Wal-Mart sales perk up ahead of holiday
NEW YORK (AP) – Wal-Mart Stores Inc. eked out a rare gain in an important sales measurement during the third quarter as it reported profits that beat Wall Street expectations Thursday.
But the world’s largest retailer issued a fourth-quarter profit outlook that missed estimates because of expected fierce holiday discounting. The quarter also marked two full years of traffic declines at U.S. Wal-Mart stores.
Macy’s, J.C. Penney and Kohl’s all reported results this week that show shoppers remain cautious heading into the holiday shopping season.
Wal-Mart itself is a barometer of consumer spending, and its challenges reflect the struggles of its low-income shoppers, who are being squeezed by stagnant wages and reduced government food stamps. But Wal-Mart sees potential help: Lower gas prices that could put more money into shoppers’ pockets.
To win its share of its holiday dollars, Wal-Mart announced an aggressive plan that includes free shipping on the top 100 items and price cuts on 20,000 items.
Starting Friday, Wal-Mart will match online prices such as Amazon’s in its stores. Managers of half of its stores were already doing that, but now it’s an official policy.
“Being the price leader is an ongoing priority for us and a commitment to our business,” said Doug McMillon, who took over as CEO in February. “And with every year, that is even more important during the holiday season.”
He added that while he’s encouraged by the sales increase at its Wal-Mart stores, he’s still not satisfied with the performance.
Wal-Mart reported earnings of $3.71 billion, or $1.15 per share, for the three months that ended Oct. 31.