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Wal-Mart raises 1Q profit guidance

Wal-Mart Stores Inc., the world's largest retailer, raised its profit forecast for the first quarter, saying costs are being well managed and April sales should top prior expectations.
/ Source: The Associated Press

Wal-Mart Stores Inc., the world's largest retailer, raised its profit forecast for the first quarter, saying costs are being well managed and April sales should top prior expectations.

The Bentonville, Ark.-based company's news contrasted with generally weak sales reports and outlooks from other retailers on Thursday. Wal-Mart Stores and other discounters, while not immune to the economic slowdown, have benefited as consumers faced with high food and energy costs hunt for bargains.

Wal-Mart now expects earnings of 74 cents to 76 cents per share for the three months ending April 30, up from 70 cents to 74 cents per share predicted earlier. Analysts polled by Thomson Financial expect a profit of 72 cents per share.

The company expects April same-store sales, excluding fuel, to rise 1 percent to 3 percent. Previously Wal-Mart said April sales could be flat to up 2 percent.

Tom Schoewe, the chief financial officer, said "inventory in Wal-Mart Stores U.S. has been well managed." As a result, Wal-Mart has reduced the use of markdowns, better leveraged its costs and suffered fewer losses from accounting error, employee theft and shoplifting.

Same-store sales, excluding fuel, rose 0.7 percent in March, slightly below analyst expectations of a 1 percent rise. Same-store sales, or sales in stores open at least one year, rose 0.9 percent at Wal-Mart stores and fell 0.7 percent at Sam's Club stores.

For the five weeks ended April 4, total sales rose 8 percent to $36.97 billion from $34.26 billion last year.

Food and consumables, health and wellness products and entertainment products were the best sellers during the month, Wal-Mart said.

U.S. Wal-Mart stores had triple-digit same-store sales of flat-panel TVs and GPS devices, as well as strong growth rates in laptop computers, video games and digital cameras. Apparel and home products were weaker.

At Sam's Club stores, food and seasonal Easter merchandise were the best sellers.