US retail titan Wal-Mart Stores reported a 16 percent jump in quarterly profits to US$3.449 billion on Thursday as it continued to weather a stiff front of economic winds buffeting consumers.
The retailer, based in Bentonville, Arkansas, and with operations spanning the globe, unveiled a set of slightly better-than-expected profits, while raising its full-year earnings forecast.
Wal-Mart’s coffers swelled as US consumers continued shopping at its stores, famed for their competitive prices on a wide range of goods, despite a persistent housing market slump, high fuel prices and a credit squeeze.
PHOTO: AP
“While inflation and higher fuel costs are pressuring suppliers, retailers and customers worldwide, we’re confident that Wal-Mart is well-positioned for this economy,” said Lee Scott, Wal-Mart Stores president and chief executive.
The world’s largest retailer reported fiscal 2009 second-quarter earnings per share (EPS) of US$0.86. Most analysts had predicted it would post an EPS of US$0.84.
Sales at Wal-Mart’s US stores, known for their cavernous box-like capacity, showed a healthy increase as did revenues from overseas.
Total group revenues increased 10 percent to US$101.5 billion.
Wal-Mart’s competitive pricing strategy appears to be paying dividends as the company forecast full fiscal year earnings of between US$3.43 and US$3.50 per share.
Company executives had previously said full-year earnings would likely range between US$3.30 and US$3.43 per share.
Analysts said it was likely that Wal-Mart’s quarterly earnings received support from a giant US$168 billion economic stimulus approved by the administration of US President George W. Bush, which was stuffed with one-off tax rebates aimed at firing up the economy and consumer spending.
However, some economists expect consumer spending to tighten in coming months as the effects of the stimulus wear off.
Net sales at Wal-Mart US and Sam’s Club, which comprise Wal-Mart’s domestic operations, rose a combined 16.5 percent while international sales climbed 16.9 percent.
Wal-Mart’s international footprint has also helped insulate it from sluggish economic growth in the US.
Wal-Mart owns Asda, the No. 2 supermarket chain in Britain after Tesco. It also operates stores in Brazil, China and Japan among other countries.
The retailer said it would likely book a gain from the sale of an Asda subsidiary in its third quarter, although it did not indicate what the expected gain would be.
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