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Discounters’ first-quarter earnings rise

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From the Associated Press

Discounters Wal-Mart and TJX reported solid first-quarter earnings Tuesday, suggesting that more Americans were hunting for bargains as they struggled to cover their monthly credit card payments, put food on the table and gas in the family car.

Wal-Mart Stores Inc., the world’s largest retailer, posted a 6.9% rise in first-quarter profit.

The results beat Wall Street’s projections by a penny, but the company issued a cautious outlook for the current quarter and warned that the economy would be a “critical factor” in 2008.

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TJX Cos., which operates stores under the T.J. Maxx, Marshalls and HomeGoods names, said its first-quarter profit rose almost 20%, meeting analysts’ projections.

Wal-Mart shares fell $1.37, or 2.4%, to $56.65. TJX shares slipped $1.49, or 4.6%, to $30.65.

Bentonville, Ark.-based Wal-Mart said it earned $3.02 billion, or 76 cents a share, in the three months ended April 30, up from $2.83 billion, or 68 cents, a year earlier.

Analysts polled by Thomson Financial had projected earnings of 75 cents a share.

The company had overall revenue of $95.3 billion, up 10.3% from $86.4 billion in the prior year.

Wal-Mart Chief Financial Officer Tom Schoewe said the company expected second-quarter sales in stores open at least a year to be up no more than 2%. He said the company expected to earn between 78 cents and 81 cents a share versus analysts’ projections of 81 cents.

Framingham, Mass.-based TJX, operator of 2,595 stores, said its net income in the three months ended April 26 climbed to $193.8 million, or 43 cents a share, compared with profit of $162.1 million, or 34 cents, a year earlier.

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A $12-million charge from a massive data breach hurt TJX’s profit a year ago. A $12-million benefit due to several tax-related adjustments helped this year’s first-quarter profit.

Not counting that benefit, TJX’s profit in the latest period was 41 cents a share, matching analysts’ estimates.

TJX’s revenue increased 6% in the latest period to $4.36 billion, just shy of analysts’ forecast of $4.39 billion. Same-store sales rose 3%.

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