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Wal-Mart sees profits climb by 26%

Lifted by rising sales, wider margins and steady gains in its international business, second-quarter profits at Wal-Mart Stores Inc. jumped up by 25.6 percent, to $2.0 billion from $1.6 billion last year.

Sales advanced by 13.1 percent, to $59.7 billion from $52.8 billion last year. Same-store sales climbed by 6.4 percent as cost-conscious consumers flock to the nation's big discounters.

In an assist to the bottom line, in addition to the stronger sales, average gross margin widened by 30 basis points, to 21.9 percent from 21.6 percent a year ago. Climbing faster than the rate of sales, gross margin dollars improved by 15.6 percent, well ahead of the 13.1 percent increase in sales.

In the retailer's core Wal-Mart Stores segment, sales improved by 14.1 percent, to $38.6 billion, while operating profits climbed even faster, by 17.2 percent, to $3.0 billion.

Sam's Club sales advanced by 9.2 percent, to $7.9 billion, but operating profits grew at a slower pace of 3.0 percent, to $275 million.

International sales climbed by 15.9 percent, to $9.7 billion, and operating profits shot up by 61.9 percent, to $510 million.

Wal-Mart Stores Inc.

Qtr. 7/31 (x000) 2002 2001 % chg
Sales $59,694,000 $52,799,000 13.1
Oper. income (EBIT) 3,469,000 2,964,000 17.0
Net income 2,038,000 1,622,000 25.6
Per share (diluted) 0.46 0.36 27.8
Average gross margin 21.9% 21.6%
SG&A expenses 17.0% 16.8%
Six months 2002 2001 % chg
Sales 114,654,000 100,851,000 13.6
Oper. income (EBIT) 6,375,000 5,536,000 15.2
Net income 3,690,000 3,001,000 23.0
Per share (diluted) 0.83 0.67
Average gross margin 21.8% 21.4%
SG&A expenses 17.1% 16.9%


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