Walmart Says Profit Rose 3.2%, Forecasts Little-Changed Sales
Wal-Mart Stores Inc., the world’s largest retailer, reported third-quarter profit rose 3.2 percent, helped by inventory management, and forecast sales for the fourth quarter would be little changed.
Net income increased to $3.24 billion, or 84 cents a share, in the period ended Oct. 31, from $3.14 billion, or 80 cents, a year earlier, the Bentonville, Arkansas-based company said today in a statement. Analysts predicted 81 cents, the average of 24 estimates compiled by Bloomberg.
Walmart has accelerated efforts to trim expenses under Chief Executive Officer Mike Duke as decelerating food costs and the worst U.S. unemployment rate in 26 years muted sales gains. Price reductions on bananas, vitamins and laptop computers lured new customers seeking bargains.
“Management is intensely focused on lean inventory management,” Robert Drbul, an analyst at Barclays Capital in New York, wrote in a Nov. 10 note to clients. “We expect Walmart to remain aggressive on price throughout the holidays, particularly in key holiday items such as fresh, toys and electronics.”
Drbul rates Walmart stock “overweight.”
The U.S. jobless rate will exceed 10 percent through the first half of 2010, according to a monthly Bloomberg News survey of economists. The rate jumped to 10.2 percent in October, the highest level since 1983, according to a Labor Department report on Nov. 6.
Lower food prices reflect a global oversupply of meat and milk during the recession. Meat costs, excluding poultry, may rise as much as 0.5 percent or fall that much this year, the U.S. Department of Agriculture said last month. It predicted price drops of 6 percent to 7 percent for dairy products and declines of 0.5 percent to 1.5 percent for fresh fruits and vegetables.
Walmart rose 66 cents to $52.97 yesterday in New York Stock Exchange composite trading. The shares have slumped 5.5 percent this year.
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