It now appears after gloomy reports from Target (TGT), JC Penny (JCP), and Macy’s (M) that Wal-Mart may just be the only large retailer actually growing.
Wal-Mart (WMT) today reported its sales and earnings for the quarter ended July 31, 2008. Net sales for the second quarter of fiscal year 2009 were approximately $101.6 billion, an increase of 10.4 percent from $92.0 billion in the second quarter last year.
Income from continuing operations for the second quarter was $3.385 billion, an increase of 9.3 percent from $3.097 billion in the second quarter last year. Diluted earnings per share from continuing operations for the second quarter of fiscal year 2009 increased to $0.86 from the previous year’s second quarter result of $0.75 per share (after reclassifying for discontinued operations, as noted below). The prior year included a net benefit of $0.04 per share from three items: the net impact of a reduction of general liability and workers’ compensation claim accruals, gains from the sale of certain real estate properties, and charges for legal and other contingencies.
In the 8-K released today Wal-Mart said:
“Free cash flow should be considered in addition to, rather than as a substitute for, net income as a measure of our performance or net cash provided by operating activities as a measure of our liquidity. Additionally, our definition of free cash flow is limited and does not represent residual cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt service and other obligations or payments made for business acquisitions. Therefore, we believe it is important to view free cash flow as supplemental to our entire statement of cash flows. “
So, how much “free cash flow” did Wal-Mart generate? $4.9 billion in the year’s first six months.
Increases Guidance
“For the third quarter of fiscal year 2009, we estimate the Company’s comparable store sales increase in the United States to be between one and two percent, which continues to reflect some sales volatility from week to week,” said Tom Schoewe, Wal-Mart Stores, Inc. executive vice president and chief financial officer. “We expect the Company’s earnings per share from continuing operations for the third quarter to be between $0.73 and $0.76 and are raising our current forecast for earnings from continuing operations for the full fiscal year to a range of $3.43 to $3.50 per share.”
Not in the release? Share repurchases. Anything less than $1.5 – $2 billion would be disappointing.
Wal-Mart is just on auto-pilot now. Those who were lamenting their sales release just a week ago must now be perhaps wishing they were not so, alarmist?
Even at the new earnings guidance levels I think it is safe to say those are “in the bag” so to speak and one ought to really be looking at how much Wal-Mart can surpass those.
Disclosure (“none” means no position):Long WMT, None
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