Wal-Mart, Target earnings jump

LITTLE ROCK, Ark. -- Wal-Mart Stores Inc. overcame a tough pre- Christmas retailing environment to post an 8.4 percent gain in its fourth quarter profit, while rival Target Corp. reported a 21 percent jump in earnings on robust business at its flagship discount chain.

Wal-Mart, the world's biggest retailer, said Thursday its earnings rose to $2.72 billion, or 63 cents a share, for the three months ended Jan. 31, up from $2.51 billion, or 57 cents a share, a year ago.

Its revenue rose more than 12 percent to $75.2 billion from $66.9 billion a year ago. Sales in its U.S. stores open at least a year were up 4.8 percent. That measure is considered a good indicator of retail health.

Wal-Mart's earnings met the expectations of analysts surveyed by Thomson First Call. The company's net store sales of $74.5 billion also met Wall Street estimates.

"As we went through November and December it was a very challenging pre-Christmas environment," said Lee Scott, Wal-Mart's president and chief executive officer. "(But) January was an excellent month for Wal-Mart in terms of sales and profitability. And it was that excellent month that allowed us to have a successful quarter."

Cautious consumer spending plagued the retail sector all year, leaving Wal-Mart with decreasing sales-to-profit margins for much of 2003.

Tom Schoewe, Wal-Mart's chief fiscal officer, said a strengthening national economy should help the company earn between 48 and 50 cents a share in the current quarter, which ends April 30. Analysts surveyed by Thomson First Call are estimating 48 cents a share on average.

Wal-Mart posted earnings of 42 cents per share in the first quarter of last fiscal year.

For the year, Wal-Mart earned $9.05 billion, or $2.07 a share, up from $7.96 billion, or $1.79 a share, in 2002. Revenue rose to $258.68 billion from $231.58 billion in 2002.

In trading on the New York Stock Exchange, Wal-Mart shares were up $1.18, or 2.1 percent, to close at $58.38.

Minneapolis-based Target, meanwhile, saw its profits surge in the fourth quarter, as a robust performance at its discount store offset continued sluggish results at its Marshall Field's and Mervyn's stores.

Target said Thursday it earned $832 million, or 91 cents per share, for the three months ended Jan. 31, up from $688 million, or 75 cents per share, in the same quarter a year earlier.

The latest results beat the consensus estimate of 87 cents a share by analysts surveyed by Thomson First Call.

Revenue increased 10.7 percent to $15.57 billion for the quarter from $14.06 billion in the year-ago period. Same-store sales for the quarter increased 4.9 percent.

For the full year, earnings were $1.84 billion, or $2.01 a share, compared to $1.65 billion, or $1.81 a share, a year earlier. Total revenue rose 9.7 percent to $48.16 billion from $43.92 billion in 2002. The company said the increase was driven by a 2.9 percent increase in sales at stores open at least a year, and to the opening of new stores.

In trading on the NYSE, Target shares were down 58 cents, or 1.4 percent, to close at $41.71.

Contributing: Chris Williams

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