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Wal-Mart (WMT) Q4 Earnings Rise 8 Pct, Lifts Dividend By 18 Pct

 February 21, 2013 07:24 AM

(By Balachander) Wal-Mart Stores Inc. (NYSE: WMT), the world's largest retail chain store operator, posted higher earnings and revenue for the fourth quarter driven by gains in comparable store sales and the Dow component raised its fiscal year 2014 dividend by 18 percent to $1.88 per share.

Earnings per share from continuing operations attributable to Walmart (EPS) were $1.67, up 10.6 percent for the fourth quarter. Income from continuing operations increased 8 percent to $5.88 billion.

Total revenue grew 3.9 percent to $127.92 billion. On a constant currency basis, net sales would have increased 3.7 percent, the company said.

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Wall Street analysts, on average, expected earnings of $1.57 per share on sales growth of 4.30 percent to $128.8 billion.

Total U.S. comparable store sales rose 1.2 percent. Comparable sales - a key retail metric - from Walmart U.S. increased 1.0 percent with positive ticket and a traffic decline of 10 basis points. Sam's Club comps gained 2.3 percent.

Walmart U.S. sales gained 2.6 percent and International sales grew 6.9 percent. Sam's Club sales rose 3.4 percent for the final three months of last year.

Retailers such as Wal-Mart are operating in weak macroeconomic conditions that are curtailing customer spending. Moreover, it faces strong competition from other discount, department, drug, dollar, variety and specialty stores, warehouse clubs and supermarkets.

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Generally, retailers generate more than 30 percent of their annual sales from the final three months of the year due to the holiday season and has certain key events such as Thanksgiving Day, Black Friday and Christmas.

Membership and other income dropped 7.8 percent for the fourth quarter.

Looking ahead for the first quarter, the Bentonville, Arkansas-based company expects earnings of $1.11 to $1.16 per share, while Wall Street analysts expect $1.18 per share.

For the full year ending January 2014, the company forecast earnings per share of $5.20 to $5.40, while consensus estimate $5.37 a share. The outlook includes higher costs of about 9 cents a share for the company's e-commerce operations.

For the 13-week period from Jan. 26 to Apr. 26, 2013, Walmart U.S. expects comp store sales to be around flat. The company expects comp club sales, without fuel, for the same period to range between flat and 2.0 percent.

"February sales started slower than planned, due in large part, to the delay in income tax refunds. We began seeing increased tax refund check activity late last week in our stores, resulting in a more normalized weekly sales pattern for this time of the year," commented Bill Simon, Walmart U.S. president and chief executive officer.

For the third quarter, Wal-Mart's profit grew 9 percent, but revenue came in short of estimates. The company earned $3.64 billion or $1.08 per share and revenue increased 3.4 percent to $113.93 billion. Total comparable store sales grew 1.7 percent.

WMT closed Wednesday's regular session at $69.21. The stock has been trading between $57.18 and $77.60 for the past 52 weeks.



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