Wal-Mart Reports Happy Holidays, Sales Up 2.4%

Wal-Mart Stores

reported a 2.4 percent rise in December sales at stores open at least a year, beating Wall Street expectations, as customers flocked to its stores for cheap groceries.

"In a difficult retail environment, we were pleased with our comparable store sales during this period," said Eduardo Castro-Wright, head of Wal-Mart's U.S. store division. "Wal-Mart's food performance was very strong, which helped drive traffic to other areas of the stores."

But the world's largest retailer said that while it expects fourth-quarter earnings per share from continuing operations to be within its previous forecast of 99 cents to $1.03 per share, earnings will be pressured by higher interest expense compared with a year ago.

Wal-Mart's 2.4 percent rise in U.S comparable-store sales beat analysts' average forecast for a gain of 2.1 percent, according to Reuters Estimates, and it was within the company's forecast for a gain of 1 percent to 3 percent.

The world's biggest retailer said net sales in the five weeks ended Jan. 4 were $46.6 billion, up from $42.99 billion a year ago.

On a recorded call, it said that at its Wal-Mart stores, sales of grocery and pharmacy merchandise continued to outpace sales of higher margin general merchandise.

The discount retailer said that during the holiday heavy December shopping month, sales were strong in food, flat-panel televisions, digital cameras, and video games, but were "negative" in home and apparel.