Wal-Mart sales perk up ahead of holiday

Before you go, we thought you'd like these...
Before you go close icon

34 PHOTOS
Walmart / Wal-mart retailer store
See Gallery
Wal-Mart sales perk up ahead of holiday
IMAGE DISTRIBUTED FOR WALMART INC. - Walmart CEO Doug McMillon talks to an audience of suppliers and Walmart associates at the Walmart Product Sustainability Expo, on Tuesday, April 29, 2014 in Rogers, Ark. Walmart kicked off its inaugural Sustainable Product Expo, a three day collaboration with its suppliers to expand the availability of products that sustain people and the environment. Participating suppliers represent more than $100 billion in sales at Walmart; underlining the scale and scope of the Expo. (Spencer Tirey/AP Images for Walmart Inc.)
A Walmart sign shows gas prices starting at $2.78, Tuesday, Nov. 12, 2013, in San Antonio. U.S. pump prices are the lowest they've been since February 2011. (AP Photo/Eric Gay)
A man pushes a shopping cart outside of a Walmart store that boarded its entrance and closed early in Kailua-Kona, Hawaii, Thursday, Aug. 7, 2014, as the area prepares for Hurricane Iselle. Hurricane Iselle is expected to arrive on the Big Island on Thursday evening, bringing heavy rains, winds gusting up to 85 mph and flooding in some areas. Weather officials changed their outlook on the system Wednesday after seeing it get a little stronger, giving it enough oomph to stay a hurricane as it reaches landfall. (AP Photo/Chris Stewart)
President Barack Obama, center facing rear, shakes hands with Joel Anderson, CEO and President of Walmart.com, center right, after speaking at a Walmart store in Mountain View, Calif., Friday, May 9, 2014. Obama announced new steps by companies, local governments and his own administration to deploy solar technology, showcasing steps to combat climate change that don't require consent from a disinclined Congress. (AP Photo/Jeff Chiu)
President Barack Obama waves after speaking at a Walmart store in Mountain View, Calif., Friday, May 9, 2014. (AP Photo/Jeff Chiu)
President Barack Obama shakes hands with supporters after speaking at a Walmart store in Mountain View, Calif., Friday, May 9, 2014. (AP Photo/Jeff Chiu)
IMAGE DISTRIBUTED FOR WALMART, INC. - Walmart CEO Doug McMillon, left, watches as Indra Nooyi, Chairperson, CEO of PepsiCo, signs a new commitment to accelerate innovation in sustainable agriculture and recycling along with second from right, Ken Powell, CEO General Mills and John Bryant, CEO Kellogg during Walmart's inaugural Sustainability Product Expo, on Tuesday, April 29, 2014 in Rogers, Ark. Eight of the largest food companies announced pledges to help ensure that tomorrow’s food supply is affordable and sustainable. Companies also announced plans to launch a groundbreaking recycling initiative called the Closed Loop Fund, with the goal of making recycling available to all Americans. (Spencer Tirey/AP Images for Walmart Inc.)
IMAGE DISTRIBUTED FOR WALMART INC. - Walmart CEO Doug McMillon, left, and Procter & Gamble CEO A.G. Lafley shake hands after announcing, Tuesday April 29, 2014, a commitment to a 25 percent reduction in water per dose for all liquid laundry detergent at the John Q. Hammons Center in Rogers, Ark. during the inaugural Walmart Sustainable Product Expo. Procter & Gamble supports Walmart’s challenge to reduce water in liquid laundry detergents because it’s good for consumers and good for business. The smaller bottles also mean more energy-efficient packaging too. (Spencer Tirey/AP Images for Walmart Inc.)
At Walmart'€™s inaugural Sustainability Product Expo, Tuesday, April 29, 2014, CEO Doug McMillon grabs a selfie along with other CEOs from major supplier companies after they sign new commitments to accelerate innovation in sustainable agriculture and recycling. They all announced pledges to help ensure that tomorrow’s food supply is affordable and sustainable, and they also launched a groundbreaking recycling initiative called the Closed Loop Fund with the goal of making recycling available to all Americans. (Spencer Tirey/AP Images for Walmart Inc.)
In this Thursday, Dec. 26, 2013 photo, a family leaves a local Walmart in Mexico City. Looking around a Mexico dotted by Starbucks, Wal-Marts and Krispy Kreme outlets, it's hard to remember the country before the North American Free Trade Agreement, which has dramatically expanded consumer choice and trade since it took effect 20 years ago.(AP Photo/Marco Ugarte)
In this Tuesday, Jan. 28, 2014, photo, Hot Wheels cars, a Mattel product, are displayed in a Walmart store in Robinson Township, Pa. Mattel Inc. reports quarterly financial results before the market open on Friday, Jan. 31, 2014. (AP Photo/Gene J. Puskar)
