A tight rein on expenses helped Wal-Mart Stores Inc. boost fourth-quarter profits by 22.2 percent, but Mike Duke, chairman and chief executive officer, said U.S. sales will be “more challenging” in the current quarter.
Quarterly earnings attributable to the Bentonville, Ark.-based firm increased to $4.63 billion, or $1.21 a diluted share, from $3.79 billion, or 96 cents, a year ago. Adjusted profits of $1.17 a share topped Wall Street estimates by 5 cents.
Revenues for the quarter ended Jan. 31 advanced 4.5 percent to $113.65 billion from $108.75 billion. Comparable-store sales at the U.S. Wal-Mart unit slid 2 percent for the 13 weeks ended Jan. 29.
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“The diligent way we managed our businesses and tight control of our costs resulted in the company leveraging operating expenses in the fourth quarter,” Duke said. “We plan to grow expenses slower than the rate of sales in the new fiscal year.”
The firm added 34 million square feet of selling space last year, with more than half the gain coming from its international businesses.
“U.S. sales will be more challenging in the first quarter, as Wal-Mart U.S. cycles through strong year-over-year comparisons and deflation,” Duke said. “We remain focused on growing top-line sales, and expect improvement in the United States as the year progresses.”
Wal-Mart expects comps in its namesake U.S. business to range from down 1 percent to up 1 percent for the 13 weeks ended April 30, which mostly coincides with the first quarter. Year-ago comps rose 3.6 percent.
For complete coverage, see Friday’s issue of WWD.