Discount retailer Wal-Mart Stores Inc yesterday (13 May) posted a 6.9% rise in first quarter profit as low-priced deals lured cash-strapped shoppers into its stores, but issued a cautious second quarter outlook.

For the three months to 30 April 2008, net income rose to $3.022bn or $0.76 per share, from $2.826bn or $0.68 per share in the same period last year.

Net sales were up by 10.2% to $94.1bn from $85.4bn, with 22% international growth outpacing both the Wal-Mart Stores and Sam's Club divisions which were up 6.6% and 7.6% respectively.

Total comparable store sales for the US, excluding fuel, were up 2.9%.

Wal-Mart said its UK supermarket chain Asda was also ahead of plan, with first quarter like-for-like sales up 6.4% on an increase in customer traffic driven by lower prices and strong seasonal events.

Total sales increased in the "high single digits" for the period to 31 March, Asda said.  

"We're off to a solid start, with record first quarter sales and earnings," said Lee Scott, president and chief executive officer.
"Our customers appreciate that Wal-Mart is the consistent price leader."

However, the world's largest retailer expects a flat to 2% rise in its US same-store sales in the second quarter and earnings per share of between $0.78 and $0.81.

Although Wal-Mart didn't release figures for its apparel sales, the retailer is revamping its apparel unit to make sure its styles are more in tune with its shoppers and enhance speed to market.

It is adding exclusive brands such as Iconix Brand Group's Ocean Pacific and OP lines, and Jones Apparel Group's l.e.i. teen clothing range.