US retailer Wal-Mart has reported a strong set of second quarter profits worth US$2.7bn for the three months ended 31 July 2004.

This compares favourably with the $2.3bn reported in the year-ago period. “We consider this a solid performance in a difficult retail environment,” said chief executive Lee Scott.

Scott commented that high petrol prices were hitting consumers, but that the outlook nevertheless remained optimistic for the full year. “Although I am concerned about high gasoline prices, I continue to believe that growth in employment and real income will lessen the impact,” Scott commented.

Profit growth was ahead of sales growth, thanks to cheaper overseas sourcing and the strong sales performance of high profit-margin goods such as back-to-school wares. Diluted earnings per share from continuing operations were $0.62, up from $0.52 per share in the same prior year quarter.

Sales during the period under review rose 11.3% to $69.7bn. Same-store sales rose by 4.1%. Net sales for the six months ended 31 July, 2004, were $134.5bn, an increase of 12.7% over the first six months of fiscal 2004. Income from continuing operations for the six months increased 17.1% to $4.8bn, up from $4.1bn in the same prior year period, the company said in a statement.

Wal-Mart’s international operations posted operating profits of $748m for the quarter, an increase of 33.3% compared with $561m in the second quarter of fiscal 2004.