Wal-Mart Stores Inc. tops profit estimates

Retailer is facing pressure from the strong U.S. dollar and increasing competition

NEW YORK— Wal-Mart reported improved customer traffic and an uptick in a key sales figure as it topped earnings expectations in the third quarter, even as a stronger dollar pressured its performance overseas.

The world’s largest retailer also forecast a fourth-quarter earnings range that largely exceeds analyst expectations and narrowed its full-year outlook after cutting it in August.

Wal-Mart’s net income fell 11 per cent to $3.3 billion (U.S.) in the quarter ended Oct. 31, but its earnings per share of $1.03 topped Wall Street expectations.

The average estimate of 13 analysts surveyed by Zacks Investment Research was for earnings of 97 cents per share.

Revenue slipped to $117.42 billion from $119 billion. On a constant currency basis, revenue totalled $122.4 billion. Nine analysts surveyed by Zacks expected $117.82 billion.

The retailer has been pressured on several fronts so far this year. A strong U.S. dollar has affected results. The company is also facing increased competition from Amazon.com and dollar stores, while profits have been squeezed by pay raises for workers and efforts to improve its stores.

Sales at U.S. stores open at least a year rose 1.5 per cent in the third quarter, the fifth-straight quarterly increase.

This figure is a key gauge of a retailer’s health because it excludes results from stores recently opened or closed. Traffic climbed 1.7 per cent.

Wal-Mart Stores Inc.’s international segment reported net sales dropped 11 per cent to $29.81 billion. Net sales were $34.7 billion on a constant currency basis.

For U.S. stores, quarterly net sales gained nearly 4 per cent to $72.71 billion.

Wal-Mart also on Tuesday narrowed its forecast for full-year earnings to a range of $4.50 to $4.65, after cutting that outlook in August to $4.40 to $4.70 per share.

Analysts expect, on average, $4.50 per share, according to FactSet.