Plus   Neg

Walmart Q4 Results Miss View Despite Overseas Sales Growth


The world's largest retailer, Wal-Mart Stores, Inc. (WMT) reported Tuesday a 15 percent drop in fourth-quarter profit hurt by higher costs. This was despite a turnaround in U.S. sales and continued strong performance at overseas stores.

Excluding a tax benefit, earnings per share from continuing operations missed analysts' expectations by two cents and quarterly revenues also missed estimates. The company provided earnings guidance for the first quarter and its fiscal-year 2013.

Walmart U.S. reported positive comparable store sales of 1.5 percent in the fourth quarter - the second consecutive quarter of positive comp sales.

"Today, every segment of our business is stronger than it was a year ago, and we're in a great position for fiscal year 2013," President and CEO Mike Duke said in a statement.

Walmart is currently focusing on improving profitability by strengthening productivity and reducing expenses through its 'Powered by Walmart' initiatives.

"Walmart has now leveraged operating expenses for two consecutive years. We have a relentless focus on the productivity loop to drive down costs and pass those savings on to customers," Duke noted.

The company said its international division delivered strong growth through both comp store sales and a record number of new units, including the acquisitions of Netto and Massmart.

Sam's Club comp sales has also been consistently strong throughout the year, and the company expects the growth to continue into fiscal 2013.

The Bentonville, Arkansas-based retail giant reported net income of $5.16 billion or $1.50 per share for the fourth quarter, down from $6.06 billion or $1.70 per share in the year-ago quarter.

Income from continuing operations for the quarter grew to $5.19 billion or $1.51 per share from $5.02 billion or $1.41 per share in the prior-year quarter, with both periods including a tax benefit of about $0.07 per share.

On average, 25 analysts polled by Thomson Reuters expected earnings of $1.46 per share for the fourth quarter. Analysts' estimates typically exclude special items.

Walmart's revenues for the quarter increased 5.9 percent to $123.17 billion from $116.36 billion in the same quarter last year, but missed seventeen Wall Street analysts' consensus estimate of $124.21 billion.

Total company net sales rose 5.8 percent to $122.28 billion from last year. Net sales included $2.4 billion in sales from acquisitions in the U.K. and South Africa as well as a negative currency exchange rate impact of $1.0 billion.

Walmart U.S. net sales grew 2.4 percent, and Walmart International net sales continued its strong run with a 13.1 percent growth. Sam's Club sales grew 6.8 percent from a year ago. Sam's Club comparable sales, without fuel, also increased 5.4 percent.

Looking ahead, for the first quarter, the company expects earnings from continuing operations in a range of $1.01 to $1.06 per share, and estimates Walmart U.S. comparable store sales to range between flat and up 2 percent. Street is looking for earnings of $1.05 per share for the quarter.

For fiscal 2013, Walmart anticipates earnings from continuing operations to be between of $4.72 and $4.92 per share, while analysts are currently expecting $4.90 per share.

WMT closed Friday's regular trading session at $62.48, up $0.16 on a volume of 8.19 million shares. In the past 52 weeks, the stock traded in a range of $48.31 to $62.63.

by RTTNews Staff Writer

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