Wal-Mart profits up 16 percent

By Staff -- Home Textiles Today, 5/17/2004 12:00:00 AM

BENTONVILLE, ARK. —

Helped by a continuing recovery at its Sam's Club unit and impressive gains in its international business, Wal-Mart Stores Inc., the nation's and the world's largest retailer, drove first-quarter profits up 16.4 percent, to $2.2 billion from $1.9 billion last year.

Sales at retailing's 1,000 pound gorilla rose 14.2 percent, to $64.8 billion from $56.7 billion. Same-store sales in U.S. stores rose 6.4 percent, with comps at Wal-Mart stores rising 5.9 percent, and Sam's Club growing even faster, by 8.8 percent.

Helping to drive the earnings gain was continued steady improvement in the Sam's Club warehouse segment, where operating profits shot up 30.9 percent, to $267 million from $204 million last year. Profits from international operations grew even faster, soaring 46.6 percent, to $563 million from $384 million last year.

Underlining the growing importance and profitability of the international operation, Wal-Mart's far-flung and rapidly growing international store base now contributes 26 percent of the parent company's total profits, but only 19.4 percent of sales, making it a vastly more profitable enterprise than either the U.S. warehouse clubs or supercenters.

Average gross margin inched up 20 basis points, or two-tenths of a percentage point during the period, to 22.8 from 22.6 a year ago. But any margin expansion was offset by higher costs, which rose 30 basis points, or three-tenths of a percentage point, to 18.3 percent from 18 percent a year ago.

Wal-Mart Stores Inc.

First quarter segment results