Wal-Mart Net Income $3.8 Billion for Q2

Sales in U.S. were up each month in the quarter

Wal-Mart on August 16 reported solidly higher profit for its fiscal second quarter as U.S. sales rebounded and international demand surged. The company saw net income of $3.8 billion for the three months ending July 31, a rise of 5.7% from the 2010 second quarter.

The earnings marked an acceleration in profits from the 3% rise in the first quarter for the discount retailer.

"I'm encouraged by the sales improvement in our Walmart U.S. stores," said Wal-Mart chief executive Mike Duke. Duke said comp sales -- sales in stores open at least a year -- increased every month in the quarter. "This was the best quarterly performance since the third quarter of fiscal 2010."

Wal-Mart, which has been battling a slump in its domestic market amid a struggling economy, is "committed to deliver positive comp sales by widening the gap on price," he said.

Continued strength in international sales led a 5.4% rise in net income, to $109.37 billion.

International sales for the company's main Walmart discount chain leaped more than 16% in the quarter, to $30.1 billion.
"I'm pleased that we've made so much progress on integrating the acquisitions of the Netto stores in the UK and Massmart in sub-Saharan Africa," Duke said.

"We look forward to the many opportunities we have in Africa to create jobs and help customers save money and live better."
But Wal-Mart sales in the United States, its huge domestic market, rose only a modest 0.4%, weighed down by a 0.9% drop in same-store sales amid sluggish economic growth, high unemployment and rising recession fears.

For the fiscal third quarter, Wal-Mart U.S .forecast comp sales ranging from negative one percent to positive one percent.
"We remain concerned about the economic pressure on our customers and the uncertain impact it can have on their shopping behavior," said Bill Simon, Walmart U.S. president and chief executive.

The Bentonville, Arkansas-based company raised its profit forecast for the 2012 fiscal year to between $4.41 and $4.51 earnings per share, in line with expectations and following last year's EPS of $4.18.

"This reflects our confidence in the business for the back half of the year," said chief financial officer Charles Holley.

Copyright Agence France-Presse, 2011

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