NEW YORK (CNN/Money) -
Wal-Mart Stores Inc. reported a fourth-quarter profit Thursday that rose from a year earlier and matched Wall Street forecasts, and said it expects future results at or above current estimates.
The world's largest retailer earned $2.7 billion, or 63 cents a share, from continuing operations in its fiscal fourth-quarter ended Jan. 31, up from $2.5 billion, or 57 cents a share, a year earlier. This matched the forecast of analysts surveyed by earnings tracker First Call.
The company said earnings per share were reduced by 3 cents due to a change in German tax law during the period. Wal-Mart (WMT: Research, Estimates) earlier this month lowered its profit guidance to the low end of its range of between 63 cents to 65 cents a share.
Revenue rose 12.2 percent to $74.5 billion for the quarter and increased 11.6 percent to $256.3 billion for full year.
The company said it expects first-quarter earnings of 48 to 50 cents a share, and full-year results of $2.34 to $2.38 a share. First Call's first-quarter forecast is for earnings per share of 48 cents, up from 42 cents a year ago, with a range of 45 to 49 cents.
First Call's full-year consensus forecast is $2.32 a share, up from $2.03 in the year just ended, with a range of $2.22 to $2.38 per share.
Total comparable sales for the quarter increased 4.8 percent, including a 4.4 percent comparable rise for Wal-Mart Stores and 6.7 percent comparable increase for the Sam's Club division.
Separately, total comparable sales for the twelve-month period were up 4.1 percent.
In his pre-recorded earnings statement for investors and analysts, CEO Lee Scott said strong January sales helped drive the results for entire quarter. "Apparel markdowns for full year were also less than the previous year. Clearly, we are better prepared for the spring season," Scott said.
"Our gross margins were also better than forecasts not because we were raising our prices but because of the merchandising mix in our stores," said Scott. "Let me state very clearly that we are not raising our prices and have no intention of doing do so in the future."
Scott said he expects consumer spending will be driven by higher tax returns and an improving economy this year.
"The fact that a conservative CEO like Scott is bullish about the company's first-quarter forecast is definitely an encouraging sign," said Patrick McKeever, analyst with SunTrust Robinson Humphrey. "Wal-Mart doesn't typically guide above Wall Street's forecasts.. In that sense, today's report is one of the more encouraging ones we've had in a while from the retailer."
Added McKeever, "Wal-Mart already said that February sales are tracking at the high-end of its forecasts for the month. We're pretty bullish about the first-quarter for them. And while Wal-Mart says it isn't raising prices, at the same time we think the retailer won't be as aggressive lowering prices either. That should help gross margins going forward."
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