While most retailers are simply trying to stay out of Chapter 11, Wal-Mart posted an extraordinary quarter. It was even more impressive because, as the world’s largest retailer, it must fight the law of large numbers making each percentage point of growth more dear.

Wal-Mart’s (WMT) numbers showed that the recession is in full bloom and the management as much as said so. Revenue for the first quarter of fiscal year 2009 was approximately $94.1 billion, an increase of 10.2% over $85.4 billion for the first quarter of fiscal year 2008. Net income for the quarter was $3.022 billion, an increase of 6.9%.

Lee Scott,distant heir to founder Sam Walton, explained it best by saying "Our business is even more relevant to our customers today, given the current economic pressures."

It would be unfair to underestimate the role that international sales from countries like Mexico and China played. Revenue from outside the US was up 22% to almost $24 billion. That cannot mask the fact that sales in America were higher by 7%. Operating income at the company’s core Wal-Mart franchise was up 10%, better than the figure for the entire company.

There is no way that Wal-Mart could post numbers of this magnitude without taking business from other retailers. Those retailers are clearly not able to hit the low price points that Wal-Mart can.

The world’s largest retailer has become a reverse indication of overall GDP. When times are bad, it attracts huge numbers of people who need a bargain to get by.

With inflation running through the economy and a recession hurting most of the country, Wal-Mart may be in for a good, long run.

Douglas A. McIntyre

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