Wal-Mart Posts Profits, Lower Comp-Store Sales

By Alan Wolf On Mar 12 2010 - 11:41am

BENTONVILLE, ARK. — Greater cost controls and increased productivity helped boost Wal-Mart’s fourth-quarter profits by 23 percent, although U.S. sales were flat for the year and are expected to remain so through the current quarter.

Net income was $4.6 billion for the three months ended Jan. 31, while net sales rose 4.6 percent to $112.8 billion, including a benefit of $1.9 billion from favorable exchange rates.

For the full year, net sales rose 1 percent to $405 billion, excluding a $9.5 billion benefit from favorable exchange rates, and net income rose 6.4 percent to $14.8 billion.

In the U.S., Walmart’s net sales slipped 0.5 percent to nearly $71 billion for the fiscal fourth quarter and net sales at Sam’s Club rose 3.8 percent to $12.3 billion.

Full-year net sales at Walmart rose 1.1 percent to $258.2 billion while net sales at Sam’s Club slipped 0.4 percent to $46.7 billion.

Comp-store sales at Walmart were down 2 percent for the quarter due to price compression in CE and groceries, and slipped 0.2 percent for the year, the company said.

Comp sales at Sam’s Club were down 0.7 percent for the quarter and up 1.4 percent for the year, excluding fuel sales. Walmart’s operating income rose 5.4 percent in the fourth quarter to $5.6 billion, and increased 5.2 percent for the full year to $19.5 billion.

Operating income at Sam’s Club fell 30.4 percent in the fourth quarter to $305 million, reflecting restructuring charges that included the closure of 10 stores, and declined 8.1 percent for the full year to $1.5 billion.

Looking ahead, Wal-Mart president/ CEO Mike Duke said, “U.S. sales will be more challenging in the first quarter, as Walmart 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.” The retailer projects comp-store sales of flat to -1 percent for U.S. Walmart stores for the current quarter ending April 30.

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