Wal-Mart gives cautious view, citing macro worries

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 Feb. 21, 2013, 8:13 a.m. EST 

 http://www.marketwatch.com/story/wal-mart-gives-cautious-view-citing-macro-worries-2013-02-21?siteid=bigcharts&dist=bigcharts

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By Andria Cheng, MarketWatch

NEW YORK (MarketWatch) — Wal-Mart Stores Inc. on Thursday reported a better-than-expected fiscal-fourth-quarter profit, but gave an outlook that fell short of Wall Street expectations, with the retailer citing higher payroll taxes and other “current economic factors” affecting customers in many of its markets.

The company WMT +2.75%  said February sales started slower than planned at Walmart U.S. due in large part to the delay in income tax refunds. As the refund check increased late last week, it’s seeing a more normalized sales pattern, Bill Simon, head of Walmart U.S. said.

At Sam’s Club, demand was also hurt by “higher payroll income taxes, ongoing unemployment and higher gas prices,” the company said.

Reuters

Profit in the quarter ended Jan. 31 rose to $5.6 billion, or $1.67 a share, from $5.19 billion, or $1.50 a share, a year earlier.

Sales rose 3.9% to $127.1 billion while membership and other income declined 7.8% to $815 million. Analysts polled by FactSet expected profit of $1.57 a share on sales of $127.83 billion.

For the first quarter, Wal-Mart projected profit of $1.11 to $1.16 a share, and $5.20 to $5.40 a share for the year. Wall Street was looking for profit of $1.18 a share in the first quarter and $5.38 a share for the year, according to FactSet.

The Bentonville, Ark.-based retailer also said it’s raising its annual dividend by 18% to $1.88 a share. The company’s shares inched up 0.4% in premarket trading. Wal-Mart shares so far this year were up 1.4%, trailed the performance of the S&P, the Dow and its rivals including Target Corp. TGT +1.82%   and Costco Wholesale Corp. COST -0.06%  amid concerns that the higher payroll taxes and gasoline prices could hurt its bread and butter, low income customers. Read related story on Wall Street jittery heading into Wal-Mart results.

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At Walmart U.S., the company’s biggest division, fourth-quarter sales rose 2.6% to $74.7 billion. Comparable sales rose 1%, at the low end of the company’s guidance range and missing analysts’ average estimate of a 1.5% gain in a Thomson Reuters poll. The company said traffic declined slightly and it gained market share.

“We are confident that our low prices will continue to resonate, as families adjust to a reduced paycheck and increased gas prices,” said Simon. “We see the underlying health of the Walmart U.S. business is sound, and sales trends are similar to what we’ve demonstrated in the last few quarters.”

At Sam’s Club, sales rose 3.4% to $14.5 billion, with comparable sales excluding fuel impact up 2.3%, missing estimates of a 2.4% gain.

Walmart international sales rose 6.9% to $37.9 billion.

Andria Cheng is a MarketWatch reporter based in New York. Follow her on Twitter @AndriaCheng.