Wal-Mart Profit Up 9.2% as Sales Rise

Wal-Mart Stores Inc. said its fiscal fourth-quarter profit rose 9.2% as the retailer sold more groceries and attracted customers from Kmart Corp.

Net income rose to $2.19 billion, or 49 cents a share, and sales in the quarter ended Jan. 31 rose 14% to $64.2 billion.

Wal-Mart offered more discounts in the quarter to fend off Kmart, which cut prices on thousands of goods in an unsuccessful attempt to win shoppers before seeking bankruptcy protection.

Although the moves helped boost sales, profit margins narrowed at Wal-Mart’s main unit, which includes its grocery stores, Chief Financial Officer Thomas Schoewe said.

Analysts surveyed by Thomson Financial/First Call raised their fourth-quarter profit forecast by 1 cent to 49 cents after Wal-Mart said this month that higher-than-expected sales would help it exceed estimates. The company Tuesday raised its forecast for this year’s earnings to $1.74 to $1.76 a share, in line with analysts’ projections.

Shares of Bentonville, Ark.-based Wal-Mart fell 74 cents to close at $54.29 on the New York Stock Exchange.

Prices are expected to return to “more normal levels” this year, Schoewe said. Wal-Mart forecast first-quarter profit of 35 cents to 36 cents a share, on a 5% to 7% increase in revenue. Analysts had estimated earnings of 35 cents, First Call said.

Wal-Mart’s sales at stores open at least a year rose 6.9% last quarter. Annual revenue reached $217.8 billion, making Wal-Mart the world’s biggest company by sales.