'Difficult Times…Wal-Mart Times'
Staff Staff -- Furniture Today, November 17, 2008
Despite a 10% boost in third-quarter earnings, Wal-Mart Inc. lowered expectations for full-year profits last week, pointing to the impact of a stronger dollar on its international results.
Wal-Mart now projects earnings per share from continuing operations for the full year to be from $3.42 to $3.46. Previously, the company expected fiscal year earnings of $3.43 to $3.50.
During a recorded call about the quarterly results, Tom Schoewe, cfo, said that foreign currency exchange will impact full-year earnings by approximately 6 cents per share.
The home department merited only a passing reference during the call, when ceo of U.S. operations Eduardo Castro-Wright noted the category's performance had improved, along with hard lines. He also said inflation is running in mid-single digits in the category, as it is in apparel.
The U.S. operation recorded a 2.7% comp increase, although traffic remained flat. Sales rose 6.1% to $61.2 billion.
Total corporate sales for the quarter ended Oct. 31 were $97.6 billion, up 7.5% from $90.8 billion in the year-ago period.
Earnings climbed to $3.14 billion, or 80 cents per share, compared to $2.86 billion, or 70 cents per share, in last year's third quarter.
Although Wal-Mart lowered expectations, Castro-Wright said he was optimistic about the fourth quarter. "These are difficult times, but these are Wal-Mart times," he said.
Wal-Mart Stores, Inc.
|Qtr. 10/31 (millions)||2008||2007||% change|
|a. Net sales; does not include membership and other income.
b. Includes operating, selling, general and administrative expenses.
|Oper. Income (EBIT)||5,292||4,961||6.7|
|Per share (diluted)||0.80||0.70||14.3|
|Average gross margin||24.1%||23.8%||--|
|Oper. Income (EBIT)||16,421||15,076||8.9|
|Per share (diluted)||2.43||2.11||15.2|
|Average gross margin||23.8%||23.5%||--|
Furniture Today's Ray Allegrezza Speaks with Stephen Bogart about Fine Furniture's New Bogart Line