NEW YORK (AP) — Walmart extended its string of strong quarterly profits into the holiday season as its low prices attract shoppers looking for deals in a tough economic environment.
The company, based in Bentonville, Arkansas, reported better-than-expected financial results for the period. It raised its annual outlook, although it was slightly lower than analysts expected. Shares fell about 3% in premarket trading.
The country’s largest retailer is among the first batch of major US retailers to report quarterly results. Industry analysts are analyzing the data to try to shed more light on how consumers are feeling as the holidays approach.
Buyers remain flexible due to the strong labor market and stable wages. This has confused economists and Federal Reserve officials and sometimes does not match the strong sentiments that Americans themselves have expressed in opinion polls. But higher prices on food and other necessities, though easing, as well as higher borrowing costs for homes and cars, are weighing on household budgets.
This is starting to be reflected in the retail sales numbers.
Americans cut back on retail spending in October, ending six consecutive months of gains and retail sales fell 0.1%, the U.S. Commerce Department said this week.
Target on Wednesday reported a big increase in third-quarter profit, but a more than 4% decline in revenue, largely as customers frustrated by higher costs stopped spending.
Sales at Home Depot, the nation’s largest home improvement chain, also declined as homeowners postponed major renovations and purchases of big-ticket items like appliances, which are often purchased on credit.
Walmart reported profit for the three-month period ending Oct. 31 was $453 million, or 17 cents per share. That compares with a loss of $1.79 million, or 66 cents per share, in the year-ago period. Adjusted earnings per share results were $1.53 per share.
Revenue rose 6.1% to $160.84 billion, from $152.81 billion in the year-ago period.
Analysts had expected $1.52 a share on sales of $159.651 billion, according to FactSet estimates.
Comparable store sales – from established stores and online operations over the past 12 months – rose 4.9% for the Walmart US division for the quarter. They rose 6.4% last quarter. Global e-commerce sales grew 15%.
The company expects annual sales to grow 5% to 5.5%. It expects adjusted earnings per share of $6.40 to $6.48. Analysts had expected $6.50 a share on sales of $642.32 billion.
Anne D’Innocenzio, The Associated Press