Wal-Mart says 2Q profit up 17%, raises outlook
NEW YORK -- Wal-Mart Stores Inc. posted a 17 percent increase in second-quarter profit Thursday and raised its full-year earnings forecast, helped by cost cuts and a renewed focus on low prices that is attracting financially squeezed shoppers around the world.
But the world's largest retailer predicted slower sales growth at its established stores for the current quarter, saying it is seeing some volatility as customers find it difficult to stretch their paycheck to the next payday.
The Bentonville, Ark.-based retailer said it earned $3.45 billion, or 87 cents per share, in the quarter ended July 31, up from $2.95 billion, or 72 cents per share, a year earlier.
Profit from continuing operations came to $3.39 billion, up 9.3 percent from $3.09 billion last year. That year's second quarter included a benefit of 4 cents per share from several one-time items.
Net sales rose 10 percent to $101.6 billion in the second quarter from $92 billion in the year-ago period. Analysts polled by Thomson Reuters expected $101.9 billion.
For the quarter, the discounter posted a solid same-store sales gain of 4.5 percent, compared to a 1.9 percent increase a year earlier. The results exclude fuel sales. Same-store sales, or sales at stores opened at least a year, are considered a key indicator of a retailer's health.
"We have improved customer traffic and ticket and overall sales growth in our markets," President and Chief Executive Lee Scott said in a statement. "While inflation and higher fuel costs are pressuring suppliers, retailers and customers worldwide, we're confident that Wal-Mart is well positioned for this economy."
The company boosted its full-year forecast Thursday to a range of $3.43 to $3.50 per share, citing strict inventory controls and other cost-cutting measures. That's up from a full-year forecast issued in February of $3.30 to $3.43.
Second-quarter sales were driven particularly by the international business, which is seeing more customers as the U.S. economic woes spread to other areas of the world. Its international sales rose 19.3 percent to $25.3 billion, helped by such countries as Canada, China, and Brazil. Scott told investors during a pre-recorded call Thursday that executives in international divisions say they're noticing more financial stress on their customers. In Puerto Rico, for example, shoppers are eating more sandwiches.
