Wal-Mart said fourth-quarter profit would have been higher if not for unfavorable exchange rates. The world's biggest retailer still beat expectations with $3.8 billion in quarterly earnings, or 96 cents a share, compared with $4.1 billion, or $1.02 a share, the year before. The company expects a negative impact this year as well if the dollar remains at the same level it was at the end of fiscal 2009.
Currency Impact on Sales
The company said international sales declined 8.4% in the fourth quarter and rose 9.1% for the full year. "Reported International sales were negatively affected by the lower value of currencies versus the U.S. dollar. On a constant currency basis (assuming currency exchange rates remained the same as the prior year), International sales increased 9.0% in the fourth quarter and 11.6% for the full fiscal year."
Currency Impact on Profit
The company said operating profit from international business fell 14.3% in the quarter and rose 4.6% for the year. "Reported International operating income also was negatively affected by the lower value of currencies versus the U.S. dollar. On a constant currency basis (assuming currency exchange rates remained the same as the prior year), International operating income increased 5.1% in the fourth quarter and 10.2% for the full fiscal year."
Currency Impact on Outlook
The company said it expected earnings per share of between $0.72 and $0.77 for the first quarter of fiscal year 2010 and between $3.45 and $3.60 for the full year. "Our guidance reflects the strength of our underlying business and global economic conditions," said Tom Schoewe, Wal-Mart Stores, Inc. executive vice president and chief financial officer. "It assumes that currency exchange rates will remain relatively the same as they were at the end of our 2009 fiscal year, which would have a negative impact on our year-over-year comparison of fiscal 2010 EPS of approximately 13 cents per share."