The world's largest retailer, Wal-Mart Stores, posted a modest 3. 8 percent in profit growth on Monday but said it expects electronics and...
LITTLE ROCK, Ark. — The world’s largest retailer, Wal-Mart Stores, posted a modest 3.8 percent in profit growth on Monday but said it expects electronics and other general merchandise to propel it to a healthy holiday season, though spending may slacken when the bills come due early next year.
Income rose to $2.4 billion, or 57 cents per share, for the quarter ended Oct. 31 from $2.3 billion, or 54 cents per share, a year ago. Earnings in the latest quarter included three items, including hurricane-related costs, which reduced results by $80 million, or 2 cents per share.
Sales were $75.4 billion, up 10.1 percent from $68.5 billion in the third quarter of fiscal 2005. Sales at stores opened at least a year, known as same-store sales, rose a modest 3.8 percent. Same-store sales are considered an important measure of a retailer’s health because they don’t inflate overall growth from new store openings.
Wal-Mart shares rose 30 cents to close at $49.30 Monday.
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In a conference call with investors, Wal-Mart Chief Executive Lee Scott didn’t address criticism the company has come under for labor and other practices except to note Wal-Mart’s critics had some praise for the retailer’s response to Hurricane Katrina. Scott said Wal-Mart sustained sales despite the hurricanes, gasoline prices that skyrocketed in the quarter and higher home-heating bills. The hurricanes — Katrina, Rita and Wilma — closed hundreds of Wal-Mart stores, at least temporarily, but Wal-Mart’s third-quarter numbers held up.
After a slow start to the Christmas season last year, Wal-Mart has promised to be more aggressive with discounts and its push to get shoppers to buy early for the 2005 season.
Wal-Mart forecast fourth-quarter earnings of 82 cents to 86 cents per share, $2.64 to $2.68 for the year.
Wal-Mart also plans to open or expand 484 stores across the United States next year, over 100 more than previously disclosed, according to an internal document obtained by a leading Wal-Mart opponent and released on Monday.
Wal-Mart Watch is a Washington, D.C.-based group backed by unions and environmental and other interests. Wal-Mart confirmed that the document belonged to it.
“This report is simply a listing of all stores we expect to open over the next 12 to 14 months, and many are already under construction,” Wal-Mart spokesman Marty Heires said. According to the document, stores are planned for Washington in Chelan and Federal Way.