Wal-Mart posted expectation-beating fourth quarter earnings yesterday (20 February), with profits up 9.8% boosted by a new strategy and cost-cutting measures at its flagship US division.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
The world’s largest retailer said net income increased to US$3.94bn, or $0.95 per share, up from $3.59bn or $0.86 per share for the comparable period of last year.
Sales rose by 11% to $98.1bn, with same-store sales increasing 1.6%. For the full year, same store sales were up 2.1%. This is the smallest gain Wal-Mart has reported in the last 27 years. Wal-Mart said its same-store sales were held back by renovations at more than half of its US stores and poor US demand for clothing.
Chief financial officer Thomas Schoewe said Wal-Mart’s programme of ‘roll backs’ had widen the price difference between itself and competitors in the US during the fourth quarter, helping attrack US customers.
Gross margins improved widened to 22.96% from 22.66% a year ago.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataWal-Mart’s international profit rose 32%, thanks to what was termed a “tremendous performance” from Mexico. The retailer’s UK unit, Asda, reported its strongest sales gain in two years.
“We are extremely pleased to close fiscal year 2007 with both record sales and earnings,” said Lee Scott, Wal-Mart president and chief executive officer. “Our company’s performance for the fiscal year was helped by a strong fourth quarter. Even if you take into account the discontinued operations, we still had record results.”
Looking to the current financial year, Wal-Mart said it expects per-share earnings of $0.68 to $0.71 in the first quarter and $3.15 to $3.23 for fiscal year 2008.
