Wal-Mart (WMT) is showing why it's the worlds' leading retailer again, as they posted great third-quarter earnings that exceeded expectations. Earnings came in at $2.86 billion, a strong 8 percent over last year at this time.
Revenue for the period finished at $91.95 billion of the quarter ending on October 31. That's an 8.8 percent icrease over last years' $84.47 billion.
This is huge news coming into the holiday season, as last year Wal-Mart had its worst season ever for the holidays.
Same-store sales last year were in the negative, the first time that had happened in 10 years, as they took their eye of their core customer and attempted to go upscale with clothing and home decor. Realizing their mistake, they're now going on all cylinders in zeroing in on the demographic they know and serve so well.
Craig R. Johnson, president of consultancy Customer Growth Partners, said concerning the quarterly results, "My sense is that they are on the turnaround trail and that they will have a decent, a solid if not spectacular Christmas."
What could possibly surprise people for the holiday season for Wal-Mart, is how many customers may come to the store who usually don't, because of tightening up their wallets from concerns over credit, subprime mortgages and higher energy prices. If they trade down to Wal-Mart, they could perform even better than decent for the season.
President and Chief Executive Officer Lee Scott said in a recorded call Tuesday that "During the Christmas and holiday season, our price leadership position will benefit both our customers and the company. We have set the stage for a successful fourth quarter."
For the quarter Wal-Mart earned 70 cents a share, up from the 62 percent the had last year. Expectations wer they would reach 67 cents a share for the quarter, based on revenue of $91.67 billion.
Wal-Mart's guidance for the fourth quarter is higher than analysts project, as they are expecting earnings between 99 cents to $1.03 a share, with earnings for the whole year reaching between $3.13 and $3.17 a share. Analysts are looking for $1.02 for quarterly earnings and $3.09 a share for the year.
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» Online Retailers Must Pay Attention to Discounting This Year from TheAlphaMarketer
Three major things have happened this year that will require the vast majority of retailers (including online retailers) to discount this year: they are subprime concerns, credit crunch and higher energy prices (including but not limited to oil). All o... [Read More]
Tracked on: November 13, 2007 6:46 PM | Permalink to Trackback