Despite bribery probe, Wal-Mart profit jumps 10.1%
Despite a corruption probe into its Mexican subsidiary, retail giant Wal-Mart Stores Inc. reported first-quarter profits that exceeded Wall Street expectations as more shoppers returned to its U.S. stores.
For the three months ended April 30, the nation’s largest retailer reported a profit of $3.74 billion, or $1.09 a share, up 10.1% from $3.39 billion, or 97 cents, a year earlier.
Wal-Mart executives on Thursday said that low-price promotions attracted thrifty shoppers back into its U.S. stores, which had suffered as the recession squeezed its low-income customers.
“Our overall performance reflects the success of Walmart’s business model,” Chief Executive Mike Duke said in a statement. “We believe that the momentum throughout our business positions us very well for the rest of the year.”
The company’s low-price strategy boosted sales by 2.6% at its U.S. stores open at least a year. Same-store sales are an important measure of a retailer’s health because they exclude the effect of store openings and closings.
The discount giant has been mired in controversy for the last few weeks after a New York Times report alleged that company officials routinely engaged in bribery in its Mexico operations to smooth the way for expansion.
Wal-Mart reported Thursday that the Securities and Exchange Commission and the Justice Department , in addition to various Mexican government agencies, are investigating the corruption allegations.
The retailer said it was uncertain whether the probes will have a negative effect on its business. Wal-Mart “can provide no assurance that these matters will not be material to its business in the future,” the company said.
Shares of Wal-Mart rose $3.11, or 5.25%, to $62.31 in midday trading on Thursday.
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