Wal-Mart turns sales around, but profit falls short

The retailer finally stops a slide in US revenue and is positioning itself for a strong holiday.

By Kim Peterson Nov 15, 2011 9:01AM
Wal-Mart (WMT) can breathe a sigh of relief.

The retailing giant has finally ended nine straight quarters of falling U.S. sales. For the third quarter, same-store sales rose 1.3% -- more than analysts expected.

Even during the quarter, it was unclear whether Wal-Mart would be able to stop that slide.

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The company had said that things could go either way, projecting same-store sales that could be down 1% to up 1%. Analysts were expecting a 0.3% gain.

Sales also beat expectations, rising 8.2% from the year-ago period to $109.5 billion. Wall Street was looking for $108.9 billion. The profit picture was not as rosy, falling nearly 2.9% to $3.3 billion, or 96 cents a share, for the quarter ended Oct. 31. Analysts were expecting 98 cents a share.

Wal-Mart suffered this year as unemployment lingered above 9%. The company's core base of working-class shoppers has struggled in the fitful economic recovery, with many still without work or living from paycheck to paycheck.

The company lost customers to dollar stores and supermarkets. Part of that exodus was its own fault, as Wal-Mart moved away from its everyday low pricing strategy to one that promoted specific items. The company has since returned to the everyday-low-prices model.

Wal-Mart also alienated customers in a move to declutter stores. The company pulled merchandise that shoppers had grown accustomed to, which backfired.

The company seems determined to continue improving same-store sales in the holiday quarter. It has launched a price-matching program for shoppers who find better merchandise deals at other stores. It's also testing small pop-up shops with display items that can be ordered at the store from walmart.com.

For the full year, Wal-Mart gave an earnings outlook of $4.45 to $4.51 a share from continuing operations. That's slightly lower than the $4.50 that analysts were expecting.

Tags: WMT
36Comments
Nov 15, 2011 11:55AM
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walmart has gotten rid of the things we like to buy and try fo force generic brands on people and most of them are bad.  they don't sell alot of made in the USA products.  there prices have gotten too high on alot of things.  I think they train there associates to ignore the guest, who are the ones who make there paycheck possible.  so we go without or we go elsewhere.
Nov 15, 2011 12:21PM
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Walmart is one of the welfare corporate mamas. It's one of the country's biggest employers, yet provides the vast number of its employees no benefits and minimum pay. Local and state governments pick up the slack in its employees' meager pay and lack of health care. In other words the taxpayer takes care of its employees so that it can make more profits! It is a wonderful example of corporate welfare!

 

It played a key role in outsourcing millions of manufacturing jobs in the last 20 years, being the primary cheerleader in sending those jobs straight to China and the Far East. It first encouraged and later cajoled its suppliers to manufacture anywhere but in the U.S.  So it helped eliminate jobs that once paid living wages and provided pensions and health care to millions of Americans who didn't work for it! The U.S. garment industry is hardly even a ghost of itself. Numerous other consumer products manufacturers no longer produce here. This outsourcing spilled over into other heavier industries.

 

We have nothing to thank Walmart and its right wing radical Walton slave drivers for, except the mess that this country is in. They are one of the major reasons for it.  As far as I am concerned, they are the most un-American company out there. The Waltons are traitors to the American people. Too bad their sales don't dive even faster than what they are!

 

If you shop at Walmart, you may as well ship your money straight to the Chinese government!

Nov 15, 2011 12:07PM
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There should be NO ONE shopping at walmart due to the way theytreat their employees and customers.

Walmart is a bad company, depriving their employees of good pay, benefits, health care and they practice discriminatory practices as we all know

 

BOYCOTT WALMART.

 

Shop elsewhere.

Nov 15, 2011 12:26PM
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Remember years ago when Walmart started running ads, and all their "Made in USA" products? I'm not sure if back then anyone ever checked where their products were made, I know I didn't, but I do now, and will not buy something that's not US made. So naturally, I don't shop at Walmart.  Everyone complains about the economy, and rightfully so, but it's not going to get any better as long as our imports dominate our exports. Buying foreign made goods is like shooting ourselves in the foot, so if we want our country to get back on it's feet and be strong again we have to invest in it and buy US goods. They may cost a little more, but buying foreign goods costs more in the long run, and everyone pays. 
Nov 15, 2011 12:53PM
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our family stopped shopping at Walmart as all they sell is cheap junk from China- buy American if you can
Nov 15, 2011 12:31PM
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The only thing I buy at Walmart are groceries that cost more elsewhere.  Except for their meat.  I don't know what they do to it, but hamburger can sit in the fridge for a week and never spoil or change color.  That's scary.

Nov 15, 2011 12:49PM
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Save the USA don't shop at Big Box Stores, products are from China ,not the USA!! Shop at the mom and pop shops ran in the country please, please!
Nov 15, 2011 12:16PM
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Goes to show everyone has an opinion of their own.  Don't know if anyone noticed, but most goods come from China and really don't care which retailer you visit.
Nov 15, 2011 12:41PM
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The more you buy at walmart the more happy is the chinese  people complaint about the economy,,,, but still support the chinese products
Nov 15, 2011 1:04PM
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Don't know if they take suggestions, but I think it would help if they bought little markers to stick on their shelves in front of items made in the U.S.A....I doin't hate foreign products, but I do care about the people who live down the road from me...I'd rather buy something made from my neighbors, friends, and relatives who live down the road from me. I'd rather support them through a job than through unemployment benefits.....just a thought

It is time for American companies to become patriotic again!

