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Wal-Mart pricing pays off

Net sales grew 8.3% to $106.27 billion, fueled by both domestic and international growth.

Wal-Mart Stores Inc., the world's largest retailer, said yesterday that its renewed focus on low prices paid off with a 4 percent increase in fourth-quarter profit as holiday shoppers bought discounted groceries and home electronics as well as health and wellness products.

International growth also helped boost profit and sales. Stores in 13 countries outside the United States accounted for about 25 percent of total company sales in the quarter, up from 23 percent a year earlier.

Wal-Mart said net income in the quarter ended Jan. 31 rose to $4.096 billion, or $1.02 a share, compared with $3.94 billion, or 95 cents a share, a year earlier.

Net sales grew 8.3 percent to $106.27 billion, helped by 18.8 percent international growth and 5.0 percent growth at U.S. Wal-Mart stores. Overall revenue, including membership fees, rose to $107.43 billion from $99.078 billion a year earlier.

Analysts surveyed by Thomson Financial had expected profit of $1.02 a share on revenue of $106.9 billion. Wal-Mart forecast earnings per share for fiscal 2009 of $3.30 to $3.43. The range of 23 analyst estimates for the full year was $3.30 to $3.55, according to Thomson.

Chief Executive Officer Lee Scott said Wal-Mart's decision last year to refocus on low prices after a brief foray into fashion and trendier merchandise had paid off in a time of mounting economic uncertainty.

The price strategy "we put in place at the beginning of the year was exactly the right strategy" for customers "in a tough economic environment," Scott said.

Scott said Wal-Mart benefited from a strong holiday business after moving early last fall to discount groceries, toys and home electronics, including name-brand, flat-screen televisions and computers. Health and wellness items also sold well, he said.

Scott said the economy remained a critical issue for consumers this year. "Customers were more cautious in their spending in January," he said.