Sharper Overseas Focus Should Pay Off

Article Excerpt

WAL-MART STORES INC. $44 (New York symbol WMT; Conservative Growth Portfolio, Consumer sector; WSSF Rating: Above average) is refining its international expansion plans, including pulling out of less profitable countries like South Korea and Germany, and focusing on its successful foreign operations in Canada, Mexico, China and Brazil. If you exclude losses from its recently sold overseas businesses, Wal-Mart earned $0.72 a share in its second fiscal quarter ended July 31, 2006, up 5.9% from $0.68 a year earlier. Sales rose 11.3%, to $84.5 billion from $75.9 billion. Same-store sales in the United States rose 1.7%. Fears that rising fuel costs would cut consumer spending have hurt the stock’s progress in the past few months. Customers are making fewer trips, but they’re spending more per visit. Although costs to remodel some older stores and add trendier apparel brands will hurt its short-term earnings growth, Wal-Mart should reach its earnings target of $2.92 a share in the current fiscal year. The stock trades…

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