Wal-Mart Stores Inc., the world’s largest retailer, boosted its profit forecast for the year after second-quarter earnings rose and the Sam’s Club wholesale chain helped the company halt a decline in sales at its U.S. stores. Profit in the fiscal year ending in January will be $4.41 to $4.51 a share, up from a previous projection of $4.35 to $4.50, Bentonville, Arkansas-based Wal-Mart said today in a statement. The average estimate of 25 analysts in a Bloomberg survey was $4.47. Second-quarter net income climbed 5.7 percent.
Chief Executive Officer Mike Duke is restoring thousands of products to shelves to lure shoppers coping with widespread unemployment and higher fuel prices. Second-quarter sales at the company’s U.S. stores open at least a year were unchanged from a year earlier, excluding fuel, Wal-Mart said. Those sales had fallen in the eight previous quarters. Wal-Mart’s changes “should provide a good base to return same-store sales into positive territory,” Bob Summers, an analyst at Susquehanna Financial Group, wrote in a note yesterday. He has a “positive” rating on the stock.
Excluding fuel, sales at Sam’s Club locations open at least a year gained 5 percent, while those sales at U.S. Wal-Mart stores declined 0.9 percent.
Wal-Mart advanced 82 cents, or 1.6 percent, to $50.80 at 8:03 a.m. in trading before the open of the New York Stock Exchange. The shares had dropped 7.3 percent this year before today.
Net income in the three months ended July 31 climbed to $3.8 billion, or $1.09 a share, from $3.6 billion, or 97 cents, a year earlier, Wal-Mart said. The average estimate of 21 analysts in a Bloomberg survey was $1.08 a share. Revenue rose 5.4 percent to $109.4 billion.
For the current quarter, the company forecast profit of 95 cents to $1 a share, excluding some items. The average estimate of 21 analysts was 97 cents.
Wal-Mart’s international net sales rose 16 percent to $30.1 billion, and Sam’s Club’s increased 9.5 percent to $13.6 billion. Net sales in the U.S. climbed 0.4 percent to $64.9 billion.
Net sales for the quarter included a benefit of $2.3 billion from currency exchange-rate fluctuations, Wal-Mart said.
Source: Lauren Coleman-Lochner (Bloomberg)