A sign at the register inside a Bentonville Wal-Mart store seen at Colgate and Champions for Kids for SIMPLE Giving, on Thursday, March 27, 2014, in Bentonville, Ark. (Photo by Beth Hall/Invision for Cohn & Wolfe - New York/AP Images)
** HOLD FOR BLACK FRIDAY LAW ** Tony Rodriguez, Walmart associate, stocks the holiday section of a Walmart store in advance of Black Friday sales in Oklahoma City, Tuesday, Nov. 26, 2013. (AP Photo/Sue Ogrocki)
** HOLD FOR BLACK FRIDAY LAW ** Walmart associate Tammy Henderson stocks garland in the holiday section of a Walmart store in advance of Black Friday sales in Oklahoma City, Tuesday, Nov. 26, 2013. (AP Photo/Sue Ogrocki)
In this Nov. 26, 2013 photo toy are displayed for Black Friday sales in a Walmart store in Oklahoma City. For the first time in 70 years, Oklahoma residents can legally enjoy Black Friday mega-deals after legislators repealed parts of a law that prohibited retailers from selling items for less than they paid. (AP Photo/Sue Ogrocki)
In this Nov. 26, 2013 photo is a display of televisions in a Walmart store ready for Black Friday sales at a Walmart store in Oklahoma City. For the first time in 70 years, Oklahoma residents can legally enjoy Black Friday mega-deals after legislators repealed parts of a law that prohibited retailers from selling items for less than they paid. (AP Photo/Sue Ogrocki)
** HOLD FOR BLACK FRIDAY LAW ** Steve Baker pauses to take a closer look at a display of special Black Friday sale items as he shops in a Walmart store in Oklahoma City, Tuesday, Nov. 26, 2013. (AP Photo/Sue Ogrocki)
** HOLD FOR BLACK FRIDAY LAW ** Steve Baker pushes his cart past a display of special Black Friday sale items as he shops in a Walmart store in Oklahoma City, Tuesday, Nov. 26, 2013. (AP Photo/Sue Ogrocki)
This Sept. 19, 2013 photo shows the sign of a Walmart store in San Jose, Calif. (AP Photo/Jeff Chiu)
A woman shops in the grocery department at a Walmart store in San Jose, Calif., Thursday, Sept. 19, 2013. (AP Photo/Jeff Chiu)
A Walmart representative demonstrates a Scan & Go mobile application on a smartphone at a Walmart store in San Jose, Calif., Thursday, Sept. 19, 2013. (AP Photo/Jeff Chiu)
A man shops at a Walmart store in San Jose, Calif., Thursday, Sept. 19, 2013. (AP Photo/Jeff Chiu)
Customers walk outside of a Walmart store in San Jose, Calif., Thursday, Sept. 19, 2013. (AP Photo/Jeff Chiu)
Reusable shopping bags are offered for sale at new Walmart Neighborhood Market, opening its 34,000 square foot store in the Chinatown district of Los Angeles Thursday, Sept. 19, 2013. (AP Photo/Nick Ut)
Consumers shop for meat products at the new Walmart Neighborhood Market, opening its 34,000 square foot store in the Chinatown district of Los Angeles Thursday, Sept. 19, 2013. (AP Photo/Nick Ut)
Nature Harvest Bread sales agents restock loaves of bread at the new Walmart Neighborhood Market, opening its 34,000 square foot store in the Chinatown district of Los Angeles Thursday, Sept. 19, 2013. (AP Photo/Nick Ut)
FILE - In this Thursday, Sept. 19, 2013, file photo, costumers shop at a new Walmart in Los Angeles. The government reports on sales at U.S. retailers in September on Tuesday, Oct. 29, 2013. (AP Photo/Nick Ut)
A senior consumer shops for fruits at the new Walmart Neighborhood Market, opening its 34,000 square foot store in the Chinatown district of Los Angeles Thursday, Sept. 19, 2013. (AP Photo/Nick Ut)
Consumers arrive at the opening of the new Walmart Neighborhood Market, opening its 34,000 square foot store in the Chinatown district of Los Angeles Thursday, Sept. 19, 2013. (AP Photo/Nick Ut)
Consumers shop at the new Walmart Neighborhood Market, opening its 34,000 square foot store in the Chinatown district of Los Angeles Thursday, Sept. 19, 2013. (AP Photo/Nick Ut)
Bimbo Bakeries USA's Bimbo Bear, right, welcomes consumers at the new Walmart Neighborhood Market, opening its 34,000 square foot store in the Chinatown district of Los Angeles Thursday, Sept. 19, 2013. (AP Photo/Nick Ut)
FILE - In this June 7, 2013 file photo, Doug McMillon, President and CEO, Wal-Mart International, speaks at the shareholders meeting in Fayetteville, Ark. Wal-Mart Stores on Monday, Nov. 25, 2013 announced that CEO and President Mike Duke is stepping down from those posts, and named McMillon as his successor, effective Feb. 1, 2014. (AP Photo/April L. Brown, File)
Consumers shop at the new Walmart Neighborhood Market, opening its 34,000 square foot store in the Chinatown district of Los Angeles Thursday, Sept. 19, 2013. (AP Photo/Nick Ut)
of
SEE ALL
BACK TO SLIDE
SHOW CAPTION +
HIDE CAPTION

