Third quarter net income for Wal-Mart Stores Inc. dipped 0.7% and fiscal year-to-date net income is down 1.7%, although total revenue in the quarter was up 2.9% and per share net income of $1.15 beat the consensus estimate of $1.12.
Total revenue during the third fiscal quarter (ended Oct. 31) for Bentonville-based Wal-Mart was $119.001 billion, up over $115.688 billion during the same period in 2013 and ahead of the consensus estimate of $118.35 billion. Revenue for the first three fiscal quarters of the year is $354.086 billion, better than the $346.588 billion during the same period of 2013.
"Walmart reported solid earnings per share of $1.15 in the third quarter," Doug McMillon, Wal-Mart Stores president and CEO, said in the earnings report issued early Thursday (Nov. 13). "The highlights for the quarter include the positive comp in Walmart U.S., including the strong performance from Neighborhood Markets, the 21 percent increase in e-commerce sales globally and the profit performances from Sam's Club and our International business."
Although slight, the world’s largest retailer was able to reverse its comp store sales trend with U.S. stores. Same store sales in the U.S. – including Sam’s Club – were up 0.5% compared to a decline of 0.1% during the same quarter of 2013. Same stores sales with Neighborhood Markets – the company’s leading small-store format – were up 5.5%.
"We had several merchandise categories driving top-line growth," Greg Foran, Walmart U.S. president and CEO, noted in the earnings report. "I'm encouraged by our performance during key seasonal events. We had strong back-to-school results in apparel, home and school supplies, and we ended the quarter well by executing a strong Halloween event."
Walmart International total sales were $33.7 billion, up 1.7%. On a same-currency comparison, sales would have been up 2.9%. Overall revenue was diminished by a $396 million hit from unfavorable currency exchange rates.
The company also reported that e-commerce sales worldwide were up 21%.
Operating income at Walmart U.S. is down 1.2% in the quarter and down 2.6% for the year. Operating income at Sam’s Club is up 12% in the quarter and up 1.2% for the year, and Wal-Mart International operating income is up 3.7% in the quarter and up 5.1% for the year.
"We're investing in key areas of our business, including wages in our U.S. stores and in e-commerce and mobile capabilities. We continue to see opportunities to improve our business," McMillon said in the report. "Being the price leader is an ongoing priority for us and a commitment to customers. As with every year, that is even more important during the holiday season. We have some things in our favor this fourth quarter, including lower fuel prices in the U.S. and other key markets, and we're set to deliver for customers during this time."
The company issued fourth quarter per share earnings guidance of between $1.46 and $1.56, and full year per share guidance of $4.90-$5.15. Prior to the earnings report, the consensus estimate among analysts who cover the company was for fourth quarter earnings at $1.57 per share, and $4.99 per share for the full year.
Wal-Mart shares (NYSE: WMT) closed Wednesday at $79.20, up 19 cents. Thursday pre-market activity was pushing the shares to open trading at around $81 per share. During the past 52 weeks the share price has ranged from an $81.37 high to a $72.27 low.
The City Wire will update this story later today.