Bentonville, Ark. Wal-Mart Stores said Thursday it posted better-than-expected earnings for the third quarter, due to effective cost-cutting measures, but same-store sales dipped amid the downturn.
Profit for the quarter ended Oct. 31 rose 3% to $3.23 billion, compared with $3.14 billion a year earlier and beating Wall Street expectations.
Revenue rose to $99.4 billion from $98.3 billion, just missing the Street, which expected revenues of $99.9 billion. But Wal-Mart same-store sales fell 0.4%, not including the impact of fuel. For the same period a year ago, same-store sales increased 2.5%.
“The sales environment continued to be difficult this quarter,” Mike Duke, Wal-Mart’s president and CEO, said in a statement. “But customer traffic is up throughout the company.”
Continued challenges potentially lie ahead for the world’s largest retailer, as the company forecast fourth-quarter earnings during the key holiday quarter that could miss Wall Street estimates as its customers face rising unemployment.
"Customers continue to tell us they're concerned about their own finances and unemployment," Wal-Mart U.S. chief Eduardo Castro-Wright said. "We recognize that some customers may be more cautious in their holiday spending."
Within each division, Wal-Mart's U.S. namesake stores posted a 1.2% sales increase to $61.81 billion in the third quarter, while Sam's Club division generated revenue of $11.55 billion, down 0.7%.
The company's international division saw a sales increase of 1.6% to $25.3 billion. On a constant currency basis, international sales increased 12.1% to $27.92 billion.
The company expects U.S. comparable-store sales for the 13 weeks ending on January 29, 2010, to be flat, plus or minus 1%.