Wal-Mart’s sales for the first quarter of its 2007 fiscal year ending April 30, 2006, were $79.6 billion, an increase of 12.3% over the same quarter a year earlier. The firm’s net income rose to $2.62 billion from $2.46 billion the year before. This 6% increase in profits was better than expected by industry analysts, who also note Target’s 12% first- quarter profit increase.
Of special concern to management was the behavior of the company’s stock. Contrary to the upward direction of the firm’s sales and profits, the price of Wal-Mart’s stock had fallen from $56.98 on January 31, 2002, to $46.11 on January 31, 2006. Even though the board of directors had both repurchased stock and raised dividends per share from $0.52 in 2005 to $0.60 in 2006, the stock failed to respond. When the board further raised dividends to $0.67 per share on March 2, 2006 for the 2007 fiscal year, the stock price fell 11.7% to $45.06 on the New York Stock Exchange.