Wal-Mart Profit Falls For First Time Since 1996

Wal-Mart Stores Inc. reported Aug. 15 its first earnings drop in a decade owing to its withdrawal from Germany. The company said its second-quarter net profit slumped 26% to $2.08 billion, after it booked a charge of $863 million for the sale of its German stores to Metro AG.

Its sales rose 11.3% from the same quarter of 2005 to $84.52 billion.

The world's largest retailer said last month that it was pulling out of Germany after eight years and would sell its 85 hypermarkets to the Metro chain. Wal-Mart had struggled to establish itself in Germany, which was its third-largest market after the U.S. and Japan, but the announcement still came as a surprise.

The earnings decline was Wal-Mart's first since early 1996, which itself was the company's first profit fall since it started trading as a public company in 1970.

The retailer also announced in the past quarter that it was selling its 16 stores in South Korea, but it did not mention any material impact from this in its earnings statement.

Copyright Agence France-Presse, 2006

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