Retailer Wal-Mart Stores, Inc. (NYSE:WMT), reported a rise in same-store sales for the first time covering a period of 7 quarters. The company’s new and existing stores generated a quarterly sales of about $119 billion, up from $112 billion, pushed by demand for apparel and home goods. A 5.5% comparable sales growth in the company’s Neighborhood Market outlets also helped. WalMart’s Neighborhood Market is the company’s smaller format stores that the company established to counter the sluggish business in its Supercenters.
Drop in gasoline prices, now running at $3 a gallon, is a significant factor for the rise in sales. Wal-Mart Stores, Inc. (NYSE:WMT)’ core customers are low-income and highly sensitive to any change in their capacity to spend. In a phone call with CNNMoney, WalMart Vice President of Investor Relations Carol Schumacher noted that the price drop in fuel will be beneficial for the company’s customers without regard to income levels.
Wal-Mart Stores, Inc. (NYSE:WMT), however, warned that it is preparing for a sluggish holiday season in view of competition coming from online rivals. To account for this, the U.S.’ largest retailer has directed store managers to match up prices with online retailers such as Amazon.com, Inc. (NASDAQ:AMZN). WalMart’s U.S. business head Greg Foran said the directive is meant to formalize a practice that is already being done in nearly half of its approximately 4300 stores.
Wal-Mart Stores, Inc. (NYSE:WMT) projected a full year earnings per share at the range of $4.92 to $5.02, as against analysts estimates of $4.99 per share. Initial company forecast pegged the amount at $5.15. For the quarter ended October 31, net profit declined to $3.71 billion from $3.74 billion a year earlier, a profit of $1.15 from $1.14, beating Thomson Reuters expected earnings of $1.12 per share.
This article has been written by Nonito Guntan.