Wal-Mart builds profit pace as US sales

Wal-Mart on Tuesday reported solidly higher profit for its fiscal second quarter Tuesday as US sales rebounded and international demand surged. Wal-Mart, the world's biggest retailer, said net income was $3.8 billion for the three months ending July 31, a rise of 5.7 percent from the 2010 second quarter. The earnings marked an acceleration in profits from the 3.0 percent rise in the first quarter for the discount retailer. The company said earnings were $1.09 per share excluding special items, a penny higher than estimated by analysts. "I'm encouraged by the sales improvement in our Walmart US stores," Wal-Mart chief executive Mike Duke said in a statement. Duke said comp sales -- sales in stores open at least a year -- increased every month in the quarter. "This was the best quarterly performance since the third quarter of fiscal 2010," Duke said. Wal-Mart, which has been battling a slump in its domestic market amid a struggling economy, is "committed to deliver positive comp sales by widening the gap on price," he said. Continued strength in international sales led a 5.4 percent rise in net income, to $109.37 billion. International sales for the company's main Walmart discount chain leaped more than 16 percent in the quarter, to $30.1 billion. "I'm pleased that we've made so much progress on integrating the acquisitions of the Netto stores in the UK and Massmart in sub-Saharan Africa," Duke said. "We look forward to the many opportunities we have in Africa to create jobs and help customers save money and live better." But Walmart sales in the United States, its huge domestic market, rose only a modest 0.4 percent, weighed down by a 0.9 percent drop in same-store sales amid sluggish economic growth, high unemployment and rising recession fears. For the fiscal third quarter, Walmart US forecast comp sales ranging from negative one percent to positive one percent. "We remain concerned about the economic pressure on our customers and the uncertain impact it can have on their shopping behavior," said Bill Simon, Walmart US president and chief executive. The Bentonville, Arkansas-based company raised its profit forecast for the 2012 fiscal year to between $4.41 and $4.51 earnings per share, in line with expectations and following last year's EPS of $4.18. "This reflects our confidence in the business for the back half of the year," said chief financial officer Charles Holley.