Sam's Club sales help Wal-Mart
By Don Hogsett -- Home Textiles Today, 2/23/2004
BENTONVILLE — Helped by an earnings turnaround at its Sam's Club unit, and continued growth abroad, Wal-Mart Stores Inc. recorded a fourth-quarter profit of $2.7 billion, up 8.5 percent from $2.5 billion last year.
Sales at the world's largest retailer — also the world's largest public company — climbed at a double-digit pace, rising by 12.1 percent, to $74.5 billion from $66.4 billion last year, with international expansion still the company's fastest-growing segment.
Sales in U.S. stores grew by 11.3 percent, to $50.6 billion from $45.5 billion last year, a relatively subdued pace compared with the 25 and 30 percent increases the company was putting up a few years ago. Picking up some of the slack was the retailer's international operation, where sales grew almost twice as fast, rising by 17.3 percent, to $14.3 billion from $12.2 billion last year. Sam's Clubs grew by 9.5 percent, to $9.6 billion from $8.7 billion.
Same-store U.S. sales rose 4.8 percent, with a revitalized Sam's Club outpacing growth in core Wal-Mart stores. Sam's grew its comps by 6.7 percent, compared with the 4.4 percent pace at Wal-Mart.
Even more importantly, Sam's grew its operating profits at a faster pace than any of Wal-Mart's other segments — up 17.1 percent, to $343 million from $293 million last year. Growing almost twice as fast as the U.S. stores, operating profits in the international segment grew by 15.2 percent, to $862 million from $748 million a year ago.
With the rate of growth decelerating in the United States as the format matures here, operating profits in the core U.S. Wal-Mart franchise grew by 8.3 percent, to $3.9 billion from $3.6 billion the preceding year.
| Qtr. 1/31 (x000) | 2003 | 2002 | % chg |
| Sales | $74,494,000 | $66,400,000 | 12.2 |
| Oper. income (EBIT) | 4,050,000 | 3,602,000 | 12.4 |
| Net income | 2,722,000a | 2,508,000a | 8.5 |
| Per share (diluted) | 0.63 | 0.57 | 10.5 |
| Average gross margin | 21.8% | 21.7% | — |
| SG&A expenses | 16.4% | 16.3% | — |
| 12 months | 2003 | 2002 | % chg |
| Sales | 256,329,000 | 229,616,000 | 11.6 |
| Oper. income (EBIT) | 12,673,000 | 11,334,000 | 11.8 |
| Net income | 9,054,000b | 7,955,000b | 13.8 |
| Per share (diluted) | 2.07 | 1.79 | 15.6 |
| Average gross margin | 22.5% | 22.3% | — |
| SG&A expenses | 17.5% | 17.4% | — |
| a-Fourth-quarter results include $696 million in miscellaneous income, up 37.8 percent from $505 million last year; $54 million in interest income, up 68.8 percent from $32 million last year; and $82 million in income from the company's minority interest in a joint venture, up 28.1 percent from $64 million last year. Prior-year results include $56 million in income from the McLane Co. subsidiary, sold in May 2003 to Berkshire Hathaway Inc. b-12-month results include $2.4 billion in miscellaneous income, up 19.9 percent from a year ago; $164 million in interest income, up 24.2 percent from $132 million last year; $214 million in income from a minority interest in a joint venture, up 10.9 percent from $193 million in 2002; and $193 million in income form the discontinued McLane operation, up 40.9 percent from $137 million last year. |
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| Wal-Mart | 2003 | 2002 | % change |
| Sales | $50,646,000 | $45,489,000 | 11.3 |
| Oper. income | 3,880,000 | 3,584,000 | 8.3 |
| Sam's Club | 2003 | 2002 | % change |
| Sales | 9,555,000 | 8,726,000 | 9.5 |
| Oper. income | 343,000 | 293,000 | 17.1 |
| International | 2003 | 2002 | % change |
| Sales | 14,293,000 | 12,185,000 | 17.3 |
| Oper. income | 862,000 | 748,000 | 15.2 |
