Wal-Mart's 1Q net income rises 10 percent

NEW YORK — Wal-Mart Stores Inc.'s first-quarter net income rose 10 percent as the world's largest retailer benefited from cost-cutting and robust growth in its international business.

But Wal-Mart said a key measure of revenue dropped for the fourth consecutive quarter as it continued to see a decline in customer counts at its U.S. namesake stores.

It also offered a muted outlook for the current quarter as shoppers worry about jobs and their finances.

Still, Wal-Mart's shares rose more than 2 percent, or $1.29, to $53.99 because results beat Wall Street expectations.

Wal-Mart said Tuesday net income was $3.32 billion, or 88 cents per share for the period ended April 30. That compares with $3.02 billion, or 77 cents per share in the same quarter last year.

Revenue rose almost 6 percent to $99.85 billion, from $94.24 billion.

Analysts surveyed by Thomson Reuters expected profit of 84 cents per share on revenue of $98.45 billion for the period.

Revenue at stores open at least a year dropped 1.1 percent, dragged down by its U.S. namesake division. The measure is a key indicator of a retailer's health since it excludes the effect of expansion. Wall Street analysts had expected a 0.6 percent decline.

Wal-Mart, which generates more than $400 billion in sales annually, is considered a key barometer of consumer spending. The retailer's latest figures show that its shoppers are still struggling, with clothing sales the most disappointing.

"Our customers, particularly in the United States, are still concerned about their personal finances and unemployment, as well as higher fuel prices," Mike Duke, Wal-Mart's president and CEO, said in a statement.

During a conference call with the media Tuesday, Chief Financial Officer Tom Schoewe said that more than ever its customers are living "paycheck to paycheck." The number of customers on food stamps increased significantly, company officials said. And Schoewe noted sharpest increases it's seen in spending when paychecks or government payments are issued, indicating that people are waiting for those to spend.

Eduardo Castro-Wright, vice chairman of Wal-Mart who overseas its U.S. namesake business said that there was a 2 percentage point difference in revenue at stores with the lowest unemployment rate and the highest unemployment rate.