Wal-Mart Stores’ shares slid after it today (15 November) posted a third-quarter drop in operating income.
Shares fell 1.34% to US$58.10 at 13:54 BST after the world’s biggest retailer announced an income from continuing operations of US$3.3bn for the quarter ending 28 October, down from US$3.4bn in the same period last year.
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Net sales for the quarter were US$109.5bn, an increase of 8.2% from last year, while operating income was US$5.8bn, up from US$5.6bn in the 2010 same-year period.
Both Wal-Mart US and Sam’s Club, the company’s membership-only warehouse retailer, exceeded comparable sales guidance for the quarter. They were up up 1.3% and 5.7% respectively, beating a forecasted -1% to 1% and 3% to 5%. Wal-Mart International increased net sales 20% to US$32.4bn for the quarter, which included the benefit from acquisitions and currency exchange translation, and grew operating income by 10.3% to US$1.39bn.
“Every business segment is stronger today than it was a year ago, and we delivered solid earnings growth for our shareholders in the third quarter,” said Mike Duke, Wal-Mart Stores’ president and chief executive officer.
“Both Wal-Mart US and Sam’s Club exceeded comparable sales guidance, and I’m pleased that the sales momentum positions us exceedingly well for the holidays. We also are pleased with the growth in both sales and operating income for Wal-Mart International.”
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By GlobalDataDuke said the economy “continues to weigh” on customers, but announced the company’s strategy of investing in low prices will continue.
“We are committed to leveraging expenses again this year. Our overall performance reflects Walmart’s strategy of driving the productivity loop, reducing expenses and investing in price,” Duke said.
Bill Simon, Wal-Mart US president and chief executive officer, said the company expects robust business in the holiday season.
“We will continue to execute our price investment strategy,” Simon added. “The holiday season is under way and we’re aggressively going after the business.”
