Home Depot’s Q3 profit up 12%
Atlanta — Home Depot Inc. reported Tuesday that net income in the third quarter rose 12% to $934 million, compared with $834 million in the year-ago period. Storm-related repairs and spending on home projects gave the home-improvement retailer a third-quarter boost.
Revenue rose 4% to $17.33 billion from $16.6 billion last year, beating Wall Street’s expected $17.11 billion in revenue.
Same-store sales rose 4.2% globally and 3.8% in the United States.
Saks Q3 profit plummets, but beats Street
New York City — Saks Inc. reported Tuesday that profit for the quarter ended Oct. 29 slid to $17.8 million from $36.3 million a year earlier, still beating Wall Street expectations. Last year’s results were boosted by a large tax reserve-related gain.
Revenue rose 5% to $692.3 million from $658.8 million, surpassing analysts’ predictions of $690.6 million. Results were boosted by more full-price selling and fewer promotions.
Walmart turns the comps corner as holidays arrive
BENTONVILLE, Ark. — Walmart delivered a long awaited same-store sales increase of 1.3% at its U.S. stores division in the third quarter and pointed to ongoing momentum for the holidays with comps guidance in the range of flat to up 2%.
The improved sales performance and favorable guidance offered some vindication for a company that had posted negative quarterly results for more than two years. Walmart spent much of this year repositioning its domestic business and was intent on demonstrating the return to its core strategy of offering everyday low prices on a broad assortment of merchandise would resonate with shoppers and produce sales growth even in a challenging economy.
The 1.3% comps increase exceeded the upper end of the company’s guidance range that called for a 1% increase and contributed to third-quarter earnings per share of 97 cents, which was two cents better than the prior year when earnings of 95 cents a share were inflated by a tax benefit of five cents a share. Despite the improvement, the figure was a penny shy of analysts’ consensus estimate of 98 cents, but squarely within the company’s guidance range that called for earnings per share of 95 cents to $1.
Wal-Mart Stores Inc., president and CEO Mike Duke characterized the earnings growth as solid and said each of the company’s business segments – U.S. stores, International, Sam’s Club – is stronger today than it was a year ago.
“Both Walmart U.S. and Sam’s Club exceeded comp-sales guidance, and I’m pleased that the sales momentum positions us exceedingly well for the holidays,” Duke said. “We also are pleased with the growth in both sales and operating income for Walmart International.”
Looking ahead, Walmart said it expects fourth quarter earnings in a range of $1.42 to $1.48, which encompasses analysts’ consensus estimate of $1.45 per share. The third-quarter earnings miss and fourth-quarter guidance that bracketed analysts’ estimate underwhelmed the market and in early trading shares of Walmart, which had touched a new 52-week high of $59.40 the prior week, were down more than $1 from Monday’s closing price of $58.89.
Expectations have become elevated for Walmart in recent months as the company openly discussed improving momentum at various segments of its U.S. business thanks to strategies put in place beginning in mid-2010 that were gaining traction.
“Three key elements drove the comp improvement in the third quarter,” said Bill Simon, Walmart U.S. president and CEO. “Our focus on expanded assortment, product innovation and local relevance improved merchandise offerings throughout the store and customers responded. Productivity initiatives improved in-stock levels, and we continue to drive price leadership in all our stores.”
While comps were up in the third quarter, the increase was driven by an increase in average transaction size as overall customer traffic was lower than the prior year. However, in a nod to the momentum the company said is building, it was noted that third-quarter customer traffic had improved when compared to the second quarter. Total sales at U.S. stores increased 2.7% to $63.8 billion.
One of the biggest bright spots for Walmart continues to be the Sam’s Club division where same store sales advanced 5.7% without the benefit of higher fuel prices. Sam’s Club sales increased 6.2% to $11.8 billion, excluding fuel.
“This is our seventh quarter of sequentially increasing comps, and we expect that sales momentum to remain strong,” said Sam’s Club president and CEO Brian Cornell.
The warehouse club division expects fourth-quarter comps, excluding fuel, to increase between 4% and 6%.