FINANCE

Wal-Mart’s Q3 sales up but profits slip 2.9%

BY Katherine Boccaccio

Bentonville, Ark. — Wal-Mart Stores Inc. on Tuesday posted the first quarterly revenue gain in its U.S. namesake business in more than two years, but the discounter’s profit was down 2.9%. Profit for the quarter ended Oct. 31 was $3.33 billion, missing Wall Street expectations.

Revenue overall rose 8.2% to $109.5 billion, beating analysts’ predicted $108.86 billion. Most notably, the retailer recorded a 2.7% revenue rise in its U.S. Wal-Mart division, reversing nine consecutive quarters of sales declines. Sales at its Sam’s Club division rose 9.5%, and international sales surged 20.3%.

Same-store sales at Wal-Mart’s U.S. namesake division rose 1.3%, beating estimates for a 0.3% increase.

Wal-Mart has been working to rekindle U.S. sales, which account for 62% of its total revenue. Some of its strategies include inventory restoration, a return to everyday low pricing and holiday programs that include a Christmas price guarantee, layaway services and free online shipping.

“The plan is working," said Mike Duke, CEO of Wal-Mart, in a pre-recorded call released Tuesday. "Customers are responding favorably."

Like most retailers, Wal-Mart is counting on the upcoming holiday shopping season to help get cost-conscious shoppers spending.

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Dick’s delivers early gift to shareholders

BY CSA STAFF

PITTSBURGH — Dick’s Sporting goods gave its shareholders a holiday surprise Tuesday morning when the company reported better-than-expected third-quarter results, increased its full-year guidance and declared its first ever dividend.

Sales for the quarter ended Oct. 29, increased 9.3% to $1.2 billion thanks largely to a 4.1% comp increase combined with the opening of 19 new stores. The 4.1% comps increase consisted of a 3.8% increase at Dick’s Sporting Goods stores, a 2.4% increase at Golf Galaxy stores and a 16.8% increase in Dick’s e-commerce business. The sales momentum, which is somewhat surprising given the discretionary nature of the product categories Dick’s offers, resulted in improved profits. The company’s earnings per share surged 45% to 32 cents compared with 22 cents the prior year and well ahead of earlier guidance in the range of 24 cents to 26 cents.

“In the third quarter, we generated sales and earnings meaningfully above our expectations while increasing our margins and further strengthening our balance sheet,” said Ed Stack, Dick’s chairman and CEO.

The solid third-quarter performance also prompted the company to take a number of other actions, including elevating its full-year profit forecast and initiating an annual dividend of 50 cents. Full-year earnings per share are now expected in a range of $2.01 to $2.03 compared with prior guidance of $1.94 to $1.96. Dick’s is well positioned from a balance sheet perspective with $483 million in cash and equivalents and no outstanding borrowings.

“Our board’s decision to initiate a dividend demonstrates its confidence in the company’s financial strength and growth potential,” Stack said. “Our solid cash position and cash flow outlook enable us to continue to invest in future profitable growth opportunities, while also returning cash to our shareholders through the dividend.”

Dick’s ended the quarter with a total of 474 Dick’s Sporting Goods stores in 42 states and 81 Golf Galaxy stores in 30 states following the completion of a store development program that saw the addition of 36 Dick’s stores.

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FINANCE

TJX Q3 net income rises 15%, maintains profit outlook

BY Katherine Boccaccio

Framingham, Mass. — TJX Cos. reported Tuesday that profit for the quarter ended Oct. 29 rose 15% to $406.5 million, from $372.3 million a year earlier.

Sales increased 5% to $5.79 billion from $5.53 billion, but missed analysts’ expected $5.84 billion. Same-store sales rose 3%.

During the quarter, the retailer increased its store count by a net of 52 stores and increased square footage by 1% over the same period last year.

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