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Wal-Mart, the world’s largest retailer, beat expectations after its US discount stores accounted for about 50 per cent of all US retail growth during 2008-while its full-year global sales passed $400bn for the first time, and profits hit $13.4bn.Mike Duke, who took over as chief executive three weeks ago, said the fourth quarter and full-year results showed that Wal-Mart had gained “momentum” during the year in all of its markets, despite the tough economic environment. “We are doing all the right things to continue our momentum and to widen the gap between the competition and us. We finished January strong, and February is off to a good start.”The results again underlined the retailer’s ability to generate cash in a recession, and to use the money to invest in its business at a time when most of its rivals are cutting back. Reduced capital spending on new stores in the US last year, operational improvements and inventory management left the retailer with free cash flow of $11.6bn at the end of January, more than double the $5.7bn of a year ago.Wal-Mart has also been able to make acquisitions, concluding a $2.6bn deal in January for a controlling share of D&S, the largest retailer in Chile. It is also continuing to invest in its stores, with a major remodelling programme, called “Project Impact”, now under way at its US stores, which it expects to significantly boost the sales per square foot of its more than 3,000 supercenters and discount stores.The retailer also said on Tuesday that it will resume its share repurchase programme-which it suspended as the financial crisis broke-with about $5bn remaining under its current $15bn repurchase authorisation.In the US, the total net sales at Wal-Mart USA rose 6 per cent on the last quarter to $71.5bn, although higher than expected expenses, including healthcare costs, led to its operating income growing slower than sales, up 2.2 per cent to $5.4bn.Internationally, the strong dollar weighed on earnings, with the value of sales down 8.4 per cent from the last quarter to $24.7bn and operating income down 14.3 per cent at $1.5bn.At constant currencies, however, international operating income would have been up 5.1 per cent and net sales up 9 per cent.Wal-Mart’s worldwide fourth quarter profit fell to $3.79bn, or 96 cents per share, on a 1.7 per cent increase in sales to $108bn.By Jonathan Birchall in New York
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