By
Reuters
Published
Nov 12, 2009
Reading time
2 minutes
Download
Download the article
Print
Text size

Wal-Mart profit rises, but holiday view light

By
Reuters
Published
Nov 12, 2009

By Nicole Maestri

SAN FRANCISCO (Reuters) - Wal-Mart Stores Inc reported a higher quarterly profit as the world's biggest retailer clamped down on inventory and controlled expenses, but forecast earnings over the key holiday quarter that could miss Wall Street estimates.



Wal-Mart executives said its customers have yet to benefit from signs the U.S. economy is growing again. The company's shares slipped 1 percent in premarket trading.

"While the economy remains challenging for our customers and therefore for Wal-Mart sales, I continue to be encouraged by both our traffic and our market share gains," Chief Executive Mike Duke said in a recorded statement.

Wal-Mart said it had gained market share in the United States, UK and Mexico. The company has embarked on a campaign to be the leader in low prices ahead of the holidays, repeatedly sparring with rivals from Amazon.com to Target Corp in slashing prices for everything from toys to books.

Wal-Mart forecast fourth-quarter earnings per share from continuing operations of $1.08 to $1.12 and said U.S. comparable-store sales during the 13 weeks from October 31 to January 29 would be flat. Analysts on average were expecting earnings of $1.12 per share, according to Thomson Reuters I/B/E/S.

Colin McGranahan, analyst at Sanford Bernstein, said the forecast was probably conservative and that Wal-Mart could yet deliver results that exceeded those numbers.

"They are kind of in the driver's seat and they've made it very clear they will be aggressive," he said. "They will be driving down prices ... we may see a little less gross margin expansion going forward."

Profit for the third quarter ended October 31 rose to $3.23 billion, or 84 cents per share, from $3.14 billion, or 80 cents per share, a year earlier.

Analysts on average were expecting 81 cents per share, according to Thomson Reuters I/B/E/S.

Wal-Mart had forecast earnings from continuing operations of 78 cents to 82 cents per share.

Sales rose 1.1 percent to $98.67 billion, while analysts were expecting $99.88 billion. Sales at U.S. stores open at least a year fell 0.4 percent.

(Reporting by Nicole Maestri; additional reporting by Michele Gershberg in New York; Editing by Lisa Von Ahn and John Wallace)

© Thomson Reuters 2024 All rights reserved.