Wal-Mart (WMT) reported results Tuesday and they did not disappoint.
The Numbers:
Net sales for Q4 of fiscal year 2008 were $106.269 billion, an increase of 8.3% over Q4 of fiscal year 2007. Income from continuing operations for the quarter was $4.096 billion, an increase of 4% from $3.940 billion in the fourth quarter of fiscal year 2007.
Diluted EPS from continuing operations for Q4 of fiscal year 2008 were $1.02, up 7.4% 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.
Net sales for the fiscal year ended Jan. 31, 2008 were $374.526 billion, an increase of 8.6% over fiscal year 2007. Income from continuing operations for the fiscal year ended Jan. 31, 2008 increased 5.8% to $12.884 billion, up from $12.178 billion in the prior year. Diluted EPS from continuing operations for the fiscal year ended Jan. 31, 2008 were $3.16, up 8.2% from $2.92 in the prior year.
The Company 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 (4% to 8.5% growth).
Hard to find something not to like there. The real key is that International Segment operating profits have risen from 21% to 23% of the company’s total. They grew at 11.8% for the year and 14% for Q4. At this pace, Wal-Mart will be 50/50 domestic and international profits in 6 to 8 years.
Wal-Mart ended the year with $5.5 billion in cash after buying back $7.691 billion in stock during the year. That means $2.412 billion was repurchased in Q4. Monday I said “anything less than $2.5 billion would be disappointing”. While not thrilled, it is hard to be upset when they basically nailed the number given to overall results.
Wal-Mart is excelling in a dismal operating environment. They are gaining customers from Target (TGT), buying back shares at decade low prices, plowing money into rapidly growing international operations and doing a much needed make-over on domestic ones. The results are showing up on the bottom line now for investors.
Whenever you have a company improving results in an environment that sees its competition and industry faltering, it is a good idea to take a real close look. When the industry does turn (they always do) what you then have is a much stronger position in it. Macro conditions will then dictate operational improvements and with that stronger position, the company’s performance ought to exceed that of the group.
Disclosure (“none” means no position):Long WMT, None
