Tuesday, February 19, 2008

Record Sales and Profits at Wal-Mart

Wal-Mart Stores, the world's largest retailer, reported today its renewed focus on low prices paid off with a 4% rise in profit for its fourth quarter 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 U.S. accounted for about 25% of total company sales in the quarter, up from 23% a year earlier.

Net sales grew 8.3% to $106.27 billion, helped by 18.8% international growth, 6.3% growth at Sam's Club, and 5.0% growth at U.S. Wal-Mart stores (see chart above, click to enlarge).

“For the fourth quarter, we topped $100 billion in sales, the first time in history that any retailer has reached this milestone in a single quarter,” said Lee Scott, Wal-Mart Stores, Inc. president and chief executive officer. “We had a very strong underlying operating performance, exceeding our expectations for the quarter. In addition to another year of record sales and earnings, we also delivered a record return to our shareholders this year through more than $11 billion in share repurchase and dividends.”

Comment: Another example of a U.S. corporation reporting record sales and profits, partly because of strong global sales. Also, Wal-Mart's record quarterly sales of $106 billion includes sales through January 2008, suggesting that consumer spending remains healthy through the first month of this year, suggesting that we are not in recession.

7 Comments:

At 2/19/2008 11:10 AM, Anonymous Anonymous said...

What are the same store results for stores open at least 1 year in the U.S.?

Are you saying that Walmarts deeper than normal discounting practices here in the US contributed to an increase in profit from International sales?

 
At 2/19/2008 11:11 AM, Anonymous bob wright said...

In addition to another year of record sales and earnings ....

Wait a minute. How can this be?

I thought this was the worst economy since the great depression.

Please, Hillary or Obama, rescue us from these obscene profits.

I wonder why Hillary, when she was a member of the Wal-Mart board of directors, didn't propose that the government take the profits of Wal-Mart and give this money to other more worthy endeavors like she now proposes for the profits of Exxon Mobil.

 
At 2/19/2008 11:22 AM, Anonymous Anonymous said...

Same store sales (without gasoline sales at Sam's Club) up 1.4% year over year. Doesn't keep up with inflation.

 
At 2/19/2008 12:27 PM, Anonymous Anonymous said...

as penny-pinching U.S. shoppers scoured its discount stores for low prices on necessities like food to offset tough economic conditions.

For its current quarter, the world's largest retailer expects sales at its U.S. stores open at least a year, a key retail gauge known as same-store sales, to be flat to up 2 percent, due to the "challenging" economic environment. It also forecast first-quarter earnings that could possibly come in below analysts' expectations.

http://www.reuters.com/article/ousiv/idUSWEN398620080219

Doesn't sound nearly as rosy as the posting by the host. Overseas sales are up due to currency devaluation same as the price of oil which is now 98 a bbl.

 
At 2/19/2008 12:30 PM, Anonymous Anonymous said...

Anon 11:22 AM said...

"Same store sales (without gasoline sales at Sam's Club) up 1.4% year over year. Doesn't keep up with inflation."

Does that mean that Walmart actually had lower sales than the previous year after adjusting for inflation and as Anon 12:27 pointed out currency devaluation?

 
At 2/19/2008 1:40 PM, Anonymous Anonymous said...

Does that mean that Walmart actually had lower sales than the previous year after adjusting for inflation

The long answer, it is a function of the inflation deflator used. CPI, trimmed CPI, PCE, PPI and GDP are the major deflators. And in all cases, Walmart' domestic real same store sales were negative. The short answer is YES.

and as Anon 12:27 pointed out currency devaluation.

Overseas sales are more difficult to assess as to currency adjustments and inflation. But I would guess that most of the gains in international sales were a combination of U.S. currency devaluation and local foreign inflation.

Give kudos to Walmart for breaking the $100 billion quarterly sales barrier. It's a milestone, like when Microsoft hit $500 billion in market cap during the dot.con boom.

 
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