4Q Profits Improve at Wal-Mart
February 21, 2005-- Home Textiles Today,
Bentonville, Ark. — Helped by stronger sales and continued expansion, fourth quarter profits at Wal-Mart Stores Inc. improved 16.2 percent, to $3.2 billion from $2.7 billion last year, modestly exceeding Wall Street expectations.
Earnings per share came in at $0.75, slightly ahead of a consensus forecast of $0.74.
Sales at the world's largest retailer, driven by continued worldwide expansion, climbed 10.4 percent, to $82.2 billion from $74.5 billion last year. But the crucial gauge of same-store sales rose at a sluggish pace of 1.5 percent during the all-important Christmas quarter, as consumers did their Christmas shopping elsewhere.
Same-store sales were strongest at SAM's Club, rising 2 percent, and were weak in the core Wal-Mart Stores, edging up just 1.4 percent.
Average gross margin improved by 70 basis points, or seven-tenths of a percentage point, to 22.5 percent from 21.8 percent a year ago. But gains there were largely offset by rising costs, which climbed by 60 basis points, or six-tenths of a percentage point, to 17 percent of sales from 16.4 percent a year ago.
Acting as a drag on the bottom line, interest expense shot up by almost a half during the closing quarter, by 47.8 percent, to $297 million from $201 million a year ago.
Wal-Mart Stores Inc.
|Qtr. 1/31 (x000)||2004||2003||%change|
|a-Net sales, excluding $802 million in miscellaneous income, compared with $696 million last year. For the 12 months, miscellaneous income totaled $3 billion versus $2.4 billion.
b-Earnings for the 12 months of 2003 include $193 million in income from a discontinued operation.
|Oper. Income (EBIT)||5,298,000||4,746,000||11.6|
|Per share (diluted)||0.75||0.63||19.0|
|Average gross margin||22.5%||21.8%||—|
|Oper. Income (EBIT)||17,091,000||15,025,000||13.8|
|Per share (diluted)||2.41||2.07||16.4|
|Average gross margin||22.9%||22.5%||—|