The retailer's third-quarter earnings increased 12.7% to $2.29 billion, or $0.54 per share. Net sales came in 9.7% higher at $68.5 billion, a little slim compared with what analysts were looking for. Meanwhile, domestic same-store sales showed a 1.7% increase, with Wal-Mart increasing just 1.3% and Sam's Club up 4%. Gross margin improved without the discount giant raising its trademark "falling prices."
In its conference call, Wal-Mart management continued to opine on the high price of oil and its negative impact on customers as a reason for the slightly skinny sales. You may recall it was a touch-and-go summer, what with hurricanes and oil prices supposedly preying on retail sales. However, even though back-to-school sales were in question for a while, they seemed to right themselves later.
Despite it all, Wal-Mart increased its guidance and primed us for the expectation of "a better Christmas than last year." Wal-Mart now expects to post earnings of $2.39 to $2.41 per share. It had previously forecast earnings of $2.36 to $2.40 per share.
The quarter might not have been highly exciting, but it still behooves investors to remember that with such a behemoth, robust growth is often difficult to achieve. Meanwhile, Wal-Mart is still up against very difficult comparisons to last year's same-store sales, for example. It's been said here before that the important thing is to keep an eye out for trends rather than sweat the day-to-day machinations too terribly much.
Meanwhile, Wal-Mart had encouraging words about the economy -- saying that while it has not been growing at the rate we would have liked, it is growing. Such words from Wal-Mart not only stir up hope for other discount retailers such as Target
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Alyce Lomax does not own shares of any of the companies mentioned.