Global retailer Wal-Mart Stores Inc recorded on Tuesday flat growth in its annual earnings, with overseas acquisitions offsetting a sluggish US performance, but said the future looked brighter.
Wal-Mart chief executive Lee Scott noted that last year was still a record-breaker for the world's largest retailer and expressed confidence in its year-ahead prospects.
Over its fiscal year ended Jan. 31, Wal-Mart said net earnings crept up 0.4 percent to US$11.28 billion. Annual sales were up 11.7 percent to US$344.99 billion.
But for the year's fourth quarter, Wal-Mart said its net profit grew 9.8 percent year-on-year to US$3.94 billion.
Excluding exceptional items, that came to US$0.95 per share, well ahead of Wall Street's forecast of US$0.90.
Sales in the three months advanced 10.9 percent to US$98.09 billion, less than the figure of US$99.59 billion expected on the markets.
"Increased competition, high energy costs and the company's own merchandising miscues have tripped up Wal-Mart in recent years as evidenced by the deceleration in its same-store sales growth," Briefing.com analyst Patrick O'Hare said.
"Those points aside, Wal-Mart still reported record sales and earnings for its fiscal fourth quarter," he said.
The retailer's share price closed the day up a robust 3.67 percent at US$50.26 after executives detailed bullish earnings targets.
Wal-Mart's sales on home turf struggled during the past fiscal year, due in part to a slowing US economy but also to costly overhauls of some of its aging store interiors and a strategy of shifting to more upscale retail lines.
Despite pulling out of Germany and South Korea last year, Wal-Mart's overseas sales have held up.
"I believe in the strategic plan that is guiding our US stores," Scott said on a recorded conference call, while describing the fourth-quarter performance by Wal-Mart's international division as "phenomenal."
The group operates Asda stores in Britain and the struggling Seiyu chain in Japan. It reportedly plans to leapfrog French rival Carrefour by buying a Chinese retailer and become the biggest store chain in China.
In November, India's Bharti Group clinched a deal with Wal-Mart to launch the first mega-retail store joint venture in the fast-growing country.
However, Wal-Mart faces political opposition in India, where millions of mom-and-pop stores fear foreign competition will drive them out of business.
Since the third quarter, Wal-Mart has also upped its stake in Seiyu, and bought out its distribution operations in Brazil and Central America. The company is also seeking a Russian partner.
Mike Duke, vice chairman for Wal-Mart International, said sales in Mexico, Canada and South America had been particularly healthy, while Asda in Britain showed "increasing sales momentum."
"We are investing in customer and market research and we're developing a foundation for greater long-range business plans that focus on emerging markets, like India and China," he said during the conference call.
The international division showed a 32 percent surge in quarterly operating income to US$1.513 billion.
In the US, operating income at Wal-Mart Stores was up 11.3 percent on the quarter to US$5.248 billion.
But total US comparable store sales for the quarter increased only 1.6 percent and were up a slender 2.1 percent on the fiscal year as a whole.
Scott also countered virulent criticism of Wal-Mart's labor and environmental record. He said it was promoting employment diversity along with boosting staff healthcare spending and pushing leaner packaging.
"The fact is, we are a better Wal-Mart than we were one year ago," he said.
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