Wal-Mart Stores (WMT - News) continued to build momentum at home, as the retail giant's ongoing restocking efforts fueled better-than-expected first-quarter profit. Meanwhile, off-price apparel retailer Ross Stores (ROST - News) said it will double its stores, while Dollar Tree (DLTR - News) shares retreated on weak profit guidance.
Wal-Mart, the world's No. 1 retailer, said Thursday that Q1 earnings rose 12% to $1.09 a share, 3 cents over analyst forecasts. Sales grew 7.8% to $112.3 billion vs. views of $110.5 billion.
Shares rose 4.2% to 61.68.
Wal-Mart's U.S. sales at stores open at least a year rose 2.6% vs. Q1 2011, the best in three years, as the discount king returned thousands of products to its shelves. Its fortunes have slowly improved after a disastrous effort to pare inventory and target more affluent customers.
Sam's Club's comparable sales rose 5.3% outside gasoline sales.
Total overseas sales grew 15%.
Wal-Mart just touched on the ongoing probe regarding charges that its Mexican unit sped its expansion years ago via bribes.
An unseasonably warm winter early in 2012 helped apparel and outdoor sales across the retail industry. Wal-Mart apparel sales grew in the high double-digits.
"Things will get much more interesting as we get into May and weather becomes more comparable year over year," said Rob Wilson of Tiburon Research Group. Retailers have been hit or miss during earnings season. Macy's (NYSE:M) issued weak guidance, and J.C. Penney's (JCP - News) same-store sales dived on its new "everyday low price" model. But Target (TGT - News) delivered strong results Wednesday.
Meanwhile Ross, which sells brand apparel at deep discounts, said EPS rose 26% to 93 cents, in line with views. Sales grew 13.6% to $2.36 billion, above estimates. Same-store sales climbed 9%. Operating margins widened.
Ross Stores gained new bargain-hunters during the recession and have held onto them.
"Consumers that have shifted to Ross haven't shifted back," said Morningstar analyst Jaime Katz.
Ross said stores could double from 1,000 now. While the retailer gave no timeline, it has been reticent about expansion plans.
Ross shares initially rose, but closed down 2.5%.
Dollar Tree's Q1 EPS rose 22% to $1.00, its 17th straight double-digit quarterly gain and beating views by 2 cents. Sales rose 11% to $1.72 billion, just over forecasts. Same-store sales rose 5.6%.
But the dollar-store operator sees Q2 EPS of 87-93 cents vs. estimates of 95 cents. That sent shares tumbling 6.1% to 95.13.
However, Dollar Tree usually gives "conservative" guidance, said Piper Jaffray senior research analyst Peter Keith, adding that post-earnings sell-offs usually offer a "good buying opportunity.
He also noted that the outlook didn't factor in share buybacks.