Wal-Mart, other retailers exceed analyst estimates of profit gains
Led by discounter Wal-Mart Stores Inc., whose fiscal fourth-quarter net income climbed 16%, several retailers reported earnings that beat analysts' estimates, giving the stock market hope that stores are poised for a strong 1997.</br></br>While Wal-Mart's earnings reflect a solid sales gain and tighter cost controls, Limited Inc. and its 83%-owned Intimate Brands Inc. unit said growth in their specialty, nonapparel chains helped results. Dillard Department Stores Inc.'s results were less impressive, but it said it intends to buy back up to $300 million of its Class A shares.</br></br>"Despite a somewhat weaker-than-anticipated Christmas, retailers were able to maintain control over inventory and expenses and that resulted in better-than-anticipated numbers," said Jeffrey Feiner, retail analyst at Salomon Brothers Inc.</br></br>The reports lifted the retailers' stocks yesterday, with Wal-Mart climbing 7.1%, or $1.75, to close at $26.375 and Dillard gaining 5.8%, or $1.625, to close at $29.75 in New York Stock Exchange composite trading. Limited rose 50 cents, closing at $18.50, while Intimate Brands closed unchanged at $18.875.</br></br>For the quarter ended Jan. 31, Wal-Mart said it had net income of $1.1 billion, or 48 cents a share, up from $942 million, or 41 cents a share, a year before. A 19% increase in operating earnings at its Sam's Club unit, as well as profit in the international division and continued healthy returns at the combined food-and-general merchandise supercenters, all contributed to the gain, the company said.