Wal-Mart's Q1 profit rises 10%, beats Street
Bentonville, Ark. Wal-Mart Stores reported Tuesday that its first-quarter net income rose 10% on cost cuts and the strength of its international division.
Net income for the quarter ended April 30 was $3.32 billion, compared with $3.02 billion in the year-ago period.
Revenue rose nearly 6% to $99.85 billion, from $94.24 billion in the prior year. Wall Street expected revenue of $98.45 billion for the period.
However, same-store sales dropped 1.1%, which the retailer attributed to a continued decline in customer counts at its U.S. namesake stores. Analysts had expected a 0.6% dip.
Wal-Mart, which generates more than $400 billion in sales annually, is considered a key barometer of consumer spending, so economists closely monitor the retailer’s sales trends; Tuesday’s report indicated that the average consumer is still struggling.
"Our customers, particularly in the United States, are still concerned about their personal finances and unemployment, as well as higher fuel prices," Mike Duke, Wal-Mart's president and CEO, said in a statement. "Our commitment to reducing prices and managing expenses positions us well across the retail landscape."
Wal-Mart benefited during the recession as affluent shoppers traded down to discounters. In recent months, the retailer has encountered increasing competition from all types of retailers, which aggressively lowered prices.
Walmart's U.S. division posted a 1.1% increase in revenue, while its international division posted a 21.4% increase. Its Sam’s Club division saw a 4.6% increase.
Same-store sales slipped 1.4% at its U.S. namesake stores, while Sam’s Club same-store sales, excluding fuel, edged up 0.7%.