wal-Mart said it expects its same-store sales to increase by 1% to 3 % in its first quarter, and first-quarter per-share earnings of between 68 cents and 71 cents. For fiscal 2008, Wal-Mart expects per-share earnings of between $3.15 and $3.23.Analysts surveyed by Thomson Financial were forecasting 68 cents for the first quarter and $3.19 for the year ahead.