Lee Scott, President and CEO of Wal-Mart Stores, Inc.
Tom Schoewe, CFO
Eduardo Castro-Wright, President & CEO Wal-Mart Stores USA
Carol Schumacher, Vice President Investor Relations
This call is the property of Wal-Mart Stores Incorporated and intended solely for the use of Wal-Mart shareholders. It should not be reproduced in any way. This call will contain statements that Wal-Mart believes are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and intended to enjoy the protection of the safe harbor for forward-looking statements provided by that act.
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Similarly, descriptions of our objectives, plans, goals, targets or expectations are forward-looking statements as is the guidance that we will provide in this call relating to our anticipated comparable store sales for the current fiscal quarter and our anticipated earnings per share for the current fiscal quarter. These statements discuss, among other things, expected growth in various categories; future increases in certain expense categories; growth in future revenues; future performance including, anticipated earnings per share for the first quarter of fiscal year 2007 and for fiscal year 2007; future comp sales; future operating income; future interest costs; future store openings; future expansion of retail square footage; future expense management; our future debt levels; our anticipated tax rate; future investments; and, the anticipations and expectations of Wal-Mart and its management as to future occurrences and trends.
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We discuss certain of these matters more fully in our filings with the SEC, including our most recent annual report on Form 10-K filed with the SEC. This release should be read in conjunction with that annual report on Form 10-K, and together with all our other filings, including current reports on Form 8-K we have made with the SEC through the date of this call.
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Welcome and thank you for calling. Fiscal 2006 was a year of change for Wal-Mart stores. We took on a lot of challenges this past year as we worked for greater consistency throughout this organization. We touched every aspect of the Company during this process: leadership, operations, merchandising and marketing. Our leaders have been working with their teams for the past several months and I am pleased with the progress being made towards our fiscal 2007 strategy to improve the customers' experience.
Given the moves we made during the past year, our team is stronger than ever and they are poised to bring about additional improvements this year. As you all know, John Menzer is leading the United States as well as several other divisions: systems, logistics, benefits, real estate, financial services and global procurement. Mike Duke is running Wal-Mart International. Eduardo Castro-Wright leads all Wal-Mart U.S. operations and Doug McMillon is leading SAM'S CLUB. Our entire management team is focused on strengthening the customers' experience in the stores and clubs this year.
First, let's take a look at our performance this past quarter and this past fiscal year. Our trend of year-over-year increases in sales and net income continues. Both net sales and net income increased in the fourth quarter from the previous year. Net sales for the quarter rose 8.6% over the same quarter of fiscal 2005 and net income for the quarter was up 13.4%. We finished strong for the quarter. We added more than $7 billion in sales.
Earnings per share for the quarter rose around 15% over the same period last year to $0.86, which includes a $0.02 per share net benefit included in the Company's tax provision. Overall, total U.S. comparable sales for fiscal 2006 were up 3.4% while expenses as a percentage of sales were up for the fourth quarter and for the year from, among other things, higher utility costs. We are pleased that we were able to leverage labor as a percentage of sales for the second quarter in a row. We continue to see higher gasoline and utility prices affecting our opening price point customers. We are committed to maintaining our everyday low price strategy so we can continue meeting the needs of these loyal customers.
This year, Wal-Mart also committed to grow sales by making our stores more relevant to today's customers. We want our merchandise to appeal to a broad range of customers who are already shopping in our stores. We want customers to shop Wal-Mart for all of their needs, from consumables to Metro 7 apparel and accessories.
We are committed to growth by opening new stores and clubs. The Company opened 69 new stores and clubs in January alone; a Wal-Mart record for one month. We will add more than 555 units this year including 335 in the United States.
During the fourth quarter, we also continued our international growth through acquisitions. We acquired the Sonae retail operations in Southern Brazil; we increased our ownership of Seiyu to 53%, resulting in the consolidation of Seiyu in our financial statements beginning in January of 2006. We are now in 15 countries and we expect that number to increase. We acquired 545 new international stores and 50,000 new associates in just one week through our acquisitions, and we will build or relocate another 220 international stores in fiscal 2007.
As we told you in October, we laid the groundwork to streamline the U.S. operation structure and to strengthen our merchandising and marketing. By now you have seen some of the changes in merchandise with fashion-forward apparel in Metro 7 and George. You will see even more from us this year, and we will continue to strengthen Our Store, The Community program. All of these changes are about improving our customer experience.
