NEW YORK — Wal-Mart Stores Inc., one of the recession’s biggest beneficiaries, felt the pinch during the fourth quarter as quarterly sales fell at its namesake U.S. division for the first time in memory.
Still, overseas growth and a concerted cost-cutting campaign pushed profit up 22 percent.
The discounter, which rode low prices to dominate U.S. retailing, faced tough price competition from rivals during the holidays. That contributed to a decline in customer counts and spending.
The company said that a key measure of sales showed its third consecutive quarterly decrease as it continues to grapple with deflation in groceries and electronics and a tough economy.
The company also offered a tepid earnings outlook, sending shares down 90 cents to $53.16 Thursday morning.
The sales weakness at its namesake U.S. division is happening even as the discounter says it continues to benefit from affluent shoppers trading down to its stores, but the results show that keeping these new customers may prove more difficult when the economy rebounds.
Wal-Mart has promised investors that it plans to widen the price gap between itself and rivals as it cuts costs and reinvests those savings to lower prices for shoppers, which in turn drives sales.
Wal-Mart earned $4.63 billion, or $1.21 per share, in the quarter ended Jan. 31. That compares with $3.8 billion, or 96 cents per share, in the same quarter last year.
The company says that total sales rose 4.4 percent to $113.6 billion. However, sales at stores open at least a year fell 1.6 percent. That’s considered an important measure of a retailer’s health.
Analysts surveyed by Thomson Reuters expected a profit of $1.12 per share on revenue of $114.4 billion.
Mike Duke, Wal-Mart’s president and chief executive, said in a statement that he expects continued strong growth from its international business this year but that U.S. sales will be more challenging in the first quarter.
“We remain focused on growing top line sales and expect improvement in the U.S. as the year progresses,” he said.
Wal-Mart’s U.S. division had a 0.5 percent decline in total sales to $70.97 billion in the quarter; Sam’s Club sales increased 3.8 percent to $12.28 billion. The company’s international business enjoyed a 19.5 percent gain to $29.57 billion.
Tom Schoewe, Wal-Mart’s chief financial officer, told journalists in a conference call that he doesn’t remember the last time the U.S. division showed a decline in total sales.
Wal-Mart’s U.S. division dragged down the company’s sales at stores open at least a year. The namesake U.S. division suffered a 2 percent drop in the measurement, while Sam’s Club had a 0.7 percent increase.