Sales at Wal-Mart Stores Inc’s US discount stores open at least a year fell 0.9 per cent during its second quarter, marking the ninth straight quarterly decline as it tries to lure back bargain hunters.Still, profit beat analyst expectations as international sales, sales at the company’s Sam’s Club unit and a push to rein in expenses helped offset US same-store sales that came in below analysts’ forecasts.
Wal-Mart shares rose 2.3 per cent in premarket trading.The world’s largest retailer said on Tuesday that it earned $1.09 per share from continuing operations, up from 97 cents a year earlier and near the high end of its forecast of $1.05 to $1.10.Excluding a decline in the market value of currency derivatives, acquisition costs and other items, earnings were $1.12, compared with the average analyst estimate of $1.08, according to Thomson Reuters I/B/E/S.
The US Walmart business is the company’s biggest by far, accounting for $260.3 billion, or 62.1 per cent of sales, in fiscal 2011. Customers there have moved to even lower-priced dollar stores as unemployment remains high and inflation cuts into people’s spending power.
The company has seen US shoppers trying to save money by buying items like lower-priced detergents as well as smaller packages - such as a half gallon of milk instead of a gallon, executives said in a recorded message. Also, more shoppers are relying on government aid to help them pay for food and other necessities.In May, Wal-Mart said same-store sales at the Walmart chain in the United States, excluding fuel, would be down 1 per cent to up 1 per cent. Analysts, on average, were expecting a decline of 0.6 per cent, according to Thomson Reuters data.Wal-Mart said US same-store sales improved each month during the quarter. Fewer customers visited Walmart US stores, but those who shopped spent more on average, the company said.
For the year, Wal-Mart expects a profit of $4.41 to $4.51 a share, compared with its previous forecast of $4.35 to $4.50. The company forecast a profit of 95 cents to $1 for the third quarter.
From / Gulf Today