REUTERS – Wal-Mart Stores Inc posted a better-than-expected quarterly profit on Thursday, including a 2.6 percent rise in sales at its Walmart U.S. division’s stores open at least a year, as warm weather and an earlier Easter enticed shoppers to spend.
The world’s largest retailer, which was recently rocked by allegations of bribery in Mexico, earned $1.09 per share from continuing operations, compared with a profit of 98 cents a year earlier.
Wal-Mart had forecast earnings per share of $1.01 to $1.06. Analysts, on average, expected it to earn $1.04 per share, according to Thomson Reuters I/B/E/S.
Shares of Wal-Mart jumped 2.8 percent to $60.85 in premarket trading.
Walmart U.S. same-store sales have risen for three straight quarters following nine consecutive quarterly declines. Wal-Mart expected Walmart U.S. same-store sales to be flat to up 2 percent. Analysts, on average, expected them to rise 1.4 percent, according to Thomson Reuters.
For the current second quarter, Wal-Mart expects to earn $1.13 to $1.18 per share from continuing operations. Analysts were looking for a profit of $1.16 per share.
Walmart U.S. same-store sales should rise 1 percent to 3 percent this quarter, Walmart U.S. Chief Executive Bill Simon said on a recorded call.
Walmart was cutting costs and pushing those savings into lowering prices on items such as food to stay ahead of competitors. While that effort drove sales growth during the quarter, it also crimped margins. The gross profit rate at Walmart U.S. was expected to continue to decline as it reduces prices this year, Simon said.
Wal-Mart has been faced with negative comments from shareholders, employees and activists after a New York Times report on April 21 that Wal-Mart de Mexico, or Walmex, allegedly orchestrated bribes of $24 million to help it grow quickly last decade and that Wal-Mart’s top brass tried to cover it up.
The company said the bribery investigation was not expected to have a material impact on its business, but said it “can provide no assurance that these matters will not be material to its business in the future.”
This year, total company sales were still expected to rise 5 percent to 7 percent, Chief Financial Officer Charles Holley said.
(Reporting by Jessica Wohl and Brad Dorfman in Chicago; Editing by Maureen Bavdek)