Nov 15, 2011 1:17PM
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Sam Walton must be flipping in his grave over what has happened to his creation, "Wal-Mart". When he was alive, he would only feature goods made in America. Now that his offsprings took over the operation, they are doing just the opposite, supplying products made outside our country.

People complain about not having jobs, or we are sending jobs outside the US, but the first thing they do is run/rush to Wal-Mart and purchase this foreign junk. Thanks to the NAFTA agreement signed by clinton, our nation is now overrun with foreign made products and junk.

It amazes me that the majority of our automobiles are actually made in Mexico and Canada. I'm talking about Ford, GM and Chrysler vehicles, mainly passenger cars, when there are many Japanese vehicles completely made in the US which pay good wages to their workers, often equivalent to union wages.

Most folks here in the US don't realize that Mexico has a low unemployment rate, around 5% when I last checked, thanks to our NAFTA agreement. But then you ask why do we have so many illegal's coming from that country. The reason is, is because the uneducated and criminal element, not all, are the bulk of those coming to the US to find work. In Mexico, they don't put up with a child not wanting to learn and disrupt classes, etc. If your don't want to learn, you get kicked out of school and can't get an education. In Mexico, to get any kind of job, you must have at least a high school education, otherwise you're out of luck in the job market.

There is another thing that most people don't realize. It cost a minimum of $10,000 for a foreigner to go through the proper channels to gain citizenship in the US. This is another reason we have so many illegal's here. They can't afford to pay the cost to become a citizen of the US.

Most US citizens don't realize that a simple item made in the US creates many, many jobs. A simple item creates jobs because the machinery, steel, material, etc, etc, etc to make a product has to be created to manufacture such goods, but greed and political buyouts keeps companies importing junk to shove down our throats.

You can blame our politicians, both the Dems and Repubs, for the mess our country is in. I say, get rid of the political parties and let individuals run on their own merit/s if they want to become a politician.

 

Nov 15, 2011 12:45PM
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it's likely that China sold its goods to Walmart even cheaper than before because China refuses to increase the value of currency, which ultimately improved Walmarts bottom line and wasn't necessarily due to more sales.

China will continue to be a player in undermining the world economy by decreasing the value of its currency "and" because corporations around the world continue to buy those cheap products, thus enabling China.

In regards to de-cluttering its stores, it's mostly junk anyways.  People buy many of Walmarts products are simply relocating junk from one place to another, ie, walmart to the home, then right into the landfill.

@smile934 - the reason the meat doesn't turn brown as fast is because they are packaging it with a gas ( i think its CO2), which inhibits bacteria and the meat from oxidizing / rotting if it were otherwise packaged with regular air.
Nov 15, 2011 12:37PM
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ok down for nine quarters & now there up a bit, how? you need to get back to where you were 9 quarters ago before your up! I love how this math works
Nov 15, 2011 12:16PM
Nov 15, 2011 2:10PM
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UAW hit the nail on the head.  And to Forever a Dallas Fan.  What are you smoking?  You have never worked for Wal-Mart I take it.  They pay crap wages and give crap bennys.  My wife who had to take a job there because there is no other work around unless you want fast food.  Is paid a big 8.45 per hr and is always shy of making 30 or more hrs a week.  She has a college degree also.  Oh and she can't get a raise until one year of service.  So don't tell me how great they are. 
Nov 15, 2011 12:59PM
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China???  If we were China I would hope that we might be doing the same as they are doing now...  Trouble is, I'm very much afraid that their politicians are muuch more effective than ours.  That's why the U.S. is in trouble -- has just about LOST its manufacturing sector -- while China has a sea of easy choices in front of it.
Nov 15, 2011 2:06PM
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Don't see how they are losing money. They go up every month on their prices! Gas prices have fallen so they can't use that excuse! Being on disability. I buy the same items every month to get me through. 4 out of the last 5 months. I've seen those items go up! Sam Walton would turn over in his grave to see what the have done to his company 
Nov 15, 2011 2:59PM
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tom you must be in portland? rather salmon fish anyhow.. but it is the buyers and people that supposedly check in the areas for what sells etc, and that goes for any store/retail. and same for made in china crud... all stores sorry to say not just walmart, sams, costco, target etc... thing is walmart gets large amounts better price and tries to maintain that, other retails it's the exact same thing.. exact and it's so much more.. so don 't just blame walmart for china merchandise.. heck go to the oregon coast and the little tourist trap crap in depoe bay.. oh my gosh.. made in china? really.. it's every where folks.. every store, stop playing the blame game on walmart... they are not the only one's who carry product made somewhere besides the USA,
Nov 15, 2011 2:22PM
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hey saint me, before you speak of Sam Walton know the facts, most everything he wanted was made in America, but not all of it was... if you were a true and loyal shopper of Wal-Mart you would read labels and where made and have known that... Nerd
Nov 15, 2011 1:40PM
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David David David-Nerd-In the 50's and 60's the US was 30% Unionizes, we had no problem competing in the world market and we had high taxes and a high standard of living. As Unions declined so did our middle class, if you check the charts the decline of Unions and the middle class are in complete sink. Now Unions make up 7% of our labor force and people actually blame them for our decline when the facts show the exact opposite. Germany today is the second largest exporter in the world they are 25% unionized, have high taxes, high benefits and a higher standard of living than we do. When you check the facts your argument holds no water.Embarrassed
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