Wal-Mart Q2 Net Income $4.09 Billion, Earnings Guidance Lowered

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by Roby Brock ([email protected]) August 14, 2014 6:14 am 116 views 

Retail giant Wal-Mart saw its profits climb slightly higher with the help of rising revenues, but it lowered expectations for its earnings for the remainder of the year.

The Bentonville-based world’s largest retailer posted second quarter consolidated net income of $4.09 billion on revenue of $120.13 billion.  One year ago, Wal-Mart reported quarterly consolidated net income of $4.07 billion on revenue of $116.83 billon.

Income from continuing operations attributable to Wal-Mart actually fell by 3.4% to $3.923 billion during the quarter compared to last year’s same time period.

Diluted earnings per share were $1.26 for the quarter compared to $1.24 one year ago.

“I’m pleased with our solid earnings per share performance,” said Doug McMillon, Wal-Mart Stores president and CEO. “As it relates to the positives from the quarter, I’m encouraged by the performance of our International business, our Neighborhood Market sales in the U.S. and by our e-commerce growth. As it relates to our challenges in the quarter, we wanted to see stronger comps in Walmart U.S. and Sam’s Club, but both reported flat comp sales. Stronger sales in the U.S. businesses would’ve also helped our profit performance.”

Other financial highlights included:

  • Walmart U.S. comp sales were flat for the 13-week period ended Aug. 1, 2014. Comp sales for the Neighborhood Market format rose approximately 5.6 percent. Walmart U.S. net sales increased $1.9 billion, or 2.7 percent, to more than $70 billion.
  • Walmart International grew net sales 3.1 percent to $33.9 billion.
  • Sam’s Club comp sales, without fuel,2 were flat for the 13-week period ended Aug. 1, 2014. Sam’s Club delivered 11.9 percent membership income growth for the quarter.
  • E-commerce sales globally increased approximately 24 percent on a constant currency basis, with double-digit growth in the U.S., U.K., China and Brazil.

Wal-Mart also lowered its earnings guidance for the remainder of the fiscal year. The company said its earnings per share (EPS) guidance would be in a range of $4.90 to $5.15, down from a previous range of $5.10 to $5.45.

“This range includes third quarter EPS guidance of $1.10 to $1.20. The new full year guidance reflects incremental investments in e-commerce and higher U.S. health-care costs than previously anticipated,” the company said.

Wal-Mart’s shares (NYSE: WMT) closed trading on Wednesday at $74.03. The company’s stock has traded between $71.51 and $81.37 per share during the past year.