Wal-Mart earnings rise, sees tough retail competition
New York City (AFP) - US retail giant Wal-Mart on Thursday notched a 2.8 percent rise in third-quarter profit from a year ago, but trimmed its full-year profit forecast against a tough competitive backdrop.
Wal-Mart Stores Inc., the world's largest retailer, said net income for the third quarter came in at $3.7 billion on revenue of $115.7 billion.
Earnings translated into $1.14 per share, a penny above analyst forecasts. Revenue, up 1.7 percent from the 2012 third quarter, was well below the $116.8 billion consensus estimate.
Wal-Mart, alluding to an intensely competitive retail landscape at home and abroad, plans an aggressive campaign of promotions this holiday season. The company managed to offset some of the effects of the US October 1-16 partial government shutdown with some prominent sale campaigns last month.
"We anticipate continued pressure on sales, as consumers face tough economic conditions around the world and the competition remains aggressive for every holiday purchase," said chief financial officer Charles Holley.
Wal-Mart reported 0.3 percent lower comparable sales at its US Walmart stores. The company had previously said sales in this division would be "relatively flat."
The company in recent quarters has said its US performance has been weakened by higher payroll taxes, higher gasoline prices, an uncertain employment outlook and low price rises for groceries.
But a Bank of America Merrill Lynch research note characterized the current outlook for Wal-Mart's "core" customer as "stable," owing to falling gasoline prices and an improving employment picture.
Walmart US president Bill Simon said a pair of mass merchandising events -- "Stock-up and Save" and "October Savings" -- helped "offset additional consumer noise in the third quarter related to the government shutdown and debt ceiling discussions."
Simon said the company will continue with the efforts in the fourth quarter, targeting special holiday promotions in grocery "to help customers stretch their paychecks a little further."
Walmart International saw net sales rise by just 0.2 percent to $33.1 billion. The results were marred by unfavorable currency exchange fluctuations. On a "constant currency" basis, net sales grew 4.1 percent.
Walmart International chief Doug McMillon said the "slow-growth macroeconomic environment" has persisted into the current quarter.
Wal-Mart trimmed its fourth-quarter and 2013 profit forecast, citing special items. The company now expects earnings per share in a range of $5.01 and $5.11 for the year. It previously forecast a range of $5.10-$5.30.
The Bentonville, Arkansas-based company said its earnings would lose 10 cents per share due to closing about 50 underperforming stores in Brazil and China and ending a franchise agreement in India.
Without those items, underlying earnings would be $5.11-$5.21 a share.
Wal-Mart, a Dow member, edged 0.3 percent higher in late-morning trade after opening in the red.
