Wal-Mart 1Q Figures Balloon

Sales at Wal-Mart Stores Inc. jumped by 14 percent and net income increased by 20 percent in the fiscal first quarter as consumers stuck with “Everyday Low Prices” amid the sluggish economy.

On May 14, Bentonville-based Wal-Mart, the world’s largest company, reported net income of $1.65 billion, or 37 cents a share, for the three-month period ended April 30, compared with $1.38 billion, or 31 cents a share, for the same quarter a year earlier. Analysts surveyed by Thomson Financial/First Call had expected the company to earn 36 cents a share.

Sales rose to $54.96 billion from $48.05 billion, with first-quarter sales at stores open at least one year, or same-store sales, increasing by 8.1 percent.

The company’s Wal-Mart Stores segment posted a 15 percent surge in sales to $35.42 billion, while its Sam’s Club wholesale-warehouse division had a 12 percent increase in sales to $7.3 billion. Sales at Wal-Mart’s McLane Co., a wholesale distributor that sells merchandise primarily to convenience stores and foodservice industries, climbed 4 percent to $3.26 billion. International sales grew 18 percent to $8.99 billion.

Earlier in May, Wal-Mart reported a 3.3 percent rise in April same-store sales, lower than the 3.9 percent gain analysts were expecting, largely because of cool temperatures and a March Easter.

Wal-Mart said it expects 2002 earnings to be at the low end of Wall Street forecasts because the economy is recovering at a slower pace than expected.

Wal-Mart said it was comfortable with forecasts for 2002 earnings per share of $1.74 to $1.76. The retailer gave the same forecast when it reported fiscal fourth-quarter and full-year earnings in February.

Analysts polled by Thomson Financial/First Call on average expected a profit of $1.77 per share for 2002. Estimates ranged from $1.75 to $1.81.

For the second quarter, Wal-Mart said it expects earnings of 43 cents to 44 cents a share. Twenty analysts on average expected 43 cents, according to First Call.

The retailer said on the call that sales at stores open at least a year, or same-store sales, are forecast to rise 5 percent to 7 percent in the second quarter.

n Wal-Mart is seeking regulatory approval to acquire Franklin Bank of California, hoping a banking license will make it cheaper to process debit-card transactions.

The world’s largest retailer said it does not plan to enter retail banking.

Franklin’s industrial bank charter is attractive to Wal-Mart because it allows a company that is not a bank to own a bank. This would also give Wal-Mart access to technology to withdraw debit card purchases from a consumer’s checking account.

Acquiring a bank could also allow Wal-Mart to dabble in financial services like savings accounts, loans and investment plans.