WAL-MART QUARTER NET OFF, A FIRST SINCE 1970

ELLIOT ZWIEBACH

BENTONVILLE, Ark. -- Wal-Mart Stores here reported lower earnings for the fourth quarter ended Jan. 31 -- its first down quarter since 1970, when the company went public. Although sales and earnings reached record levels for the year, net income for the fourth quarter fell 9% to $942 million, or 41 cents per share, vs. $1.03 billion, or 45 cents per share, a year ago. The company attributed the decline to "the difficult economic environment."

Net income for the year rose 2% to $2.7 billion, or $1.19 per share. Sales rose 13% for the year to $93.6 billion, and 13% for the quarter to $27.6 billion.

Wal-Mart's 239 supercenters accounted for sales of about $13.5 billion, according to industry estimates. Nick White, executive vice president of supercenters, said in a speech that in 1997 and 1998 the company plans to open more supercenters of 136,000 square feet instead of 188,000-square-foot

and 167,000-square-foot units, which make up the bulk of its supercenters. Wal-Mart already operates 25 stores of 136,000 square feet and plans to focus on more stores of that size "because it gives us flexibility for store placement, and we're happy with what we've seen so far," White said in a speech at the annual meeting of the Atlanta-based Refrigerated Foods Association in Rancho Mirage, Calif.

Ed Comeau, a securities analyst with Donaldson Lufkin & Jenrette, New York, told SN that Wal-Mart slowed the pace of supercenter expansion last year, opening 92 units instead of the 105 to 110 stores originally projected. One problem for Wal-Mart as it has expanded beyond just discount stores, he said, "is the fact the businesses and formats it's opening have lower returns than discount stores, so the company isn't generating the same types of high returns."