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Walmart Earnings Beat Estimate But Comps Decline

For the third quarter ended October 31, Wal-Mart Stores, Inc. posted consolidated net income of $3.7 billion, up 2.8%, with diluted earnings per share of $1.14 versus $1.07 in the prior-year period, a figure that included one cent per share from Vips restaurants in Mexico now in discontinued operations. Walmart Stores, including namesake and Sam’s Club operations in the United States, posted a comparable store sales decline of 0.1% without fuel sales contribution.

Earnings beat a Zacks Consensus Estimate of Wall Street analysts by a penny, although soft comparable store sales continue to be an sore spot with analysts.

Walmart banner stores had a 0.3% comp decline while Sam’s Club enjoyed a 1.1% comp increase without the impact of fuel sales, the company stated. The company went on to say that Walmart U.S. comp traffic decreased 0.4% while average ticket gained 0.1%. E-commerce sales boosted comp sales by approximately 0.2% for the 13-week period, it added.

Walmart also reported net sales of $114.9 billion, up 1.6% from the year earlier. It noted that the quarter this year included the negative impact of approximately $1.6 billion from currency exchange rate fluctuations. On a constant currency basis, it asserted, net sales would have gained 2.7% to $116.2 billion. Other income, including membership revenue from Sam’s Club, increased 12.3% versus last year’s quarter, which put total revenue at $115.7 billion with currency change impact, up 1.7% from last year’s third quarter.

“Walmart delivered solid earnings growth that was within our guidance range. We had strong operating income across our segments, with Walmart U.S. growing almost 6%, Sam’s Club increasing more than 9%, and International up 8% on a constant currency basis,” said Mike Duke, Wal-Mart Stores president and CEO, in comments on the quarterly results. “Our most important priority is growing top line sales, including comp sales. The retail environment, both in stores and online, remains competitive. Walmart has aggressive plans to help our customers enjoy the holiday season, and there is no doubt that we plan to win for our customers and shareholders throughout the holidays.”