Wal-Mart 4Q sales outpace income

Don Hogsett, February 25, 2002

BENTONVILLE, AR — With bargain-hungry consumers still shunning full-price department stores and flocking instead to the nation's big discounters, fourth-quarter sales at Wal-Mart Stores Inc., now the largest company in the world, jumped up by 13.5 percent, to $64.2 billion from $56.6 billion last year.

But paying the price for its low-pricing policy, profits couldn't keep pace with sales and rose at a more sluggish pace of 9.2 percent, to $2.2 billion from $2.0 billion last year.

"We had a good ending to a difficult year," said Lee Scott, president and coo. "Although we did not attain our goal of increasing earnings at the same rate of sales, our 8.9 percent growth in earnings per share in the fourth quarter represents more than triple the growth rate experienced in the first six months of the year."

Average gross margin held steady during the closing quarter, at 20.7 percent, but operating costs rose modestly, to 15.6 percent of sales from 15.4 percent the prior year.

Sales in the core Wal-Mart Stores business jumped up by 15.3 percent, to $40.9 billion from $35.5 billion last year. Operating profits in the Christmas quarter rose by 12.8 percent, to $3.1 billion from $2.8 billion last year.

Sam's Club sales advanced by 10.9 percent, to $8.3 billion from $7.5 billion a year ago. But profits were tougher to come by and were roughly flat in the closing quarter, inching up just 1.0 percent, to $297 million. For all of last year, however, Sam's Club profits rose at a sharply higher pace of 9.1 percent.

Off their former blazing pace, when the company was making acquisitions, international sales moved up a solid 7.4 percent, to $10.8 billion from $10.1 billion last year. But as the retailer fine-tunes its global operations, international profits jumped up by 19.2 percent, to $584 million. And for all of last year, international profits swelled by 31.1 percent, to $1.1 billion.

Wal-Mart Stores Inc.

Qtr. 1/31/02 (x000) 2002 2001 % CHG
Sales $64,211,000 $56,556,000 13.5
Oper. income (EBIT) 3,829,000 3,538,000 8.2
Net income 2,189,000 2,004,000 9.2
Per share (diluted) 0.49 0.45 8.9
Average gross margin 20.7% 20.7%
SG&A expenses 15.6% 15.4%
12 months 2002 2001 % CHG
Sales 217,700,000 191,329,000 13.8
Oper. income (EBIT) 12,077,000 11,490,000 5.1
Net income 6,671,000 6,295,000 6.0
Per share (diluted) 1.49 1.40 6.4
Average gross margin 21.2% 21.5%
SG&A expenses 16.6% 16.5%

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