Wal-Mart (WMT) Posts First $100 Billion Quarter, Driven By Overseas

February 19, 2008 by Douglas A. McIntyre

Despite concerns to the contrary, Wal-Mart (NYSE: WMT) is still growing. It posted the first $100 billion quarter in its history. The world’s largest retailer said net sales for the fourth quarter of fiscal year 2008 were $106.269 billion, an increase of 8.3 percent over the fourth quarter of fiscal year 2007. EPS from continuing operations for the fourth quarter of fiscal year 2008 were $1.02, up 7.4 percent from $0.95 per share in the same prior year quarter, including a net charge of approximately $0.02 per share for certain items this year.

The top-line numbers were a bit misleading. US sales at the Wal-Mart flagship brand rose a pathetic 5% to $67.4 billion. Sales from international operations rose almost 19% to $27 billion. At that growth rate, overseas sales could match domestic sale in seven or eight years.

Operating income overseas rose over 14% to over $1.7 billion, or 23% of the global total.

Wal-Mart says it expects expects diluted earnings per share from continuing operations to be between $0.70 and $0.74 for the first quarter of fiscal year 2009, and between $3.30 and $3.43 for the full fiscal year 2009. Both numbers were below analyst estimates of $.74 and$3.44.

It is clear that Wal-Mart will now have to rely almost completely on international sales to meet its forecasts for the up-coming year. China and Mexico better deliver.

Douglas A. McIntyre