Wal-Mart profits continue to climb

BENTONVILLE, AR — With same-store sales climbing sharply higher, and margins gaining strength as well, Wal-Mart Stores Inc., the world's largest retailer, drove first-quarter profits up by almost 20 percent, to $1.7 billion from $1.4 billion last year.

Sales at the retailer climbed by 14.4 percent, as each of its three retailing divisions — Wal-Mart, Sam's Club and the international business — grew at a double-digit pace, capitalizing on consumers' growing appetite for low prices.

Helping to fuel the strong earnings growth, same-store sales grew by 8.1 percent, driven by an even stronger gain of 8.6 percent in the core Wal-Mart Stores. Sam's Club same-store sales rose by 5.7 percent.

Overall sales for the international juggernaut climbed by 14.4 percent, to $55.0 billion from $48.1 billion last year, as the company tacked on more than $6 billion in fresh sales over the past 12 months.

While the core Wal-Mart Stores are still the retailer's largest and most profitable business, it's the international segment that's growing the fastest in sales and profits both. Sales in the international unit shot up by 17.8 percent in the opening quarter, to $9.0 billion, while profits expanded by 77.2 percent, to $381.0 million from $215.0 million the preceding year. International sales now account for more than 16 percent of total revenues, from virtually zero less than a decade ago when the company made its first tentative effort to tap into the Mexican market, a move it later cemented by buying into the market in what has become a template for the company's international growth.

Sales in Wal-Mart Stores grew by 15.2 percent, to $35.4 billion from $30.8 billion last year, and operating profits for the core retailing franchise, including supercenters, grew by 16.1 percent, to $2.6 billion. Sales in Sam's Clubs grew by 11.6 percent, to $7.3 billion, while operating profits in the low-margin warehouse club format were flat at $218.0 million.