Wal-Mart Stores Inc. Tuesday posted higher quarterly profit as an aggressive holiday advertising campaign drove demand for laptop computers and gift cards in the biggest shopping period of the year.
The world’s biggest retailer also said it expected earnings for the new fiscal year to range from $2.88 to $2.95 per share. That was below analysts’ expectations for $2.99, according to Reuters Estimates.
Net income rose to $3.6 billion, or 86 cents per share, in the fourth quarter ended Jan. 31, from $3.2 billion, or 75 cents per share, a year earlier.
Excluding a tax benefit, earnings were 84 cents per share. Analysts on average expected the discount retailer to earn 83 cents, according to Reuters Estimates. Wal-Mart said in January that profit would probably be near the low end of its forecast for 82 cents to 86 cents.
Net sales rose 8.6 percent to $89.3 billion.
Wal-Mart has been grappling with rising costs, particularly for energy and health care. At the same time, sales growth has slowed somewhat as its low-income customers cope with steeper gasoline and home heating bills.
The Bentonville, Arkansas-based company launched its holiday advertising campaign on Nov. 1, two weeks earlier than normal, and offered early-bird specials that included a laptop computer for less than $400.
The promotions drove strong November sales, but December results were disappointing, partly because of demand for gift cards, which count toward revenue only when they are redeemed. As a result, January sales were stronger than expected.
The U.S. Wal-Mart Stores division, the retailer’s largest unit, posted quarterly sales growth of 8.6 percent. Operating profit rose 11.1 percent.
At Sam’s Club, sales were up 6.8 percent and operating profit rose 6.2 percent.
In the international division, where Wal-Mart has been struggling with disappointing results in its British Asda stores, sales were up 9.6 percent, while operating profit increased 14.1 percent.
Wal-Mart’s shares have dropped about 12 percent in the past year, while rival Target Corp.’s have risen 8 percent.
