Wal-Mart 1Q profit rises 6.9 pct on higher sales, beating expectations
Wal-Mart Stores Inc. on Tuesday said first-quarter profits rose 6.9 percent, but issued a cautious outlook for the current quarter and warned that the economy will be a “critical factor” in 2008.
The world’s largest retailer beat Wall Street’s expectations and cited improved inventory management and better customer service. How well those changes, part of a strategy begun two years ago, will continue to offset a sustained downturn in the economy is far from clear.
“There are still uncertainties during the rest of the year,” President and CEO Lee Scott said in a recorded call for investors. “The economy is playing a critical factor in 2008.”
Wal-Mart shares fell more than 2 percent, or $1.22, to $56.80 in afternoon trading.
Wal-Mart earned $3.02 billion, or 76 cents per share, in the three months ended April 30, up from $2.83 billion, or 68 cents per share, a year earlier.
Analysts polled by Thomson Financial had projected earnings of 75 cents per share.