Sales Drop Again at Walmart

Wal * Mart Supercenter Store front entrance and parking lot in Southeast USA
Visions of America/UIG via Getty Images
By Anne D'Innocenzio

Wal-Mart Stores (WMT) says that its third-quarter profit rose 2.8 percent, but the world's largest retailer reported a sales shortfall as its low-income shoppers feel squeezed around the globe.

The discounter also cut its outlook for the full year and issued fourth-quarter profit guidance that was below analysts' projections.

Wal-Mart is considered an economic bellwether because the retailer accounts for nearly 10 percent of nonautomotive retail spending in the U.S. The latest results show that its American households with lower income are still struggling to juggle daily living costs with stagnant wages.

Against this background, Wal-Mart is raising up its game for the holiday shopping season, which accounts for anywhere from 20 percent to 40 percent of retailers' annual revenues. Like other rivals, the discounter is kicking off the official start earlier into Thanksgiving. It also brought back its holiday layaway program and says it is sharpening prices on key holiday items even more than last year.

"The retail environment, both in stores and online, remains competitive," said Mike Duke, president and CEO of Wal-Mart Stores Inc. in a statement." Wal-Mart has aggressive plans to help our customer enjoy the holiday season."

Wal-Mart said that it earned $3.74 billion, or $1.14 per share in the three-month period ended Oct. 31. That compares with $3.64 billion, or $1.08 per share, in the year-ago period.

Net sales rose 1.6 percent to $114.88 billion, up 1.6 percent in the year ago period.

Analysts were expecting earnings of $1.13 per share on net sales of $116.9 billion.

U.S. Wal-Mart stores, which account for 58 percent of the company's total sales, posted the third straight quarter of declines in a key revenue figure after six consecutive quarters of increases. Revenue at stores open at least a year - considered an important measure of a retailer's performance - fell 0.3 percent at Wal-Mart's U.S. stores. Analysts were expecting the figure to be unchanged.

The overall figure was down 0.1 percent, including a 1.1 percent increase at Sam's Clubs.

The company expects that figure to be unchanged for Wal-Mart's U.S. stores for the fourth quarter.

Overall, total sales increased 2.4 percent for Wal-Mart's U.S. business, 1.1 percent at Sam's Clubs and 0.2 percent at Wal-Mart's international business.

The company said that for the fourth quarter, it expects earnings per share to be in the range of $1.50 to $1.60. It said that results would be hurt by the company's move, announced in late summer, to close 50 under-performing stores in Brazil and China.

The company expects adjusted earnings per share for the fourth quarter to be $1.60 to $1.70.

For the year, Wal-Mart now expects earnings per share to be from $5.01 per share to $5.11 per share. That compares with its forecast made in August of $5.10 and $5.30 per share. That was downgraded from May's forecast.

Wal-Mart expects adjusted earnings per share for the full year to be $5.11 to $5.21.

Analysts expected adjusted earnings of $1.69 per share for the fourth quarter and $5.19 per share for the full year, according to FactSet.

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32 Comments

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hvyw8consulting

Are you kidding me? Walmart is the only reason some people can eat plus the government hand outs go farther there

November 15 2013 at 11:21 PM Report abuse rate up rate down Reply
slverlake3

I do not shop at Wal Mart. I shop at Costco. They pay their employees a living wage and give healthcare.

November 15 2013 at 12:35 PM Report abuse rate up rate down Reply
willypfistergash

LMAO...walmart haters.

November 15 2013 at 12:27 PM Report abuse rate up rate down Reply
pllove49

Oh their sales haven't began to drop good yet...but they will...like everyone elses...because so many people are having it rough...and darn near broke...even people that were no where near broke before...are darn close to it now..

November 14 2013 at 2:07 PM Report abuse rate up rate down Reply
granaryst

Obama is taking us back into a depression. Worst President ever!

November 14 2013 at 11:29 AM Report abuse +1 rate up rate down Reply
toosmart4u

The minimum wage will not be raised for the Republicans hold the purse in the house. They only think of tax breaks for the rich and large corporations while taking benefits away from the poor. No wonder we have so many homeless people WHICH includes some of our veterans.

November 14 2013 at 11:20 AM Report abuse -1 rate up rate down Reply
4 replies to toosmart4u's comment
MARK T

One reason sales dropped is because they cut their staffing in a lot of their stores and they arent keeping shelves stocked. I have complained to the corporate office. If I go to Walmart I first see if there are any checkers. I dont, and wont wait an hour to check out my groceries. There are other grocery stores that have adequate employees ! They have lost a lot of my business.

November 14 2013 at 11:08 AM Report abuse +2 rate up rate down Reply
Iselin007

Lower increases in SSI and the healthcare nightmare only add to the already complex failures of the economy on Main Street.

Wall St is going in the opposite direction of the middle and lower classes. We been down so long will be layering Great Recessions on Great Recessions.

November 14 2013 at 11:08 AM Report abuse +2 rate up rate down Reply
Iselin007

A cut in food stamps must of been quite a blow to the chain. Less unemployment benefits and welfare cuts reduces the targeted shoppers. Carts are less full now with each trip so profits go down.

November 14 2013 at 11:00 AM Report abuse +2 rate up rate down Reply
savannahswithgod

I got no cheaper place to shop. Krogers which prices run about the same. Now and then you can catch something trivial at the Dollar General. You'd think we'd have everything in the world here with Toyota mfg sitting out there. But we don't. Of course if worked at Toyota don't think I'd be worrying much about where I shopped. And if anyone on this comment line worked there don't think they would either. Everybody can't work at Toyota, everybody can't be a doctor. Some have to do the little jobs for little pay. The Gov and Biz world has left out the survival of the ones with little pay. It will work it's way up to the non-survival of the Gov and Biz world. Greed plain and simple has destroyed us.

November 14 2013 at 10:26 AM Report abuse +1 rate up rate down Reply