We expect some challenges for fiscal year 2007, however I am hopeful that we will continue to build on the same strong sales momentum that we closed the last fiscal year with.
Now let me conclude by introducing Eduardo Castro-Wright, who will discuss the Wal-Mart operating segments with you. Eduardo.
Thank you, Lee. I am pleased to join you today to share some of the exciting things happening in Wal-Mart stores U.S. Let's first talk about the customer. As you saw during the holidays, we continue to reinforce our price leadership position, but we have also started to drive sales by attracting what-- back in October at the analysts' meeting -- we called the selective customer. Those customers that shop at Wal-Mart for basics, but don't see us as an alternative for home, apparel or electronics.
For example, Metro 7 continues to perform well and we will expand a number of stores that carry this brand to 1,500 by September, 2006. We also shared with you the significant variability in the customers' store experience, and we discussed our plan to reorganize field operations to drive ownership and improve customer service.
We have now fully implemented that structure in our new market, and regional teams attended our year beginning meeting together with their store managers and co-managers in Kansas City just a few weeks ago. As part of this new structure, we announced several exciting positive changes at our year beginning meeting, including a completely redesigned compensation program which rewards all store associates -- management and hourly -- based on achieving their individual store goals, including sales and return on inventory.
Those plans are the result of a new business planning process which drives long-range strategic and financial plans for every business unit across the Wal-Mart organization. With a more robust planning process in place, we expect to significantly improve execution, and close the gap that exists between strategy and performance. The business plan for the Company and each region was communicated broadly across the organization in Kansas City, creating a great sense of energy and purpose at all levels.
With the first phase of the restructure now complete, the impact is cost neutral. But as we make progress with our in-store process redesign, I feel that we will continue to see improvement in our cost structure. We are also upgrading our existing stores to provide all customers with an environment that looks and feels like our most recent prototypes. We have embarked on a very aggressive remodel program that will have us touching 1,800 stores within the next 18 months. This program is being executed by market, and will focus on five areas where we will win: home, apparel, electronics, food and restrooms. In 300 stores, we will now introduce a new concept for our pharmacist that will have our pharmacist more accessible to our customers.
By now, you may have seen our new TV ad campaigns. Our objective with the latest campaign is to show that shoppers can find not only things that they need at Wal-Mart, but also what they want and all at great Wal-Mart prices.
We have also made changes to our printed circular advertisements, which many of you may have already noticed. We are increasing the number of circulars to 23 this year versus 12 last year, but the overall page counts of our ads will be reduced. This allows us to be more customer-focused and more relevant to the season by putting the ads in the hands of our customers, closer to key events and holidays.
Last, back in October we talked to you about leadership talents and building a world-class organization. As an example, we have made significant investments in our marketing organization led by John Fleming. His team now includes Stephen Quinn, Senior Vice President, Marketing formerly Chief Marketing Officer at Frito-Lay; Julie Roehm, Senior Vice President of Marketing and Communications, formerly Director of Marketing, Chrysler; Robert Atencio, formerly Director of Insights and Consumer Strategy for Frito-Lay; and Steve Bratspies, Vice President of Category Marketing and who formerly was the Senior Vice President and Chief Marketing Officer at Specialty Brands.
Another example of where we are investing in people is in operations. We used a thorough selection process to identify the best internal talent. We are providing formal training to build the skills required in these new and expanded roles. We have also complemented our senior leadership teams in operations by offering these new roles to high potential senior executives from other areas of the Company, like merchandising and logistics.
Also, we have brought on board external talent to complement our internal promotions. This has been particularly important as we decentralized our field organization, placing the business units key leadership teams in the market that they are responsible for.
For example, we hired a senior executive from a regional grocery chain in the Northeast to lead our effort in the Northeast. And a similar approach was taken for the Upper Midwest where we will be locating our divisional headquarters in Chicago.
We leverage expenses, including payroll, for the second quarter in a row. We feel that we can continue to leverage payroll. Our inventory position currently is lower as a percentage of sales than in recent years. In addition, the winter weather earlier this month enabled us to further clean-up any remaining cold weather merchandise. All of this combined makes us optimistic as we head into a new year. We are encouraged by the energy across our organization, and the positive trends we are beginning to see in the business. We look forward to continuing to update you on our progress. Now let me turn it over to Tom Schoewe to give you further financial details.
