Wal-Mart Stores, the world’s largest retailer, has raised its forecast for 2011 earnings after it reported a jump in quarterly profits.
The US retail giant said today (16 August) that it now sees annual earnings per share reaching US$4.41-4.51, compared to a forecast it made in February of $4.35-4.50.
CFO Charles Holley said the new guidance “reflects our confidence in the business for the back half of the year”.
Wal-Mart had reported a 12.4% increase in earnings per share from continuing operations of $1.09 for the three months to 31 July. Net income was up 5.1% to $3.94bn, while operating income rose 3.1% to $6.38bn.
The retailer, meanwhile, reported a 5.5% increase in net sales to $108.64bn. Sales in the US inched up 0.4% to $64.89bn.
Wal-Mart’s comparable-store sales in the US fell for the ninth successive quarter, dipping 0.9%.
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By GlobalDataHowever, president and CEO Mike Duke said sales from the company’s US stores were improving. “I’m encouraged by the sales improvement in our Walmart U.S. stores. Comp sales have increased sequentially month to month within the quarter. In fact, this was the best quarterly performance since the third quarter of fiscal 2010.”
Wal-Mart has been hit by falling demand in the US for big-ticket, non-food items. However, Bill Simon, president of Wal-Mart’s US operations, said he was “encouraged” by the company’s “sales momentum” in its home market.
“I’m encouraged by the sales momentum we have from the second quarter. Our grocery and health and wellness business, representing two-thirds of our sales continued to deliver positive comps. Our hardlines and apparel businesses are improving,” Simon said. “We remain concerned about the economic pressure on our customers and the uncertain impact it can have on their shopping behavior. With this volatility, it is as important as ever to deliver on Walmart’s one-stop shopping promise for broad assortment and every day low prices.”
Wal-Mart’s international sales climbed 16.2% to $31bn. The weakness of the US dollar boosted Wal-Mart’s sales outside its domestic market by $2.3bn. Sales from Sam’s Club, the retailer’s wholesale chain, increased 9.5% to $13.65bn.
Shares in Wal-Mart were up 3.62% at $51.79 at 09:45 ET.