World’s largest retailer Wal-Mart Stores Inc reported a 1.8 percent fall in U.S. comparable-store sales for the fourth quarter even as it posted a 27 percent rise in quarterly profit.
The company attributed the majority of the Walmart U.S. comparable store decline to traffic. Total U.S. comparable-store sales, without fuel, fell 1.1 percent, compared with a 1.6 percent fall last year.
Wal-Mart said some of the pricing and merchandising issues in Walmart ran deeper than it initially expected.
The company is considered a key barometer of consumer spending that accounts for roughly 70 percent of U.S. economic activity.
We are pleased with Walmart’s strong earnings performance for both the fourth quarter and the full year across our three operating segments. At the same time, we are disappointed by Walmart U.S. fourth quarter sales,” said Mike Duke, CEO of Wal-Mart Stores.
The Bentonville, Arkansas-based company said net income was $6.06 billion or $1.70 a share for the quarter ended Jan.28, compared with $4.8 billion or $1.25 a share a year-ago. Underlying earnings per share from continuing operations attributable to Walmart were $1.343, exceeding consensus estimates and company guidance.
Net sales rose 2.5 percent to $115.6 billion, as International sales rose 9 percent to $31.4 billion.
For the first quarter, Wal-Mart expects earnings from continuing operations between $0.91 and $0.96 a share, while analysts expect 96 cents a share.
The company expects earnings per share from continuing operations attributable to Walmart for fiscal 2012 in the range of $4.35 to $4.50, while analysts expect $4.44. Wal-Mart said it continues to expect net sales for fiscal 2012 to grow between four and six percent.
Even though the consumer spending environment remains relatively fragile, retailers like Wal-Mart continue to attract customers and improve earnings through various promotional activities.
Shares of Wal-Mart, which closed at $55.38 on Friday, fell nearly 4 percent to $53.33 at 09:43 am EST on the NYSE on Tuesday.