Wal-Mart quarterly profit rises

Source: Exec Digital USA

Date :5/13/2008 5:07:01 AM

American discount chain Wal-Mart Stores Inc, the world's largest retailer, has reported a seven percent rise in quarterly profit as discounts drew “hard-up” U.S. shoppers looking for bargains on essentials like food and pharmacy items.

Wal-Mart indicated results for the current quarter could miss Wall Street estimates as it faces the reality of a tough economic environment, higher transportation costs and customers who are running out of money between paychecks.

Profits up, shares down

Wal-Mart shares, which through Monday were up 22 percent year to date, fell three percent in early trading.

However, net income rose to $3.02 billion in the first quarter ended on April 30, from $2.83 billion a year earlier.

More for your buck

The increased income, says Wal-Mart, is down to consumers who are seeking out low prices, especially for basic items like groceries, shampoo and cleaning supplies, as the U.S. economy falters and prices of food and fuel soar.

The economic downturn comes just as Wal-Mart has gotten back to the basics - promoting low prices and slowing expansion plans, to improve results at its existing stores.

At beginning of the year, Wal-Mart slashed prices on thousands of items by up to 30 percent to win sales from cash-strapped U.S. shoppers - a shrewd move.

May 13, 2008