Business World

Defying the gloom that many retailers are feeling, Wal-Mart Stores Inc. expects a more profitable year selling to penny-pinching shoppers after its renewed focus on low prices paid off over the holidays with a 4 percent rise in fourth-quarter profit.

The world’s largest retailer, emerging from a yearlong turnaround effort after sales stumbles in 2005 and 2006, said Tuesday that aggressive holiday discounts and improvements in its more than 4,000 U.S. stores boosted sales despite consumer worries.

"No one has a crystal ball to look into the economic future, but we know the economy will be a critical factor this year," Chief Executive Lee Scott said in a recorded call after releasing results.

Scott said Wal-Mart’s decision to re-emphasize low prices last year came at the right time and added: "In a volatile economy, I believe we are well positioned to succeed."
Chief Financial Officer Tom Schoewe told The Associated Press that Wal-Mart expects a spending boost as consumers receive federal income tax rebates under the $168 billion economic stimulus plan.

"When those checks have been issued in the past, we’ve experienced (spending) either equal to or indexed a little bit higher than our overall market share," Schoewe said free credit report and score.

Analysts said Wal-Mart has several unique factors, including the scale of its grocery business that can bring in traffic for other areas of the store, so that its optimism for the year ahead is not necessarily an indicator for the broader retail sector.

"If I was grading them, I would give Wal-Mart a B. Unfortunately, the rest of retail is getting a C-minus," said Patricia Edwards from investment manager Wentworth Hauser and Violich.

As major U.S. retailers report their fourth-quarter earnings results, the industry is bracing for its bleakest times since the 1991 recession.

Other merchants have closed stores, laid off thousands of employees, scaled back store expansions or pared inventories as consumer spending screeches to a halt.

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