Wal-Mart: Another solid performance
By Don Hogsett -- Home Textiles Today, 8/23/2004
BENTONVILLE, ARK. — Helped by strong sales and lean inventories, second quarter profits at Wal-Mart Stores Inc., the world's largest retailer, rose 8.5 percent, to $2.7 billion from $2.4 billion last year.
Skewing the year-over-year earnings comparison substantially, last year's bottom line included $161 million in profits from a discontinued operation — the McLane Company distribution subsidiary. Pulling McLane out of the comparison, second quarter profits from continuing operations jumped an impressive 16.1 percent, to $2.7 billion from $2.1 billion.
Helped by growth abroad and strength at Sam's Club, sales increased at a double-digit pace, rising 11.3 percent, to $69.7 billion from $62.6 billion. Same-store sales in the United States rose 4.1 percent, with strong comps at Sam's offsetting softness in the core Wal-Mart Stores. Same-store sales at Sam's rose 8.8 percent, while comps at Wal-Mart stores edged up just 3.2 percent.
Overall sales in Wal-Mart stores rose 10.2 percent, to $46.9 billion, fueled by continued expansion. Total sales at Sam's rose 10.1 percent, to $9.4 billion from $8.6 billion, driven almost entirely by rapid same-store sales growth.
| Qtr. 7/31 (x000) | 2004 | 2003 | % chg |
| Sales | $69,722,000 | $62,637,000 | 11.3 |
| Oper. Income (EBIT) | 4,404,000 | 3,792,000 | 16.1 |
| Net income | 2,651,000a | 2,444,000a | 8.5 |
| Per share (diluted) | 0.62 | 0.56 | 10.7 |
| Average gross margin | 23.2% | 22.9% | -- |
| SG&A expenses | 18.0% | 17.8% | -- |
| Six months | 2004 | 2003 | % chg |
| Sales | 134,485,000 | 119,354,000 | 12.7 |
| Oper. Income (EBIT) | 8,008,000 | 6,879,000 | 16.4 |
| Net income | 4,817,000b | 4,305,000b | 11.9 |
| Per share (diluted) | 1.12 | 0.98 | 14.3 |
| Average gross margin | 23.0% | 22.7% | -- |
| SG&A expenses | 18.1% | 17.9% | -- |
| a-Second quarter results include a $56 million loss from the company's share in a joint venture, compared with a prior-year deficit of $41 million. Results in the prior-year quarter include $161 million in earnings from a discontinued operation, McLane Co., since sold off. | |||
| b-Six-month results include a $98 million loss from the company's share of a joint venture, compared with a year-before loss of $83 million. Results in the year-before first half include $193 million in earnings from a discontinued operation, McLane Co., since sold off. | |||
