Wal-Mart profit is flat, but it boosts outlook

NEW YORK -- Wal-Mart Stores on Thursday reported second-quarter income virtually unchanged from a year ago, but results beat Wall Street expectations.

The world's largest retailer also raised the low end of its profit outlook as it benefits from cost-cutting and draws frugal shoppers from rivals.

But Wal-Mart officials cautioned the economy will remain difficult, forcing shoppers to keep buying less-expensive store-label products and smaller pack sizes. And they don't expect the holiday season to be dramatically better than last year.

"Overall, our customers are more disciplined in their spending," Mike Duke, Wal-Mart's president and chief executive, told investors during a pre-recorded call Thursday. "There's a new normal" of saving more and spending less, he said.

As for the holidays, Chief Financial Officer Tom Schoewe told reporters during a conference call he's "hopeful that it will be better than last year."

"Last year was a very, very unusual time," he said.

Analysts surveyed by Thomson Reuters projected earnings of 85 cents on revenue of $102.9 billion.

Wal-Mart shares rose in premarket trading, after closing at $50.51 Wednesday.

But same-store sales, or sales at stores open at least a year, slipped 1.2% in the quarter. That figure provides the first glimpse of a key sales measurement, because Wal-Mart stopped reporting sales monthly after announcing its April results.

"In a sales environment more difficult than we expected, we managed our operations in a disciplined manner," Mike Duke, president and chief executive, said. "Our U.S. segments delivered strong inventory performance, which contributed to the company's healthy increase in year-over-year earnings. We are accelerating our focus on reducing our expenses."