Wal-Mart Profits Increase Less Than Usual

Wal-Mart Stores Inc. reported an 8 percent increase in fiscal third-quarter profits as consumers sought low-priced goods in the stalled U.S. economy. The world’s largest retailer said earnings growth should return to about 15 percent next year.

Wal-Mart said net income in the quarter ended Oct. 31 rose to $1.48 billion, or 33 cents a diluted share, from $1.37 billion, or 31 cents a share, in the year-ago quarter.

Wall Street analysts’ estimates ranged from 32 cents to 34 cents a share, with the consensus estimate at 33 cents, according to research firm Thomson Financial/First Call.

In the days immediately following Sept. 11, Wal-Mart saw a drop in the number of shoppers in its stores. But since then, Wal-Mart — known for its low prices — has seen sales rebound. The retailer also has been siphoning customers away from supermarkets and drugstores.

“The weaker economy has attracted additional customers in more frequency, and sales are running at pre-Sept. 11 levels,” Wal-Mart president and CEO Lee Scott, said on a recorded conference call. “When the economy improves, we will keep those customers.”

Wal-Mart also told investors on the call that its earnings growth rate should return to its annual target of about 15 percent in 2002. The Bentonville-based retailer also said it backed the fourth-quarter Thomson Financial/First Call estimate of 48 cents a share and expected a good holiday season.

Total sales for the third quarter rose 15 percent to $52.74 billion from $45.68 billion a year ago. Same-store sales, or sales at stores open at least a year, rose 6.7 percent from a year ago.

The Wal-Mart Stores segment, including Supercenters, reported that operating profit rose 4.8 percent from the same period last year to $2.35 billion.

The Sam’s Club segment had an operating profit for the quarter of $246 million, an increase of 12.3 percent compared with $219 million for the similar period in the previous year.

Wal-Mart’s international operations saw its operating profit of $344 million jump 42.7 percent from $241 million in the year-ago quarter.

At the end of October, the company had 1,637 Wal-Mart stores, 1,059 Supercenters, 492 Sam’s Clubs and 26 Neighborhood Markets in the United States. Internationally, it operated 1,133 stores.