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 Wall Street expectations 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 middle-income 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 holiday plan that includes free shipping on the top 100 items and price cuts on 20,000 items. Starting Friday, Wal-Mart will start to match online prices such as Amazon's in its stores. Managers of half of its stores were already doing that, but now it's become 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.

"We need to continue to improve the customer experience, both in our stores and online, to deliver stronger sales growth and strength our bottom line performance," McMillon said in a transcript of a prerecorded call to investors.

Wal-Mart reported earnings of $3.71 billion, or $1.15 per share, for the three months that ended Oct. 31.

The company, which is based in Bentonville, Arkansas, posted revenue of $119 billion in the period, beating Wall Street forecasts. Analysts expected $118.35 billion, according to Zacks.

Wal-Mart's U.S. discount division posted a 0.5 percent increase in revenue at stores open at least a year. That was the first increase in seven quarters.

Its smaller Neighborhood Markets, which cater to shoppers looking for more convenience and offer groceries, fresh produce and beauty items, had a 5.5 percent increase in revenue at stores open at least a year.

During a call with reporters on Thursday, Wal-Mart Chief Financial Officer Charles Holley said Wal-Mart is already seeing some benefit from lower gas prices, which are translating into improved customer traffic in stores. "We all know it can help the average consumer," he said.

The average gasoline price in the U.S. has fallen for 48 straight days, according to AAA. Drivers are now paying $2.92 per gallon on average.

Ken Perkins, president of RetailMetrics LLC, believes it will take until December for Wal-Mart and other stores to really benefit from the money saved.

Wal-Mart said that it expects fourth-quarter earnings per share to range between $1.46 and $1.56, which includes the negative impact of closing underperforming stores in Japan. Analysts had expected $1.57 per share.

The company expects full-year earnings to be $4.92 to $5.02 per share. Analysts had expected $4.99, according to FactSet.

Shares of Wal-Mart rose nearly 3 percent, or $42.54 to $81.74 in morning trading.

More from AOL.com:
DC woman spends $35K on search for lost dog
California cat cafe is catnip for feline fans
Throwback Thursday: Elizabeth Banks' high school years

Read Full Story

Sign up for Breaking News by AOL to get the latest breaking news alerts and updates delivered straight to your inbox.

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners