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Wal-Mart earnings grow, but world’s biggest retailer sees same-store sales fall again

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Wal-Mart Stores Inc. on Tuesday reported a 9.3% increase in profit for its fiscal third quarter, but said an important measure of U.S. sales fell as customers of the retail giant continue to watch their spending.

“Our own surveys and reports … indicate that financial uncertainty still weighs heavily on everyday Americans, including many of our core customers,” Chief Executive Mike Duke said.

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The world’s largest retailer posted a profit of $3.4 billion, or 95 cents a share, for the quarter ended Oct. 31. Earnings were boosted by a one-time tax benefit of $191 million, which added 5 cents a share to earnings. Last year, the company had net income of $3.1 billion, or 81 cents a share, for the third quarter.

More worrisome for Wal-Mart, though was that sales at U.S. Wal-Mart stores open at least a year -- a key performance measure known as same-store sales -- dropped 1.3% because of soft customer traffic.

It marks the sixth straight quarter of same-store sales declines for the Bentonville, Ark., company.

The discount retailer has benefited from the recession as many frugal shoppers flocked to the chain for necessities such as groceries and household items, but company officials said its primary customers remain financially stressed as the unemployment rate remains at 9.6%.

“Remember 68% of our business comes from customers with household incomes under $70,000 per year,” said Bill Simon, president of Wal-Mart’s U.S. business. “These customers deliver to us about 22% of their share of their wallet.”

In an effort to attract more of their customer base, the company said it was changing merchandising, including restocking and expanding the array of basic grocery items. Wal-Mart executives also said Tuesday that the retailer was reverting back to everyday low-pricing strategies.

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The company remains optimistic about the holiday season and raised its profit outlook for the year to a range of $4.08 to $4.12 a share, up from the previous estimates of $3.95 to $4.05 a share.

-- Shan Li

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