Thanks Eduardo, and good morning to all of you. Thanks for listening in today. As Lee has already mentioned, total sales were up 8.6% for the fourth quarter, and 9.5% for the full year. Net income increased 13.4% for the fourth quarter, resulting in about a 15% increase in earnings per share, which included a net benefit adjustment for the tax provision. The net benefit arose from the adjustment of deferred tax balances and resolutions of certain federal and state tax contingencies.
Net income for the fiscal year increased 9.4%. Comparable, or "comp" store sales for the U.S. were up 3.1% for the fourth quarter with the Wal-Mart Stores division up 2.7% and SAM'S CLUB up 5.1%. For the quarter, gasoline sales positively impacted SAM'S CLUB comp sales by approximately 90 basis points.
For the full year, total U.S. comp store sales were up 3.4% while Wal-Mart Stores were up 3.0% and SAM'S CLUB were up 5.0%. For the full year, gasoline sales positively impacted SAM'S CLUB comp sales by approximately 130 basis points.
Let me take a moment and reiterate a revised approach to reporting comps. Beginning this month -- that is February, 2006 -- we will include in our measure of comp store sales, all stores and clubs that have been open for at least the previous 12 months. Additionally, stores and clubs that are relocated or expanded will be excluded from the comp store sales for the first 12 months following the relocation or expansion. These revisions are being made to better conform our calculation of comp store sales to retail industry practice.
Also beginning this month -- February, 2006 -- our measure of comp store sales disclosed in sales and earnings releases will exclude the impact of fuel sales at our SAM'S CLUB segment. We believe this method of calculating comp store sales is more meaningful to investors because it excludes the volatility that is inherent with the price of fuel. I would also ask you to refer to our February 2, 2006 Form 8-K for further information on our comp store sales and reporting protocol.
Now let's chat about gross margin. Consolidated gross margin was up 17 basis points for the quarter. We still saw pressure due to increased freight costs but we continue to see the benefit of global sourcing and lower markdowns as a percentage of sales versus last year's quarter. For the full year, gross margin was up 12 basis points.
Now let's move on to expenses. Our consolidated operating expense percentage for the quarter was up 17 basis points over the same period last year. While we have made improvements in leveraging labor, we still saw pressures from utilities. Other income was up 25% for the fourth quarter. We continue to see increases in our financial services revenue. This includes money wire, money order, payroll check cashing services, and our warranty program on electronics in Wal-Mart Stores.
Remember, membership fee income represents the largest component of other income. Membership fee income improved in the quarter also. As you recall, the membership fee for SAM'S CLUB Business and Advantage memberships increased by $5 effective January 1, 2006. Recognition of membership income is amortized over the 12-month life of the membership.
Now let’s look at our performance by segment. Total sales at the U.S. Wal-Mart Stores, which includes the supercenters, discount stores and neighborhood markets were up 8.6% while operating income was up 11.1% for the quarter -- good performance. Supercenter food sales grew by almost 17% for the fourth quarter. Food comp sales were up in the mid-single digits.
Operating income grew faster than sales due to two factors. Number one, improved gross margin. Secondly, total expenses growing at a slower rate than the growth rate of sales. This goes right back to what Eduardo talked about in terms of leveraging our wages.
Gross margins in the stores improved despite the negative impact of rising fuel and transportation costs. Expenses as a percentage of sales were down slightly versus last year, despite the pressure of utilities. We continue to feel good about the progress we are making in managing labor costs, and believe that we can continue this progress in the future. You just heard Eduardo Castro-Wright discuss his thoughts on progress in Wal-Mart stores, and we feel good about what is happening in this operation.
Now let's talk about what is going on in SAM'S CLUB. In our earnings discussion a year ago, we shared with you three expectations for SAM'S CLUB in fiscal 2006. First, that Sam's would continue to be the price leader in the warehouse club industry. In a highly competitive environment, internal and external comparisons show that Sam's has maintained their price leadership position in the industry.
Second, that Sam's would grow earnings at a faster rate than sales. For the full year, Sam's grew earnings by 8.2%, a full percentage point higher than their sales increase of 7.2%.
