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Wal-Mart Sluggishly Steps to the Plate

The company's earnings come as the retail giant faces a sales slowdown.

On Tuesday, the market will find out if


(WMT) - Get Walmart Inc. Report

has anything to smile about.

The world's largest retailer, known for its price-slashing smiley face, is scheduled to report its fourth-quarter and full-year earnings, and the results come as the mammoth company struggles with tepid sales growth. Analysts, however, still expect the retailer to eke out earnings gains for the period.

In November, Wal-Mart's same-store sales fell 0.1% -- the first monthly decline in a decade. In the crucial December holiday selling period, same-store sales, or sales at stores open at least a year, inched up 1.6%.

January same-store sales rebounded somewhat, rising 2.2% and topping the company's forecast of 1% to 2% growth, as well as Wall Street's estimate for a 1.8% rise.

Still, Wal-Mart's latest fiscal year is shaping up to have the lowest same-store sales increase in the 27 years the company has reported the statistic,

The Wall Street Journal

noted recently.

Analysts polled by Thomson Financial expect the company to report earnings of 90 cents a share, on revenue of $99.59 billion. The company's own guidance has called for fourth-quarter earnings of 88 cents to 92 cents a share.

A year earlier, Wal-Mart posted fourth-quarter earnings of 86 cents a share on sales of $89.3 billion.

JPMorgan analyst Charles Grom wrote in a research note Friday that he believes fourth-quarter EPS "will be on track as better inventory and labor management come to the rescue."

During the holidays, Wal-Mart slashed prices on popular gift items like flat-screen TVs and toys in an effort to lure shoppers away from big-box rivals like


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. The drastic price cuts raised concerns that Wal-Mart may face margin issues.

C. Britt Beemer, chairman and founder of consumer research firm America's Research Group, says Wal-Mart's fourth-quarter results won't necessarily be burned by the lower prices.

"I think they probably ended up with a pretty good January to offset those numbers on the margin side," he says.

Scott Rothbort, founder of LakeView Asset Management and a contributor to


, says Wal-Mart is a company that "basically lives off thin margins."

"The way they make their money is by squeezing their suppliers very tightly," he says.

Wal-Mart also has been renovating its stores to keep up with trendier rivals like Target , and while Rothbort says it was possible that these costs hurt margins, he also says it's a necessary expenditure.

"The company needs to upgrade its stores tremendously," he says.

JPMorgan's Grom said he expects management to provide updates on the store remodeling during Wal-Mart's conference call, as well as a time frame on the home décor apparel turnaround and international expansion plans.

Rothbort expects very few surprises from Wal-Mart.

"The stock is going nowhere," he says. "It's like a bond. It's going to have slow growth. There's no explosive growth there. It'll wax and wane a little bit with internal issues."