NEW YORK — Wal-Mart Stores Inc.'s third-quarter profit slipped 2.9 percent, missing Wall Street expectations, but the world's largest retailer reported its first quarterly revenue gain in its U.S. namesake business in more than two years.
That Wal-Mart has reversed nine consecutive quarters of revenue declines in its branded stores in the U.S. is a positive sign in the midst of otherwise bad economic news. Wal-Mart's core low-income shoppers have been particularly hard hit by joblessness and the other challenges of the weak economy. But the latest quarter indicates that they may be more willing to spend.
Wal-Mart said Tuesday it earned 97 cents per share, or $3.33 billion in the three-month period ended Oct. 31. That compares with 95 cents per share, or $3.43 billion, in the year-ago period. The year-ago results included a tax benefit of a nickel.
Net revenue rose 8.2 percent to $109.5 billion. Wal-Mart's U.S. namesake division's revenue at stores opened at least a year — an indicator of a retailer's health — rose 1.3 percent, beating estimates for a 0.3 percent increase. Analysts had expected 98 cents per share on $108.86 billion, according to Factset.
By division, total sales at Wal-Mart's U.S. division rose 2.7 percent, while sales at the Sam's Club division had a 9.5 percent increase. Wal-Mart's international business, which produces 26 percent of its revenue, had a 20.3 percent increase.
Wal-Mart has been working to rebound sales in its U.S. business, which have been hurt by the economic downturn and missteps the retailer made in its pricing and selection. The business is particularly important to Wal-Mart because it accounts for 62 percent of its total revenue. The latest results show Wal-Mart's strategy may be working.
The company, based on Bentonville, Ark., has been restoring thousands of products it culled during an overzealous bid to de-clutter its stores. Wal-Mart, which late last year started offering low prices only on select items, also has been working to reclaim its reputation as the lowest-price leader by going back to the "everyday" low pricing strategy that was made popular by its founder, Sam Walton.Comment on this story
Wal-Mart hopes that its campaign to turnaround its business will continue to work during the holiday shopping season. Wal-Mart is pounding its low price message hard by guaranteeing customers will get the lowest price no matter when they buy during the season. With its new Christmas Price Guarantee program, shoppers who buy something at its store between Nov. 1 and Dec. 25, but then find the identical product elsewhere for less, can get a gift card in the amount of the difference.
The company also is starting its Black Friday specials at 10 p.m. on Thanksgiving, two hours earlier than many of its competitors like Kohl's Corp., Target Corp. and Macy's.
Wal-Mart said it expects fourth-quarter earnings results to be in the range of $1.42 per share to $1.48 per share in the fourth quarter. Analysts had expected $1.45 per share. For the full year, it expects a range of $4.45 per share to $4.51 per share. Analysts had expected $4.50 per share, according to Factset.