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Wal-Mart scores solid Q3 earnings as US sales revive

AFP
Walmart's total revenue surged nearly three percent higher to $119.0 billion in the third quarter

Wal-Mart Stores, the world's biggest retailer, posted solid third-quarter earnings Thursday helped by its ability to raise prices in the US market and gains in its small Neighborhood Market stores.

Net income was $3.71 billion in the quarter that ended October 31, down 0.7 percent from a year ago.

Earnings of $1.15 per share were up 0.9 percent from a year ago and well above the Wall Street consensus of $1.12.

Total revenue for the big-box retailer surged nearly three percent higher to $119.0 billion, missing estimates of $118.35 billion.

Wal-Mart said negative currency exchange movements deducted $396 million from sales.

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Net sales in the US market, which account for 60 percent of the company's sales, rose 3.4 percent to $70 billion. A 0.7 percent decline in traffic was offset by an average price rise of 1.2 percent.

US comparable sales -- sales in stores open a year ago -- rose 0.5 percent, the first growth in nearly two years.

Sales were helped by its Neighborhood Market stores, smaller-scale stores aimed at the urban market, where comparable sales jumped about 5.5 percent.

"We have some things in our favor this fourth quarter, including lower fuel prices in the US and other key markets," said Doug McMillon, Wal-Mart Stores president and chief executive, in a statement.

The company predicted US sales in the fourth quarter would come in between flat and 1.0 percent growth. A year ago, they fell 0.4 percent.

Wal-Mart recently announced it was expanding its Black Friday deep-discount sale this month to five days of deals in stores and online.

Sales on Black Friday, the day after the Thanksgiving Day holiday, traditionally kick off the crucial year-end holiday shopping season for retailers. This year Black Friday falls on November 28.

Wal-Mart narrowed its full-year forecast to between $4.92 and $5.02 per share, in part due to the planned closure of underperforming stores in Japan.

Shares in Dow member Wal-Mart soared 2.5 percent to $81.15 in pre-market trading.