Bentonville, Ark., Aug. 14, 2008 - Wal-Mart Stores, Inc. today reported its sales and earnings for the quarter ended July 31, 2008. Net sales for the second quarter of fiscal year 2009 were approximately $101.6 billion, an increase of 10.4 percent from $92.0 billion in the second quarter last year.
Income from continuing operations for the second quarter was $3.385 billion, an increase of 9.3 percent from $3.097 billion in the second quarter last year. Diluted earnings per share from continuing operations for the second quarter of fiscal year 2009 increased to $0.86 from the previous year’s second quarter result of $0.75 per share (after reclassifying for discontinued operations, as noted below). The prior year included a net benefit of $0.04 per share from three items: the net impact of a reduction of general liability and workers’ compensation claim accruals, gains from the sale of certain real estate properties, and charges for legal and other contingencies.
Results of Gazeley Limited, an ASDA commercial development subsidiary that was sold in July 2008, have been reclassified for all periods as discontinued operations. The Company anticipates recording a gain from the Gazeley sale in the third quarter. In addition, there was a $63 million benefit to discontinued operations in this second quarter from the successful resolution of a tax contingency related to McLane Company Ltd., a former Wal-Mart subsidiary. The Company also reported a $153 million charge to discontinued operations in the second quarter of fiscal 2008 for a post-closing adjustment from the sale of its German operations in fiscal 2007.
"The combination of solid operating performance and improved capital efficiency gave us record earnings this quarter and nearly $5 billion in free cash flow in the first half of the fiscal year," said Lee Scott, Wal-Mart Stores, Inc. president and chief executive officer. "Our underlying business remains sound as our associates deliver on Wal-Mart’s mission to save people money so they can live better."
Net Sales
Net sales were as follows (dollars in billions):
Price leadership, enhanced customer service and operational improvements remained the primary drivers of sales growth worldwide, and contributed to earnings and free cash flow. Wal-Mart defines free cash flow, a non-GAAP measure, as cash provided by operating activities, less capital expenditures. A reconciliation of free cash flow for the first half of this fiscal year to the most directly comparable GAAP measure for the same period also is available on a Form 8-K furnished today with the Securities and Exchange Commission.
"We have improved customer traffic and ticket and overall sales growth in our markets," Scott added. "While inflation and higher fuel costs are pressuring suppliers, retailers and customers worldwide, we’re confident that Wal-Mart is well-positioned for this economy."