Wal-Mart Profit Down for First Time Since 1970

Wal-Mart Stores on Tuesday posted its first drop in profit since becoming a publicly traded company in 1970, but the nation’s biggest retailer joined others in predicting a rebound this spring.

Wal-Mart and two other large retailers, Limited and May Department Stores, all posted lower profits for the fourth quarter after cutthroat pricing and sluggish consumer spending clobbered results during the holiday season.

Bentonville, Ark.-based Wal-Mart said earnings fell 9% to $942 million, or 41 cents a share, in the quarter ended Jan. 31. It earned $1.03 billion, or 45 cents, a year earlier.

Limited, a Columbus, Ohio-based clothing retailer, said its profit fell to $216.2 million, or 60 cents a share, from $256.8 million, or 72 cents, last year.

St. Louis-based May, parent of Lord & Taylor, Hecht’s and Robinsons-May department stores, reported earnings of $362 million, or $1.36 a share, down from $401 million, or $1.51, last year.

Wal-Mart warned last month that its earnings would fall, its first decline after 99 consecutive quarters of gains. The downturn capped a year of upheaval for the entire industry in which many players filed for bankruptcy or closed stores.

“Wal-Mart had a disappointing quarter and full year, but it survived” the price wars with troubled discounters such as Kmart during the holidays, said Bernard Sosnick of Oppenheimer & Co.

Wal-Mart and other chains said they are more upbeat about the spring because sales have already picked up with the help of springlike weather, cost cutting and inventory reductions.

“We believe we are making the right adjustments and expect to report increased sales and profit for the first quarter and return to our targeted levels of earnings growth for the fiscal year,” Wal-Mart Chief Executive David Glass said.

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WellPoint Health Networks shares closed at $33.125, down 25 cents, after the managed-care company reported that fourth-quarter income from operations fell 8%. Woodland Hills-based WellPoint said its quarterly profit was reduced by $34.5 million, primarily due to costs associated with the company’s abandoned plan to merge with rival Health Systems International.

Net income, including the merger proposal costs, was $13.3 million, or 13 cents a share, compared with $52 million, or 52 cents, a year earlier.