Wal-Mart’s Profit Soars 30%; May, Mercantile Also Post Gains

Wal-Mart Stores Inc. said Tuesday that its earnings jumped a better-than-expected 30% in the fiscal second quarter, its best percentage gain in eight years, amid a strong U.S. economy.

Other retailers also posted strong earnings, a day after May Department Stores Co. and Mercantile Stores Co. kicked off the reporting period for most retailers with reports of solid profit gains.

Wal-Mart, the world’s largest retailer, earned $1.03 billion, or 46 cents a diluted share, in the period, up from $795 million, or 35 cents, a year ago. Revenue grew 18% to $33.5 billion, as sales at stores open at least a year jumped 9.5%. The discount retailer also benefited from healthy sales gains in its stores outside the United States, which propelled profit in its international operations more than fivefold.

Analysts said the continued strong U.S. economy, solid consumer demand and high consumer confidence should help most retailers report strong earnings.

David Glass, president and chief executive of the Bentonville, Ark.-based retailer, cautioned in a statement of the need to “temper our enthusiasm” for the second half of the year because of the strong comparisons the company would face.

Glass, however, said he believed the company’s results for the third quarter would be in line with or slightly better than current analysts’ estimates.

Wal-Mart shares rose 94 cents to close at $64 on the New York Stock Exchange.

At a Glance

Other earnings, excluding one-time gains and charges unless noted:

* Abercrombie & Fitch Co. said its fiscal second-quarter profit rose more than fivefold to $10.6 million, or 20 cents a diluted share, easily beating estimates of 12 cents, as the casual apparel retailer’s revenue soared 70% to $147.1 million. Sales at stores open at least a year climbed 45%.

* Dollar General Corp. reported a 25% jump in fiscal second-quarter earnings to $33.3 million, or 19 cents a diluted share, matching estimates, on a 24% sales gain to $741.4 million. The discount retailer’s sales at stores open at least a year rose 9.2%.

* OfficeMax Inc.’s fiscal second-quarter earnings rose 7.1%, to $2.63 million, or 2 cents a diluted share, matching estimates, as gains in furniture and office-supply sales offset a slump in personal computer sales. Revenue rose 13% to $874.5 million. Sales at stores open at least a year fell 1%. Excluding computers, they rose 6%.

Bloomberg News and Reuters were used in compiling this report.