Wal-Mart profit slips despite strong sales

Wal-Mart reported Tuesday a drop in profits for its fiscal third quarter but sales powered higher ahead of the crucial year-end holiday shopping season. Wal-Mart, the world's biggest retailer, said net income was $3.3 billion in the third quarter ending October 31, a decline of 2.9 percent from the same quarter in 2010. Earnings per share of 96 cents missed analysts' average forecast of 98 cents. But net sales leaped to $110.2 billion from $101.9 billion last year, beating market expectations. The quarterly sales included $2.1 billion in sales from acquisitions in Britain and South Africa and a benefit of $1.3 billion from currency exchange, the discount chain said. "Every business segment is stronger today than it was a year ago," said Mike Duke, Wal-Mart Stores, Inc. president and chief executive, said in a statement. In the United States, the company's biggest market by far, Walmart US sales were up 1.3 percent and sales at Sam's Club, a members-only chain, grew 9.0 percent. Duke noted that both Walmart US and Sam's Club outstripped the company's growth forecast for "comp" sales -- sales in stores open for at least a year. "I'm pleased that the sales momentum positions us exceedingly well for the holidays," he said. Duke said that Walmart US stores would continue a strategy of investing in low prices for the holidays in response to the struggling US economy. "The economy continues to weigh on Walmart US customers," the retail giant said. Walmart International increased net sales by about 20 percent to $32.4 billion for the quarter, the Bentonville, Arkansas-based company said. "We continue to see strong consumer demand in emerging markets," Duke said. For the fiscal fourth quarter, Wal-Mart forecast earnings per share in a range of $1.42 and $1.48, compared with the year-ago EPS of $1.41. Fiscal full-year earnings per share were forecast between $4.45 to $4.51, up from $4.18. The company's EPS guidance was in line with the average analyst estimate of $1.45 for the fourth quarter and $4.49 for the year.