Third, that Sam's would deliver on their sales plan. Although sales growth at SAM'S CLUB was respectable, they ended their year with $39.8 billion in total sales revenue. That was just short of their goal to become a $40 billion company.
For the fourth quarter SAM'S CLUB saw overall sales growth of 6.8% while operating income grew by 6.2% as a result of higher expense rates during the quarter. However, Sam's again succeeded in leveraging expenses for the year. Expense leverage is a continued focus at the clubs. Margin rates were also up for the quarter compared to last year, but were slightly down for the full year. Sam's will continue to focus on achieving the goal of growing operating profit at a faster rate than sales.
Before Charles speaks about international, let's take a look at a couple of additional consolidated income statement and balance sheet items. Net interest expense as a percentage of sales for the quarter was basically flat to last year. Although we still have the impact of rising interest rates, cash generated because of better inventory management helped to reduce the interest expense incurred in the quarter.
Our tax rate for the quarter was 33.1% and for the year, 33.4%. These rates were lower than we had originally forecast and were positively impacted by a $103 million adjustment recorded in the fourth quarter. The anticipated tax rate for the new fiscal year is expected to be approximately 34.1%, although we will see some quarterly volatility.
Let's move on to inventory management. Consolidated inventories were up 8.2%. That is less than our fiscal 2006 sales increase of 9.5%. The consolidation of Seiyu and our Southern Brazil acquisition increased inventory by approximately 170 basis points. We talked about inventory management at the October analysts' meeting and we feel good about the progress we are making. Inventory continues to be a focus as we work to improve our return on invested capital. Obviously, this impacts the denominator. Remember, our progress was made in spite of the increase in direct sourcing.
Let's look at inventory performance for each of the key operating segments. Overall inventory in the Wal-Mart U.S. stores was up in the upper mid-single digits. Lower than the sales increase of 9.4% for the year. Comp store inventories at the Wal-Mart stores were slightly down for the year -- good performance.
Inventory performance was again a bright spot for SAM'S CLUB. They made real progress in improving inventory flow and turnover. This resulted in not only lower comp club inventory, but overall inventory levels at Sam's were lower than a year ago at the end of the fourth quarter. While all of this was going on, we were able to maintain a very high in-stock position for our members.
While international inventory grew by more than 20%, approximately 11% of that was attributed to the acquisitions of Seiyu and the operations in Southern Brazil. Excluding the impact of these acquisitions, the international inventory growth rate was lower than the international sales growth.
Payables as a percentage of inventories were 78.8%. That is up from 73.9% last year. The increase is primarily due to the consolidation of Seiyu and the acquisition in Southern Brazil which have higher supplier leverage ratios than our U.S. businesses.
Debt to total capitalization at the end of the quarter, including commercial paper, was 42%. That compares to 39% for the same quarter last year. Our debt was impacted by the consolidation of Seiyu and our acquisition in Southern Brazil. Given these acquisitions and the increase of our debt to total capital ratio, there was no share repurchase activity in the quarter.
Moving on, our return on assets at the end of the quarter was 8.9% this year, and that is down from 9.3% last year. Approximately 30 basis points of the reduction is attributable to the consolidation of Seiyu and our acquisition in Southern Brazil. Return on equity at the end of the quarter was 21.7% this year, down from 22.1% reported in the same period last year. The consolidation of Seiyu and the acquisition in Southern Brazil negatively impacted return on equity by approximately 40 basis points.
Before we move on, I want to talk briefly about the Company's capital expenditure plans. Based upon where we ended fiscal 2006, we expect capital expenditures to be up approximately 15% for fiscal 2007. Somewhere in the neighborhood of 75% of those expenditures will be dedicated to growing the business.
As we announced in December, Charles Holley, our Senior Vice President of Finance, has assumed responsibilities for our Investor Relations activities. What I'd like to do now is ask Charles to share what is going on in our international operations. Charles.
Thanks, Tom. International recorded fourth quarter sales of $18.4 billion. That is up 9.6% versus last year. Sales fell short of our dollar plan for the quarter and the year, primarily attributable to the softer sales performance in the U.K. The strongest sales performances in the quarter came from Brazil, China, Argentina and from Mexico, who had an outstanding quarter.
