Wal-Mart Tops Street, Raises Dividend

Andrew Klips |

Wal-Mart Stores Inc. (WMT) reported its financial results for the fourth quarter and full year ended January 31, 2013 Thursday, surprising analysts with better-than-expected profits during the quarter, although the world’s largest retailer provided a tepid outlook for the first quarter as increasing gas prices and tax-related concerns have slowed consumer spending.

Revenue for the Dow component during the fourth quarter of fiscal 2013 totaled $127.9 billion, a 3.9 percent increase from $122.3 billion in the fourth quarter of fiscal 2012. Net income for the quarter rose to $5.61 billion, or $1.67 per share, from $5.16 billion, or $1.50 per share in the year prior quarter.

Analysts were expecting Bentonville, Arkansas-based Wal-Mart to report earnings per share of $1.57 on revenue of $128.2 billion.

"Walmart topped off a really good year with a solid fourth quarter," said Mike Duke, Wal-Mart Stores, Inc. president and chief executive officer. "…we added $22 billion in sales to top $466 billion. Walmart U.S. was a key driver of our five percent net sales increase.”

Total net sales for fiscal 2013 were $466.11 billion versus $443.85 billion in the year earlier.

Sales at domestic Wal-Mart stores increased 3.9 percent to $274.49 billion during fiscal 2013, up from $264.19 billion in fiscal 2012. International sales increased 7.4 percent to $135.2 billion from $125.87 billion the year prior. Sam’s Club stores chipped-in with a 4.9 percent rise in sales from $53.8 billion in 2012 to $56.42 billion last year.

The Wal-Mart chief may have said that the fourth quarter was “solid,” but same-store-sales, stores that have been open more than one year, only grew by 1 percent during the quarter. That figure was shy of analyst expectations of 1.5 percent growth.

The new year is getting off at a slow pace as consumers are starting to feel the impact of a 2 percent income tax hike that went into effect in January as part of Congress’ plan to avert the so-called fiscal cliff and blowing through the debt ceiling. Also impacting revenue is a smaller number of income tax return checks being cashed at Wal-Mart stores. The company has only cashed about $1.7 billion in tax refund checks so far this year, down 43 percent from the $3 billion it had cashed at the same time last year.

In its guidance, the company said that it expects first-quarter fiscal 2014 EPS in the range of $1.11 to $1.16 as it has considered “current economic factors that are affecting customers.” Analysts were expecting EPS of $1.19 for the first quarter. For the complete fiscal year 2014, Wal-Mart projects EPS in the range of $5.20 to $5.40.

Meanwhile, Wal-Mart raised its dividend for fiscal 2014 by 18 percent to $1.88 per share. The first dividend is slated to be 47 cents, payable on April 1 to shareholders of record as of March 12.

In fiscal 2013, the company returned $13 billion to shareholders via dividends and stock repurchases.

Shares, which were only up by about 1.3 percent so far in 2013 are tracking higher with the earnings beat this morning. Closing on Wednesday at $69.21, shares have popped ahead by 2.4 percent in the first hour of Thursday trading to $70.86.

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Companies

Symbol Name Price Change % Volume
WMT Wal-Mart Stores Inc. 70.88 0.21 0.30 6,674,206
PSA.P.Z Public Storage Dep Shs Representing 1/1000th Pfd S 25.42 0.03 0.12 12,283

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