Wal-Mart today (22 February) reported fourth quarter net sales of US$89.3bn, an increase of 8.6% over the fourth quarter of fiscal 2005, and net income of $3.6bn, an increase of 13.4% from the fourth quarter last year. However, the world’s largest retailer offered a cautious profit outlook as it struggles with higher interest expenses and increased competition.

For the fourth quarter of fiscal 2006, the Wal-Mart Stores segment  reported operating income of $4.714bn, an increase of 11.1%, compared with $4.242bn in the fourth quarter of fiscal 2005. The Sam’s Club segment had segment operating income for the fourth quarter of fiscal 2006 of $377m, an increase of 6.2%, compared with $355m in the fourth quarter of fiscal 2005. International sales rose 9.6% to $18.4bn, but were hurt by weakness at ASDA, the retailer’s UK supermarket unit, which failed to meet fourth quarter profit and sales goals.

Q4 earnings per share were $0.86, up from $0.75 per share in the same prior year quarter. The company said that it expects earnings per share for the first quarter of fiscal 2007 to come in between $0.58 and $0.62, and for fiscal 2007, the forecast is $2.88 to $2.95. This is slightly below analysts expectations: those surveyed by Thompson Financial predicted FY2007 earnings of $2.98 per share.

“We’re pleased our trend of year-over-year increases in sales and net income continues,” said Wal-Mart president and chief executive officer Lee Scott.   “We added more than $7bn in sales in the quarter and ended the year strong.”

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