The fourth quarter impact of currency valuation on sales was a negative $76 million driven by a weakening of the British pound and the euro; offset slightly by the strength of the Brazilian real, Canadian dollar and Mexican peso. This was the first time in several years that currency valuation had a negative impact on a quarter. For the year, the impact of currency valuation on sales was a positive $1.5 billion.
Operating profits for the quarter were slightly above $1.1 billion, up 14.1% versus last year. Operating income growth continued to outpace sales growth in the fourth quarter, due to better than expected expense leverage in Mexico and Canada, along with the fruition of expense benefit from the U.K. restructuring taken last July. There was not a significant impact from currency on the fourth quarter operating results. For the year, operating profits were over $3.3 billion, up 11.4% from the last year. The impact of currency valuation was a positive $64 million.
As most of you know, Wal-Mart de Mexico had a great year. Sales, operating income, EBITDA and net income were their best ever, with the latter three growing much faster than sales. Total sales for the fourth quarter were up 14.8% in real terms -- which means inflation adjusted -- over the last year's level. The increase in real comp store sales during the quarter was up 6.5%. For the full year, sales increased 13.7% in real terms, with a comp store sales increase of 5.8%. Customer count continues to be the main driving force for Walmex's growth in sales.
Operating expenses in Mexico for the quarter grew 11.6% while revenues grew at 14.8%. For the full year, Walmex's operating expenses represented 13.9% of total revenues; that's the lowest level as a percentage of total revenues the Company has ever achieved. Walmex also saw operating income for the quarter rise 25% over the previous year. Mexico opened 95 units during the year; 47 in the fourth quarter and the openings represented all formats.
In Canada, total sales in Canadian dollars were up in the mid-single digits for the quarter and upper-single digits for the year. Sales and operating profit were slightly behind plan for the quarter and year. Comps remain in the low single digits. In the fourth quarter, Canada opened 17 new and relocated stores, bringing the total new store count for the year to 26.
In Puerto Rico, sales were up in the low-single digits for the quarter and for the year. The strongest performance in Puerto Rico is Amigo, with comps in the mid-single digits. Comp sales in the discount stores and supercenters were up slightly for the quarter and up in mid-single digits for the year. Sam's comps were in the mid-single digits for the year.
Argentina continues to be very strong, with comps in real terms up in the mid-double digits for the quarter and the year. Brazil comps were in the low-single digits for the quarter and for the year. The integration of Bompreco in the Northeast continues to be on plan and we continue to be pleased with our progress.
In Asia, China's comps grew in the low-double digits in the stores and clubs for both the quarter and the year. Sales were slightly below plan for the quarter and year. However, earnings for the year were ahead of plan. During the year, we opened 13 new supercenters and relocated one SAM'S CLUB.
In Korea, we had a soft quarter and year and their sales and earnings were below plan.
In Germany, comps were down in the high-single digits for the quarter and mid-single digits for the year. Operating losses were higher than expected for the quarter and year. However, we did see an improvement in operating results over last year, which came primarily through expense reduction and inventory management.
In the U.K., Asda's comp store sales were slightly negative for the quarter and year. This resulted in sales and profits being below plan for the quarter and year. During the year, Asda opened 40 new stores including the largest Asda supercenter in Milton Keynes -- it's a new market for the Company.
A highlight at Asda is the successful entry into Northern Ireland with 13 stores, all of which are outperforming their sales plans. In 2006, Asda plans to open between 25 and 30 new stores. We have been encouraged by the results from the five trial Asda Living stores, and intend to open 10 more during this year.
In finishing international, I'll now cover our recent acquisitions. In September, the Company purchased a 33.3 interest in the Central American Retail Holding Company, or CARHCO. CARHCO operates over 360 supermarkets and other stores in Guatemala, El Salvador, Honduras, Nicaragua and Costa Rica.
Concurrent with this purchase, the Company entered into agreement to purchase an additional 17.7% of CARHCO in March 2006 in an option agreement that will allow the Company to purchase up to an additional 24% beginning in September 2010. Early results are in line with our expectations. Remember, this is currently being accounted for under the equity method.
Lee previously mentioned our acquisition in Southern Brazil which includes 140 hypermarkets, supermarkets and wholesale units. Early results are in line with our expectations. This acquisition, along with our organic growth of nine units during the year, increases our presence to 17 of the 26 states in Brazil, which includes 295 units.
