Wal-Mart Stores Inc. on Tuesday posted a higher-than-expected 23 percent rise in quarterly profit, but the world’s largest retailer warned that increasing costs could pressure growth this year.
Wal-Mart reported fiscal fourth-quarter net income of $1.92 billion, or 43 cents a share, up from $1.56 billion, or 35 cents a share, in the year-earlier quarter. Total sales climbed 26 percent, to $51.39 billion.
Analysts had pegged Wal-Mart’s earnings at 42 cents a share for the fourth quarter ended Jan. 31, according to First Call/Thomson Financial.
But Chief Financial Officer Thomas Schoewe said in a conference call that his company faces difficult comparisons and increased pressure on operating expenses this year.
President and Chief Executive Lee Scott said during the call that Wal-Mart rolled back prices over the year and planned to continue doing so despite stronger Asian currencies, higher labor costs and higher costs of raw materials, especially oil. Analysts said higher oil costs would lead to higher transportation costs for Wal-Mart, which operates its own fleet of trucks.
Scott said the company’s lower prices had in part fueled better-than-expected holiday sales in November and December.
Schoewe said Wal-Mart’s first-quarter results should be in line with current analyst estimates of 28 cents a share.
The stock lost 87 cents, to $58, after falling as low as $55 during New York Stock Exchange trading.
