Wal-Mart Earnings Flat For First Quarter

Wal-Mart Stores Inc. reported a flat first-quarter profit on Thursday as revenue from its huge international operations was hurt by the stronger dollar.

The world's largest retailer earned $3.02 billion, or 77 cents per share, for the period ended April 30. That was flat from a year earlier. Revenue fell 0.6 percent to $93.47 billion, from $94.04 billion a year earlier.

The results met the expectations of analysts surveyed by Thomson Reuters, who projected 77 cents per share on revenues of $96.37 billion.

Wal-Mart said earnings were hurt by 4 cents per share because of currency exchange rates. Without that impact, the company said sales would have risen 4.5 percent to $98.31 billion. Accenting the company's exposure to currency fluctuations, nearly a quarter of Wal-Mart's sales for the quarter - 22.7 percent - came from its international division.

The stronger dollar has been hurting many companies that have large overseas businesses. Most U.S. companies that sell goods internationally convert sales from other currencies into dollars when they report their financial results. If the dollar strengthens relative to those currencies, the international revenue translates into fewer dollars.

Still, Wal-Mart has been one of the few bright spots in retailing, performing better than competitors like Target Corp. and Costco Wholesale Corp. as it has found the right mix of merchandise and marketing to enhance its renewed focus on price. Kohl's announced Thursday that its first-quarter profits fell 11 percent and that same-store sales dropped.

Wal-Mart is also benefiting as shoppers concentrate on necessities like groceries. As part of its effort to draw cost-conscious shoppers, the company relaunched its Great Value line of store-label groceries in March.

In a pre-market analysis, William Blair & Co. analyst Mark Miller said that Wal-Mart is picking up market share as shoppers continue to try to stretch their dollars.

Last week, Wal-Mart reported that same-store sales rose 5 percent in April, surpassing the 2.9 percent gain expected by Wall Street. The figure excludes fuel sales. In comparison, Target had a slim 0.3 percent gain. Same-store sales are sales at stores open at least a year and are considered a key indicator of a retailer's health.

Yet Wal-Mart, like many discounters, faces a challenging second quarter compared with the same period a year ago. Last year, people were receiving their government stimulus checks. While shoppers used a big chunk of the money to pay down debt last year, they used the rest to purchase necessities.