Retailers Wal-Mart Stores Inc., Target Corp. and Kohl’s Corp. reported increases in first-quarter earnings Thursday, but Wal-Mart’s chief executive warned that the spike in energy prices may hurt sales this year.
Bentonville, Ark.-based Wal-Mart said net income climbed to $2.17 billion, or 50 cents a share, from $1.86 billion, or 42 cents a share, in the year-ago period. The latest results beat estimates by 1 cent a share, according to Thomson First Call.
Sales surged 14 percent, to $64.8 billion, the biggest gain in more than two years. U.S. same-store sales, or sales at stores open at least a year, rose 6.4 percent. Same-store sales are the best indicator of a retailer’s health.
Wal-Mart CEO H. Lee Scott said he is “optimistic” as employment and incomes rise, but estimated that increasing gasoline prices take an additional $7 a week away from shoppers.
“Wal-Mart is a barometer for the discount segment, and we will be watching the impact of increasing prices in food and gasoline on the low-income consumer,” said Ken Perkins, research analyst at Thomson First Call.
Shares of Wal-Mart added 19 cents, to $55.25, on the New York Stock Exchange.
Target said net income surged 25 percent, to $438 million, or 48 cents a share, 1 cent a share better than estimates. A year ago, the Minneapolis-based company earned $349 million, or 38 cents a share. It was Target’s largest gain in more than a year.
Sales jumped 12 percent, to $11.6 billion. Same-store sales rose 6.6 percent, spurred by a 7.3 percent increase at Target’s namesake stores. Same-store sales increased 6.1 percent at Marshall Field’s but fell 1.4 percent at Mervyn’s. Target is trying to sell both chains.
One analyst said Target attracted a wide range of shoppers by offering low-price basics such as toilet paper and more fashionable merchandise such as high-heeled clogs by designer Isaac Mizrahi.
“It’s able to draw from the Wal-Mart customer base and also from the department store base,” said James Luke, a money manager at BB&T Asset Management in Raleigh, N.C.
Target stock sank $1.18, to $43.17, on the NYSE.
Kohl’s said net income rose to $113.8 million, or 33 cents a share, from $111 million, or 32 cents a share, a year earlier. The most recent results matched estimates.
The Menomonee Falls, Wis.-based company said sales climbed 12 percent, to $2.38 billion. Same-store sales slipped 0.1 percent.
The report came out after the close of trading.
In other earnings news:
– Dell Inc. said first-quarter net income rose 22 percent, to $731 million, or 28 cents a share, from $598 million, or 23 cents a share, a year ago. The latest results matched estimates. Sales surged 21 percent, to $11.5 billion. The Round Rock, Texas-based company’s shipments jumped 25 percent.
Dell’s share of the global PC market rose to 18.6 percent in the quarter from 16.9 percent a year ago, according to researcher IDC. Hewlett-Packard Co. is in second place, at 15.6 percent. But in the U.S., Dell leads with 30 percent, nearly double Hewlett-Packard’s 17 percent, researcher Gartner Inc. said.
The report came out after the close of trading.
