* International operations Q1 underlying sales up 9.1 pct
* International Q1 underlying operating profit up 7.8 pct
* Says outperforming in almost every foreign country
* "Stand out" quarter from Asda in Britain
(Adds Asda CFO comments, more details)
By Mark Potter and James Davey
LONDON, May 14 Wal-Mart Stores Inc (WMT.N)
posted a 7.8 percent rise in first-quarter operating profit at
its international businesses at constant exchange rates, helped
by a "stand out" contribution from Asda in Britain.
The world's biggest retailer, which serves over 100 million
shoppers a year from over 7,900 stores in 16 countries, said on
Thursday underlying international operating profit was $1.13
billion in the three months ended April 30.
International sales at constant exchange rates were up 9.1
percent at $26.1 billion, helped also by strong contributions
from Brazil, Mexico and store growth in China.
"In almost every country we grew the top line faster than
the market despite the strong dollar and a recession that is
even deeper in some countries than it is in the United States,"
said Chief Executive Mike Duke.
Including the impact of the stronger dollar, international
operating income fell 16.2 percent to $880 million on an 11.1
percent drop in sales to $21.3 billion.
Wal-Mart, which employs more than 2 million people and makes
just under a quarter of its sales outside the United States,
said group earnings per share were broadly flat at 77 cents in
the first quarter, in line with forecasts. [ID:nN14463262]
In the fourth quarter, international operating income rose
5.1 percent on sales up 9 percent at constant exchange rates.
Gross profit margins at the international business fell in
the first quarter compared with the same period last year, due
largely to the closure of six Sam's Clubs stores in Canada and
price cuts in Brazil and Japan.
Doug McMillon, chief executive of Wal-Mart International,
also said the foreign businesses needed to improve their stock
Like-for-like sales at Asda, Britain's second-biggest
grocer, accelerated for the fifth consecutive quarter to 8.4
percent, excluding fuel, for the three months ended March, up
from 7.2 percent in the last quarter of 2008.
That topped a 3.4 percent rise in underlying sales from
market leader Tesco (TSCO.L) for the first six weeks of its new
financial year, and a 6.2 percent increase from J Sainsbury
(SBRY.L), Britain's third-largest grocer, for the 11 weeks to
March 21. [ID:nLL127432] [ID:nLO249608]
Asda beat both its sales and profit targets for the quarter
and grew profit ahead of, and costs below, sales.
Asda Chief Financial Officer Judith McKenna also told
reporters the chain had "one of our strongest Easter trading
periods for some time" in April, helped by demand for its budget
Smart Price range, as well as strong sales of George clothing
and in home shopping.
McKenna said sales growth might temper in the coming months
as food price inflation eases, but noted sales volumes had been
increasing at Asda in recent quarters.
In Mexico, same-store sales at Walmex rose 3.3 percent on a
comparable week basis.
Wal-Mart said the outbreak of Swine Flu in April, which was
centred on Mexico, did have an impact and would be shown in
In Brazil, sales rose 12.6 percent, driven by discount, cash
and carry formats and new stores. Comparable store sales were
slightly negative, due to the timing of Easter.
In China, comparable store sales were down 1.8 percent at
Wal-Mart China and down 5.8 percent at Trust-Mart.
(Editing by Dan Lalor and Rupert Winchester)