Target, Wal-Mart Exceed Forecasts

Retail heavyweights Wal-Mart Stores Inc. and Target Corp. beat Wall Street expectations Thursday with double-digit profit gains for the first quarter as strong sales early in the period more than offset a shopping slump last month.

The upbeat mood, however, was tempered as Wal-Mart’s chief executive expressed concern about the effect of rising gasoline prices on spending by low-income customers.

Wal-Mart’s profit rose 16% to $2.2 billion, or 50 cents a share, for the period ended April 30 from $1.8 billion, or 41 cents, a year earlier. The results, helped by an improving apparel business, were a penny a share higher than forecast by analysts.

Sales at the Bentonville, Ark., retailer rose 14% to $64.8 billion.

The company raised its earnings forecast for the year to $2.39 a share from $2.35.

Sales in U.S. stores open at least a year, a gauge of retail health, rose 6.4% in the quarter.

Wal-Mart shares rose 19 cents to $55.25 on the New York Stock Exchange.

Minneapolis-based Target’s earnings jumped 25% to $438 million, or 48 cents a share, for the three months ended May 1, up from $349 million, or 38 cents, a year ago. Sales rose 12.3% to $11.58 billion.

Its profit beat by a penny a share the consensus of analysts surveyed by Thomson First Call.

Target shares fell $1.18, or 2.7%, to $43.17 on the NYSE.