US retail giant Wal-Mart has reported a 6.2% increase in earnings for the first quarter to US$2.83bn on sales 8.3% higher at $85.39bn. The company said earnings and sales for the first quarter represented a record for the company.
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Earnings per share from continuing operations were $0.68, against $0.64 per share in the three months to the end of April 2006. Both sales and earnings for the quarter were in line with analysts’ forecasts.
However, president and CEO Lee Scott expressed some disappointment with the first-quarter results. “While these are record sales and earnings, we feel there was an opportunity to have done better,” he said. “Delivering on our mission – saving people money so they can live better – is more important than ever around the world. The worldwide organisation is focused on improving sales and returns.”
In a conference call, Scott said sales and profit for the first quarter were “not where we would have expected to be nor where we believe we should be. You will see us be more committed than ever to price leadership.”
Net sales at the Wal-Mart Stores and Sam’s Club chains both rose by 5.6%, to $55.44bn and $10.32bn respectively, while Wal-Mart’s international sales rose by 18.5% in the first quarter to $19.63bn.
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By GlobalDataOperating income at Wal-Mart Stores rose by 1.8% to $3.93bn, while Sam’s Clubs observed a 19.8% rise in operating income to $0.36bn. Wal-Mart said operating income from its international operations increased by 19.3% to $0.90bn.
Comparable store sales growth in the US in the first quarter, excluding fuel sales, was 0.6%, the company said, but the majority of this growth was provided by Sam’s Club stores. Comparable sales at Wal-Mart outlets actually fell by 0.1% in the first quarter. Wal-Mart is forecasting US comparable stores sales growth of between 1% and 2% for the second quarter.
The retailer also said it was forecasting earnings per share from continuing operations of between $0.75 and $0.79 for the second quarter. However, this is at the low end of analysts’ forecasts, with a poll by Thomson Financial forecasting earnings per share of $0.79 for the second quarter.
