Wal-Mart posts $3.32 billion in first quarter income; beats estimates

There is no recession at Wal-Mart, with the company reporting Tuesday (May 18) total sales of $99.848 billion for the first fiscal quarter of 2010 — a 5.9% increase over the same period in 2009.

And the fact that more than 100 million people shop with the world’s largest retailer each week, the sales gain provides the markets an indication of consumer behavior.

Also, Wal-Mart’s net income of of $3.324 billion was a 9.7% gain over the same period in 2009. The per share earnings of 88 cents beat the consensus Wall Street estimate of 85 cents per share.

“Walmart kicked off the fiscal year with record first quarter net sales and earnings, and I’m pleased that earnings exceeded guidance,” Mike Duke, Wal-Mart Stores Inc. president and CEO, said in the earnings statement. “Our teams around the world delivered on our commitment to the productivity loop. We leveraged operating expenses for the second consecutive quarter and improved the profitability of our business.”

However, the company saw its U.S. same-store sales dip 1.4% compared to the 2009 period.

Duke said Wal-Mart customers “are still concerned about their personal finances and
unemployment, as well as higher fuel prices.”

The company also forecasted second quarter earnings to be in the 93 cents to 98 cents range. The 2009 second quarter posted net income of 88 cents per share.

“Our guidance is based on our view of the global business. This includes the continuing challenging sales environment in the United States,” Tom Schoewe, executive vice president and chief financial officer, said in the statement. “The company grew sales by 6 percent and added more than 3.6 million square feet of selling space during the first quarter.

Schoewe also said the company continues with its capital spending budget of between $13 billion and $15 billion in fiscal year 2010, with most of that spent on new stores and remodeling existing stores.

Other notes from the earnings report include:
• Walmart International remains the fastest-growing segment, with net sales up more than 21% on a reported basis and almost 9% on a constant currency basis;
• Consolidated operating income for the first quarter was $5.8 billion, up more than 10% from last year, with a significant contribution from Walmart U.S.;
• Walmart U.S. comparable store sales for the first quarter 13-week period declined 1.4%. Sam’s Club posted a comparable club sales increase, without fuel, of 0.7%; and,
• The company added 3.6 million square feet of retail selling space this quarter and expects to have a significant number of new store openings in the second and third quarters.

Wal-Mart shares (NYSE: WMT) during the past 52 weeks have traded at a $56.27 high and a $47.35 low. The pre-market bid price on May 18 was above $53, higher than the Monday closing price of $52.73.