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Spring’s Cold Start: Wal-Mart Strong but Others Suffer in Qtr.

Wal-Mart was among retailers kicking off the first-quarter earnings season Tuesday, boasting double-digit profit growth and a high single-digit sales increase.

Net income for the first quarter advanced 14.1 percent to $1.86 billion, or 42 cents a share, for the quarter ended April 30. Results were reduced by $101 million, or 2 cents, on an aftertax basis for a change in accounting related to money received from suppliers. Year-ago profits totaled $1.63 billion, or 37 cents, a result that was restated to reflect Wal-Mart’s decision to expense stock options.

Revenues for the three months climbed 9.8 percent to $57.22 billion from $52.13 billion a year ago. Comparable-store sales inched up 2.2 percent, below the Bentonvillian standard of seasons past.

Sales from the firm’s McLane unit, which distributes groceries and nonfood items to convenience stores, drugstores and others, were not included in the revenue figure since the business is slated to be sold to Berkshire Hathaway Inc. this quarter.

At the flagship Wal-Mart division, operating profits, which are before interest, unallocated corporate expenses and income taxes, increased 8.1 percent to $2.75 billion from $2.55 billion. Before the change in accounting, operating profits shot up 10.1 percent to $2.8 billion. Sales at the division expanded by 9 percent to $38.62 billion from $35.42 billion a year ago.

Scott said the rest of the first half will resemble the quarter just ended. “Sales growth will improve in the second half of the year, but I believe that it’s largely going to be based on the fact that, at Wal-Mart stores, we had easier comparisons.”

For the second quarter, the firm is looking for earnings of 49 to 51 cents a share. Wall Street had 51 cents penciled in for the period. Wal-Mart stood by its full-year earnings guidance of $2 to $2.05 a share.



J.C. PENNEY CO. INC.

J.C. Penney on Tuesday posted a double-digit drop in income for the first quarter ended April 26.

For the three months, income fell 29.1 percent to $61 million, or 20 cents a diluted share, compared with $86 million, or 29 cents, in the same year-ago quarter. The consensus estimate among Wall Street analysts was 18 cents a share, according to Thomson/First Call. The quarter’s results included a $7 million credit reflecting $21 million in real estate gains on the sale of several closed locations that more than offset the $14 million of charges associated with the previously announced catalog restructuring.
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