Wal-Mart reports income boost, but holiday sales falter

Wal-Mart Stores Inc. reported Thursday morning (Feb. 18) that its fiscal year 2009 net income was up 6.9% over the 2008 period, but the company said fiscal first quarter 2010 sales will be “challenging” because of deflation and other factors.

For its fiscal year 2009 (the year ended Jan. 31, 2010), the world’s largest retailer posted total revenue of $408.214 billion, up 0.94% over the same period in 2008. Net income for the fiscal year was $14.335 billion, compared to $13.4 billion in the 2008 period.

Per share earnings for the year of $3.66 was ahead of market estimates of $3.61. Also, the company’s fourth quarter per share earnings of $1.17 were ahead of the quarterly analyst estimates of $1.12.

“The company added more than 34 million net square feet of selling space this year, with International contributing more than half of that growth,” Mike Duke, president and CEO for Bentonville-based Wal-Mart. “We expect continued strong growth from
International this fiscal year. U.S. sales will be more challenging in the first quarter, as Walmart U.S. cycles through strong year-over-year comparisons and deflation. We remain focused on growing top line sales, and expect improvement in the United States as the year progresses.”

However, the holiday season was not as financially rewarding as the company had hoped. Comparable store sales during the fourth quarter ending Jan. 31 were down 2% compared to the same period in 2008.

“For the fourth quarter, comparable store sales were below guidance, due primarily to deflation in grocery and electronics. Operating income for the fourth quarter was up 5.4 percent, including the restructuring charge,” according to the company statement.

Wal-Mart stores in the U.S. generated fiscal year revenue of $258.22 billion, up 1.1% over the previous year. Annual net income for the stores was $19.522 billion, up 5.2% over 2008.

The company’s Sam’s Clubs posted annual revenue of $46.71 billion, down 0.4% from the 2008 period. Net income for the club stores was $1.512 billion, down 8.1% compared to 2008.

“During the fourth quarter of fiscal year 2010, Sam’s Club recorded a pre-tax charge of $174 million for restructuring its operations, including the closure of 10 U.S. clubs. On an adjusted basis with respect to these restructuring charges, Sam’s operating income was up 9.4 percent,” the company noted in the earnings statement.