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financial

Despite Tough Quarter, Stores Remain Upbeat

Wal-Mart’s flat profits stood in direct contrast to the other stores reporting results Thursday, all of which saw profits declines.

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Hurt by currency effects, international sales declined 11.1 percent to $21.3 billion in the first quarter. The strongest markets were Brazil, Mexico and the U.K., where ASDA’s George brand gained 40 basis points of market share.

Shares fell 93 cents, or 1.9 percent, to $49.10 Thursday.

After the markets closed, Nordstrom reported that, in the quarter ended May 2, net income slipped to $81 million, or 37 cents a diluted share, from $119 million, or 54 cents a share, a year ago. Sales fell 9.2 percent, to $1.71 billion from $1.88 billion, and were off 13.2 percent on a same-store basis. Excluding a 6 cent tax benefit, EPS was 31 cents, 5 cents above consensus estimates, which also called for revenues of $1.69 billion.

The Seattle-based company said its gains in gross profit and credit card revenues in the quarter were partly offset by bad debt expenses, but Mike Koppel, chief financial officer, defended the company’s credit card business on a conference call with investors.

“That end of the business has seen some tougher innings than some others, but we continue to have customers in our portfolio that spend more than those who have other cards,” he said. “When this cycle turns around and when it does correct itself, we expect that business to be back to where it was.”

Based on its first-quarter results, the company boosted its annual EPS guidance to the range of $1.25 to $1.50, up from projections of $1.10 to $1.40.

Shares of Nordstrom closed the session before the earnings announcement at $20.95, up 68 cents, or 3.4 percent.

Kohl’s net income fell 10.5 percent to $137 million, or 45 cents a diluted share, from $153 million, or 49 cents, a year earlier. Profits came in ahead of the 43 cents analysts projected. Sales for the quarter ended May 2 rose 0.4 percent to $3.64 billion from $3.62 billion as comparable-store sales fell 4.2 percent.

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