New York City Wal-Mart Stores Inc. posted a 17% increase in its second-quarter profit Thursday, helped by cost cuts and a renewed focus on low prices to lure penny-pinching consumers.
However, Wal-Mart predicted slower sales growth at its established stores for the current quarter, saying it is seeing some volatility as customers find it difficult to stretch their paycheck to the next payday.
Wal-Mart said it earned $3.45 billion in the quarter ended July 31, up from $2.95 billion a year earlier.
Profit from continuing operations came to $3.39 billion, up 9.3% from $3.09 billion last year. Net sales rose 10% to $101.6 billion in the second quarter from $92 billion in the year-ago period.
For the quarter, Wal-Mart posted a solid same-store sales gain of 4.5%, compared to a 1.9% increase a year earlier. The results exclude fuel sales.
"We have improved customer traffic and ticket and overall sales growth in our markets," president and CEO Lee Scott said in a statement. "While inflation and higher fuel costs are pressuring suppliers, retailers and customers worldwide, we're confident that Wal-Mart is well-positioned for this economy."
The company said second-quarter sales were driven by the international business, which is seeing more customers as U.S. economic woes spread to other areas of the world. Its international sales rose 19.3% to $25.3 billion, helped by such countries as Canada, China, and Brazil.
At Wal-Mart's U.S. stores, sales rose almost 8% to $64.1 billion, while the Sam's Club warehouse store division posted a 7.8% sales gain to $12.28 billion.