Wal-Mart Breaks Sales, Earnings Records

Wal-Mart Stores Inc. broke its own records in the fiscal year that ended Jan. 31 with net sales of $191.3 billion and net income of $6.3 billion.

The sales figure reflects a 15.9 percent increase over $166.8 billion last year. The earnings amount increased by 17.1 percent over $5.4 billion for the previous year and reflects an increase of $1.40 per diluted share, compared with $1.20 earnings per share for the prior fiscal year.

In the fiscal fourth quarter, the world’s largest retailer surpassed $2 billion in earnings for the first time ever, beating Wall Street’s expectations by a penny.

For the three months ended Jan. 31, Wal-Mart earned $2.004 billion, or 45 cents per share, up 4.7 percent from $1.92 billion, or 43 cents per share, in the year-ago period, the Bentonville-based company said Tuesday morning. Fourth quarter sales increased by 10 percent to $56.6 billion, up from $51.4 billion in the comparable quarter a year earlier.

“It was a good year, but a year that was not quite up to our high Wal-Mart expectations,” said Lee Scott, Wal-Mart’s president and CEO. “In a difficult economic environment, we will spend almost $9 billion in capital expenditures and add approximately 8 percent to our retail square footage.”

According to a poll by First Call/Thomson Financial, 22 analysts expected fourth-quarter earnings of 44 cents a share, but that number came after warnings that Wal-Mart wouldn’t meet higher earnings that were predicted in November. At that time, Wal-Mart said fourth-quarter earnings would fall between 46 cents and 48 cents per share and analysts surveyed had been expecting income of 47 cents a share.

Analysts have been awaiting Wal-Mart’s fourth-quarter results, which are widely viewed as a good barometer of the nation’s economy. The Tuesday release came as retailers are struggling to cope with a slow down in domestic spending and plummeting consumer confidence.

John Lawrence, an analyst who follows Wal-Mart for Morgan Keegan & Co. in Memphis, said the fourth-quarter numbers were “O.K.,” adding that Wal-Mart isn’t a company that lives and dies by fourth-quarter sales as many upscale retailers do.

“For several years, Wal-Mart has become more of a place where people buy basic goods,” Lawrence said. “Wal-Mart … doesn’t rely on all of its income to come in the fourth quarter and also does well in the first quarter [of any given fiscal year]. … A lot of Wal-Mart purchases are not discretionary purchases. They’re things people need every day.”

During the fourth quarter, sales at Wal-Mart stores open more than a year rose 3 percent, while sales at its Sam’s Club warehouse division rose 3.3 percent for an average 3.1 percent increase for all stores.

Operating profit for the company’s Wal-Mart Stores segment rose 1.5 percent from a year-ago in the fourth quarter to $2.765 billion. The Sam’s Club warehouse unit reported operating profit of $294 million, an increase of 8.5 percent over the $271 million recorded for the similar period a year ago.

The company’s International segment had an operating profit of $490 million, representing an increase of 8.9 percent from a year ago.

Shares of Wal-Mart were up by 79 cents (1.5 percent) to $53.15 at 3 p.m. Tuesday on a volume of 8.5 million shares being traded, about seven hours after Wal-Mart announced its fourth-quarter earnings. The stock, a component of the Dow Jones industrial average, has underperformed the index by about 5 percent in the last 52 weeks.

During the fiscal year, Wal-Mart opened 41 discount stores, closed two, and expanded/relocated one additional store. The company also opened 167 Supercenters (including 104 discount store replacements), 13 Sam’s Clubs, 12 Neighborhood Markets, four regional distribution centers and six food distribution centers.

During the same time period, Wal-Mart opened or acquired 77 international units: 39 in Mexico, 20 in Canada, six in Brazil, five in China, five in the United Kingdom, and one each in Argentina and Korea.

As of Jan. 31, Wal-Mart had 1,736 Wal-Mart stores, 888 Supercenters, 475 Sam’s Clubs and 19 Neighborhood Markets in the United States. Internationally, the company operated units in Argentina (11), Brazil (20), Canada (174), China (11), Germany (95), Korea (6), Mexico (499), Puerto Rico (15), and United Kingdom (241).