Wal-Mart reports record results, but lowers guidance for full year
Wal-Mart, the world’s largest retailer and the nation’s third largest home improvement retailer, reported total-company second-quarter sales of $91.99 billion, up 8.8 percent over last year. Net income rose 49 percent to $3.1 billion compared with $2.18 billion last year.
The company noted that though the numbers reflect record sales and earnings on the outset, operational net income rose just 4.1 percent to $3.11 billion from $2.98 billion in the previous year.
“Although some people will report that Wal-Mart has had record sales and earnings, our underlying operating performance this quarter is not what we expect of ourselves,” said Lee Scott, president and CEO of Wal-Mart Stores. “For the remainder of this year, our management team is focused on inventory improvements, delivering quality products at low prices and store execution at the highest standards.”
In the company’s Wal-Mart Stores division, sales rose 6.5 percent to $59.01 billion from $55.39 billion last year. Sales at Sam’s Club stores rose 8.6 percent to $11.38 billion from $10.47 billion in the previous year. International sales showed the most growth at 15.7 percent, to $21.6 billion from $18.66 billion last year.
Comparable-store sales in the United States rose 2 percent. For the third quarter, the company estimates the comparable-store sales increase in the United States to be between 1 percent and 3 percent.
The company updated its full-year guidance, lowering earnings-per-share expectations to between $3.05 and $3.13, down from an earlier estimate of $3.15 and $3.23 per share.
"The company's current earnings guidance reflects the need to continue to improve our underlying operating performance," said Tom Schoewe, Wal-Mart Stores executive vp and CFO. "This guidance also reflects the economic trends that have developed in many of our major markets."
Wal-Mart was listed as the third largest home improvement retailer in the United States on HCN’s top 500 list of home channel retailers, with $24 billion in home improvement product sales in 2006.