Bentonville, Ark. Wal-Mart Stores on Thursday reported second-quarter income virtually unchanged from a year ago, but its results beat Wall Street expectations. The discounter also forecast full-year earnings that could beat Wall Street estimates as it benefits from a series of cost-cutting moves, particularly from inventory controls, and continues to draw frugal shoppers away from rivals.
Wal-Mart earned $3.44 billion in the quarter ended July 31, compared with $3.45 billion in the year-ago period. Revenue fell 1.4% to $100.08 billion. But same-store sales slipped 1.2% during the period, compared with a 4.3% gain in the year-ago period, when sales were boosted by government stimulus checks.
"In a sales environment more difficult than we expected, we managed our operations in a disciplined manner," Mike Duke, Wal-Mart’s president and CEO, said in a statement. "Our U.S. segments delivered strong inventory performance, which contributed to the company's healthy increase in year-over-year earnings. We are accelerating our focus on reducing our expenses."
Wal-Mart officials cautioned that the economy will continue to remain difficult in coming months, forcing their shoppers to keep buying less-expensive store-label products and smaller-pack sizes.
"Overall, our customers are more disciplined in their spending," Duke told investors during a pre-recorded call Thursday. "There's a new normal" of saving more and spending less, he added.