Finally, also in December we completed the acquisition of the additional shares in Seiyu in Japan and now own 53%. As a result, our consolidated financial statements now include the results and balance sheets of Seiyu. Looking forward, some of you may have seen Seiyu's earnings release last Friday where they mentioned an asset write-down of 45 billion yen. This write-down is for Japanese GAAP only and will not affect our profit and loss statement. The effect of these recent acquisitions on the Company's income statement was not significant and we added approximately $8 billion in assets to the balance sheet. I
look forward to seeing many of you March 28th in Leeds when we will host a field trip to Asda. Now I'll turn it over to Carol Schumacher.
Now Charles, before we do that, I really feel the need to summarize what we've said this morning about our operating performance. Overall for the fiscal year we just ended, the Company's sales increased more than $27.2 billion or 9.5% over fiscal 2005. Net income for fiscal 2006 increased by almost $1 billion, or up 9.4%. Earnings per share increased $0.27 for the year, that's up 11.2% over fiscal 2005. These results all happened during a time when gas and utility prices were at all-time highs for our customers. In addition, as a corporation our results include a 19% increase in interest expense.
Could we have done better? I'm sure we could have. But Lee, having said that, I think our team has a lot to be proud of. Now let me introduce Carol Schumacher, our Vice President of Investor Relations.
Thank you, Tom. I'm excited to be part of the Investor Relations team here at Wal-Mart. I look forward to getting to know all of you better this year. Now let's walk through the store counts for the year. These numbers are based on our fiscal year ended January 31, 2006.
I will start with the locations in the United States. In discount stores, we had 24 new stores and we expanded one. We ended the year with 123.6 million square feet. Our discount store total at the end of the year was 1,209 locations.
In our supercenter category, we added 101 new stores and relocated or expanded 166. We ended the year with 370.7 million square feet. Our supercenter total count was 1,980 locations.
For our Neighborhood Markets we added 15 new stores and we ended the year with 4.2 million square feet. We ended the year with 100 locations for Neighborhood Market.
In SAM'S CLUB we added 17 new clubs and relocated or expanded 18. The ending square footage for the fiscal year totaled 73.4 million square feet and our SAM'S CLUB total count was 567 locations.
Our total domestic U.S. store count is 3,856 locations with the square footage totaling approximately 571.9 million square feet.
In international, we added 655 new stores and relocated or expanded 28 during the past fiscal year. The ending square footage was 185.6 million. Our international total count was 2,285 locations. The international store count and square footage now includes Seiyu, except for 45 Wakana units and our Southern Brazil locations. These numbers do not include CARHCO in Central America and the Mexico Vips franchise restaurants. Let me turn it back over to Tom who has some additional comments. Tom.
Thanks a lot, Carol. Welcome to the team. Now let's move on and discuss our outlook for the first quarter and all of fiscal 2007. For the first quarter, we expect the comp store sales increase in the U.S. to be between 2% and 4%. Keep in mind that within the quarter, Easter is three weeks later this year, which will likely result in a weaker March and a stronger April.
Also for the first quarter last year, remember that the results were favorably impacted by two items totaling $145 million after tax, or $0.03 a share. Those two items included (1) an increase in earnings due to a favorable tax resolution of about $77 million -- that's after tax; and, (2) a positive legal development of $68 million after tax. So for the year, we were up against the $0.03 benefit from last year's first quarter that I just mentioned; and, the $0.02 benefit that we've already discussed for the fourth quarter of 2006.
For the fiscal year, there are a lot of items that influenced our interest expense. First, higher interest rates. Next, the debt that has incurred related to the acquisitions that Charles just shared with you. And then finally, don't forget that we had an aggressive share repurchase program in the first quarter of fiscal 2006. Because of these items, our interest expense could increase as much as $500 million for the fiscal year. That equates to an impact of approximately $0.08 per share for the fiscal year. This impact is more heavily weighted during the first half of the year.
Charles, as I sit back, I think it's safe to assume that this interest impact has not yet been reflected in all of the analysts' estimates. That said, we expect earnings per share for the first quarter to come in between $0.58 and $0.62 per share. For the year, our forecast is for earnings per share to be between $2.88 and $2.95 per share.
As always, we'll be available to answer your questions. We'd like to thank you for your interest in Wal-Mart and I hope everybody has just a great day. Thanks much.
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