Wal-Mart Stores Inc. demonstrated the importance of price on Tuesday when it posted fourth-quarter profits that beat expectations and sales that were its highest ever.
The retailer said net profits for the three months ended Jan. 31 dropped 7.4 percent to $3.8 billion, or 96 cents a diluted share, from $4.1 billion, or $1.02 a diluted share, a year earlier, but the numbers beat the company’s previously lowered forecast. Last month, Wal-Mart reduced its profit estimates for the quarter to a range of 91 cents to 94 cents a share from the $1.03 to $1.07 previously expected. Revenues for the quarter inched up 1.7 percent to a record-breaking $109.1 billion from $107.3 billion.
“Our performance relative to competitors was exceptionally strong in the fourth quarter and throughout the year,” said Mike Duke, the firm’s president and chief executive officer, during an earnings call. “We expect this momentum to continue. We’ve built strong momentum during the past year in a very tough economy. We will take what has worked for us and work hard at doing it even better.”
Net sales for the fourth quarter were $108 billion, an increase of 1.7 percent from $106.2 billion in the previous year’s fourth quarter. Income from continuing operations for the quarter was $3.8 billion, a decrease of 7.7 percent from $4.1 billion in the fourth quarter last year. The retailer paid $255 million to settle 63 class action wage and hour lawsuits.
Wal-Mart’s earnings for the full year rose 5.3 percent to $13.4 billion, or $3.39 a diluted share, on a 7.2 percent increase in revenues to $405.6 billion.
Looking forward, the company projected earnings of 72 to 77 cents a share for the first quarter and $3.45 to $3.60 for the current fiscal year.
“Wal-Mart is a clear out-performer in a challenging economy, benefiting not just from its price-value leadership, but also its upgraded soft-goods strategy that has infused the store with more compelling branded apparel names such as Norma Kamali, Ocean Pacific (Op), L.E.I., Danskin and Starter,” said Todd Slater, a retail, apparel and footwear analyst at Lazard Capital Markets.
Bill Dreher, a retail analyst at Deutsche Bank, said Wal-Mart will be a beneficiary of brands migrating out of department stores. “Right now the company is laying the groundwork for the improvement of the economy [when it will] be able to focus on greater merchandise clarity, more intuitive store planagrams as well as price leadership and cost reduction. Clearly, the apparel and home and other discretionary categories are being structured correctly. Dottie [Mattison, senior vice president over women’s apparel, jewelry, shoes and accessories as well as product development,] seems to be doing a great job of transitioning that department out of Arkansas and into New York. They will be able to transition the consumer to move across the aisle” when the economy improves.
Breaking News: @louisvuitton's men's artistic director @mrkimjones is leaving the French fashion house after nearly 7 years. Jones joined Louis Vuitton in 2011, following a three year tenure as creative director of British luxury goods brand Alfred Dunhill. Jones is to exit Louis Vuitton after showing his fall 2018 collection for the brand in Paris on Thursday. Read the full exclusive story on WWD.com. Link in bio. #wwdnews #wwdfashion
For men’s fall 2018, @giuseppezanotti drew on elements from streetwear, sport, biker, combat and rock ‘n’ roll. Pictured here are a pair of shoes from the collection, featuring zippers, rhinestones, and silver hardware. Head to WWD.com to see a roundup of the accessories from Milan’s men’s fall 2018 shows. #wwdfashion (📷: Andrea Delb)
To celebrate the 25th anniversary of @ralphlauren’s snowboarding collection, the brand is mining its archives. The iconic brand is reintroducing vintage styles and dropping new designs for a color capsule that will be available in Ralph Lauren stores and @openingceremony on January 25. The capsule will consist of 10 pieces, including the Snow Beach Pullover, pictured here, which is a collector’s item that rapper Raekwon wore in Wu-Tang Clan’s “Can It Be All So Simple” video. #wwdfashion (📷: Tom Gould)
For @rochasofficial’s pre-fall 2018 collection, creative director Alessandro Dell’Acqua channeled the sophisticated and intriguing Catherine Denevue in the film “Belle de Jour.” Polished collarless coats, midi skirts, suits and ’60s graphic motifs were all featured in the collection, adding a sense of discreet luxury. See the rest of the photos on WWD.com #wwdfashion
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Only three months after her stellar debut catwalk season, @kaiagerber has inked her first big design collaboration –– with @karllagerfeld. The collection blends Lagerfeld’s Parisian chic aesthetic and the model’s signature West Coast casual style via RTW, accessories, footwear and more. The #KarlLagerfeldxKaia collection will launch in September with a series of events. Get all the details on WWD.com. #wwdnews #wwdfashion
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews