Wal-Mart profit up, US same-store sales fall
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Wal-Mart profit up, US same-store sales fall

Last Updated: Tuesday, August 16, 2011, 23:22
 
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Wal-Mart profit up, US same-store sales fall
Chicago: Sales at Wal-Mart Stores Inc's US discount stores open at least a year fell 0.9 percent during its second quarter, marking the ninth straight quarterly decline as it tries to lure back bargain hunters.

Still, profit beat analyst expectations as international sales, sales at the company's Sam's Club unit and a push to rein in expenses helped offset US same-store sales that came in below analysts' forecasts.

Wal-Mart shares rose 2.3 percent in premarket trading.

The world's largest retailer said on Tuesday that it earned USD 1.09 per share from continuing operations, up from 97 cents a year earlier and near the high end of its forecast of USD 1.05 to USD 1.10.

Excluding a decline in the market value of currency derivatives, acquisition costs and other items, earnings were USD 1.12, compared with the average analyst estimate of USD 1.08, according to Thomson Reuters.

The US Walmart business is the company's biggest by far, accounting for USD 260.3 billion, or 62.1 percent of sales, in fiscal 2011. Customers there have moved to even lower-priced dollar stores as unemployment remains high and inflation cuts into people's spending power.

The company has seen US shoppers trying to save money by buying items like lower-priced detergents as well as smaller packages -- such as a half gallon of milk instead of a gallon, executives said in a recorded message.

Also, more shoppers are relying on government aid to help them pay for food and other necessities.

In May, Wal-Mart said same-store sales at the Walmart chain in the United States, excluding fuel, would be down 1 percent to up 1 percent. Analysts, on average, were expecting a decline of 0.6 percent, according to Thomson Reuters data.

Wal-Mart said US same-store sales improved each month during the quarter. Fewer customers visited Walmart US stores, but those who shopped spent more on average, the company said.

For the year, Wal-Mart expects a profit of USD 4.41 to USD 4.51 a share, compared with its previous forecast of USD 4.35 to USD 4.50. The company forecast a profit of 95 cents to USD 1 for the third quarter.

The goal is still for same-store sales in that unit to turn positive by the end of the year, said Walmart US chief executive Bill Simon.

Wal-Mart shares rose to USD 51.15 in premarket trading from Monday's close of USD 49.98.

Bureau Report



First Published: Tuesday, August 16, 2011, 23:22


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