Wal-Mart Profit Higher

Nov. 14, 2008
But company sees weakness ahead

Wal-Mart Stores said on Nov. 14 its third-quarter profit rose 9.8% to $3.14 billion, matching most forecasts, but that a stronger dollar may hurt upcoming results. Revenues grew 7.5% from a year ago to $97.6 billion.

"Despite economic difficulties around the world, we achieved solid sales and earnings growth and we are optimistic about the upcoming holidays. At a time when our customer is feeling the pressure of a tough economy, Wal-Mart's price leadership is more important than ever,"said Lee Scott, CEO.

But looking ahead, Wal-Mart lowered its guidance for the fourth quarter and full year, projecting earnings per share in a range of $3.42 and $3.46, below most analyst projections. Part of the lower forecast comes from the rise in the dollar, which hurts results from overseas. Tom Schoewe, Wal-Mart's chief financial officer, said that "the rapid changes in currency exchange rates during the last few weeks are projected to negatively affect this year's fourth-quarter results."

Wal-Mart's international operations remained strong, with an 11.2% rise in revenues and a 10.6% increase in operating profits.

At the U.S. Wal-Mart brand, which accounts for 63% of Wal-Mart sales, revenues grew 6.1% and operating profits increased 7.3%.

The Sam's Club brand, a membership-based discount store, saw a 7.4% rise in sales and a 1.7% increase in operating profits.

Copyright Agence France-Presse, 2008

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