Walmart beats forecasts with $3.2bn profits - US same-store sales fall 0.4%

Walmart beats forecasts with $3.2bn profits - US same-store sales fall 0.4%
By Jonathan Birchall in New York
Copyright The Financial Times Limited 2009
Published: November 12 2009 13:12 | Last updated: November 12 2009 15:41
http://www.ft.com/cms/s/0/ee0710f4-cf8c-11de-b876-00144feabdc0.html


Walmart, the world’s largest retailer, saw its shares gain on Thursday after it announced third-quarter profits that exceeded Wall Street’s expectations and raised its full-year earnings guidance.

Walmart’s shares rose over 1 per cent to $53.56 in morning trading in New York.

The retailer reported diluted earnings per share of 84 cents, exceeding its own guidance of 78 to 82 cents. Net earnings rose 3.2 per cent to $3.2bn, while net sales increased one per cent to $98.67bn.

Excluding the impact of the stronger dollar, overall sales would have increased 3.8 per cent.

Mike Duke, chief executive, said in a statement that “increased productivity and improved inventory management led to a better customer experience and contributed to our strong financial performance.”

“The sales environment continued to be difficult this quarter, but customer traffic is up throughout the company,” he said, saying the company had gained market share in the US, UK and Mexico.

“We are encouraged by both our traffic and market share gains across the company,” he added.

Sales at Walmart’s US supercenters and discount stores, which drive its profits, fell on a comparable basis by 0.5 per cent against the third quarter last year, because of pressure from lower food prices. Including its Sam’s Club discount warehouse division, US sales rose 0.1 per cent on a comparable basis.

For the fourth quarter, Walmart said it expects its US comparable sales to be “flat, plus or minus 1 per cent”, compared to an increase of 2.4 per cent a year earlier. Charles Holley, corporate treasurer, said this reflected continuing price deflation in both food and electronics.

The company said it was raising its earnings guidance for the full fiscal year to $3.57 to $3.61, from $3.50 to $3.60.