reported stronger-than-expected same-store sales for January, but cautioned that a change in German tax law may offset any boost in per-share earnings due to the strong sales.
The Bentonville, Ark.-based discount retailer said January same-store sales rose 5.7%, above Briefing.com's consensus estimate of 4%. Sales rose 5.3% at Wal-Marts and 7.9% at Sam's Club stores. Total sales for January were $18.4 billion. International sales rose 19.5% to $3.79 billion.
"With January sales exceeding our expectations, we would have expected earnings per share around the high end of our previous guidance of $0.63 to $0.65 per share," the company said in its sales report. "However, our fourth quarter results will likely be influenced by a tax law change enacted by the German government that became effective in January 2004. This change has prompted a re-evaluation of the recoverability of the deferred tax asset related to our cumulative operating losses in Germany." Wal-Mart said it is still evaluating the matter, but it could result in earnings of about 63 cents a share for the quarter -- at the low end of guidance.
Wal-Mart shares rose 38 cents Tuesday to $55.39.