Wal-Mart Stores Inc. reported a 10 percent increase in third-quarter profit as the world’s largest retailer’s renewed focus on low prices is attracting financially squeezed shoppers around the world.
The company, however, trimmed its profit outlook amid a weak economy and unfavorable exchange rates.
The Bentonville, Ark.-based retailer said Thursday that profits rose to $3.14 billion, or 80 cents per share, in the quarter ended Oct. 31. That compares with $2.86 billion, or 70 cents per share, a year earlier.
Earnings from continuing operations were 77 cents per share.
Analysts surveyed by Thomson Reuters expected 76 cents per share.
Net sales for the third quarter were $97.6 billion, up 7.5 percent from $90.8 billion in the year-ago period.
“At a time when our customer is feeling the pressure of a tough economy, Wal-Mart’s price leadership is more important than ever,” said Lee Scott, Wal-Mart’s president and chief executive officer, in a statement.
He noted that the company’s international division remains the company’s fastest-growing division.
In the quarter, Wal-Mart’s U.S. division posted a 7.3 percent increase in sales, while its international business saw business soar 10.6 percent. It’s Sam’s Club division posted a more modest 1.7 percent sales gain.
But Wal-Mart Stores trimmed its profit outlook amid a weak economy and unfavorable exchange rates.
It also offered a modest projection for same-store sales for the fourth quarter, predicting sales at stores opened at least a year will be up anywhere from 1 to 3 percent. In the third quarter, Wal-Mart’s same-store sales rose 3 percent. Same-store sales are considered a key indicator of a retailer’s health.
The retailer now expects earnings per share from continuing operations for the full year ending Jan. 31 to be within a range of $3.42 to $3.46. In August, the retailer had said it expected $3.43 to $3.50 per share for the year. Analysts surveyed by Thomson Reuters expected $3.49 per share.
For the fourth quarter, the company estimates earnings per share from continuing operations will be between $1.03 and $1.07 per share. Analysts expect $1.11 per share.
“The rapid changes in currency exchange rates during the last few weeks are projected to negatively affect this year’s fourth-quarter results by approximately six cents per share,” said Tom Schoewe, executive vice president and chief financial officer of Wal-Mart Stores, in a statement. “In U.S. dollar terms, strong operating performance in international may be overshadowed by these currency fluctuations.”