LONDON - Wal-Mart Stores Inc (WMT.N) posted a 14.3 percent drop in fourth-quarter operating income at its international businesses, hit by the stronger dollar, but said underlying growth was solid, led by the UK, China and Brazil.
The world's top retailer, which serves more than 100 million shoppers a year from over 7,800 stores in 16 countries, said on Tuesday international operating income was $1.49 billion in the three months to Jan. 31 on an 8.4 percent drop in net sales fo $24.7 billion.
At constant currencies, however, international operating income was up 5.1 percent and net sales up 9 percent.
Chief Executive Mike Duke said in a statement currency headwinds could continue for the next three quarters.
Earlier Wal-Mart, which employs more than two million people and makes just under a quarter of its sales outside the United States, beat fourth-quarter profit forecasts, helped by higher sales at its namesake U.S. discount stores. [ID:nN17535726]
The firm, like rivals Carrefour (CARR.PA) from France and Britain's Tesco (TSCO.L), has been expanding abroad to tap faster growth in emerging markets. Last month, it bought a majority stake in Chilean supermarket chain D&S in a deal valued around $1.5 billion. [ID:nN23254476]
Wal-Mart said international gross profit margins fell slightly in the fourth quarter due in part to a shift to a lower price strategy in Japan and to higher markdowns in the seasonal clearance sale at its UK business, Asda.
Asda, Britain's second-biggest grocer, said sales at stores open at least a year rose 7.2 percent excluding fuel in the last quarter of 2008, up from 6.9 percent in the third quarter.
That was well above the 2.5 percent underlying growth reported by UK market leader Tesco for the seven weeks to Jan. 10, but below the 8.2 percent rise reported by smaller rival Wm Morrison (MRW.L) for the six weeks to Jan. 4.
Asda Chief Executive Andy Bond told reporters sales growth had continued to accelerate in early 2009 and that the UK business planned a substantially bigger cost savings plan this year compared with 2008. He declined to give further details.
Bond also criticised UK planning laws on new supermarkets saying Asda, as an estimate, might double its new store opening programme of nine for 2009 if restrictions were swept away.
Wal-Mart said comparable store sales in Brazil rose 4.9 percent in real terms in the fourth quarter.
In China, they were up 6.2 percent at Wal-Mart China and up 4.1 percent at Trust-Mart.
In Japan, however, comparable store sales at Seiyu were down 0.5 percent in the quarter. (Editing by David Cowell)