BENTONVILLE, Ark. — Charges associated with settling various labor lawsuits, along with an unfavorable currency exchange rate, contributed to net earnings falling 7.4% during the fiscal fourth quarter for Wal-Mart Stores, the retailer here said Tuesday.
The company, however, cited progress against competitors — particularly in grocery sales — in its U.S. stores.
For the quarter, which ended Jan. 31, Wal-Mart reported profits of $3.8 billion on sales of $109.1 billion. Quarterly sales improved by 1.7%, with Wal-Mart’s U.S. division reporting $71.5 billion in sales, a 6% increase from the same period last year, and U.S. comps of 2.8%, excluding fuel.
For the fiscal year, Wal-Mart’s U.S. sales improved 6.8% to $255.7 billion, with total comps excluding fuel up by 1.4%. Officials in a conference call said that legal settlements reached over the last year totaling $251 million impacted fiscal-year earnings by about 6.4 cents per share. Wal-Mart in December said it had settled 63 wage-and-hour lawsuits.
Eduardo Castro-Wright, the newly named president of Wal-Mart’s U.S. division, in a conference call said the retailer had made improvements in labor scheduling expected to offset increases in wages for its workers. He also highlighted improvements in store service, including faster checkouts that have improved customer satisfaction scores.
In grocery, “we continue to increase the price gaps between our competitors and Wal-Mart in food and consumables, and have done so while protecting gross profit margins,” Castro-Wright said. He added that the chain has benefited from a trend toward consumers eating more at home — noting that the trend was also evident in sales of cooking and dining-related products.
Wal-Mart’s Sam’s Club warehouse division showed quarterly comps of 2.5% excluding fuel while total sales of $11.8 billion remained flat.
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