Overseas sales boost Walmart profit; Co. ups FY11 profit view

Retail giant Walmart (WMT) reported 9 percent growth in its quarterly profit on strong sales at its international operations and raised its fiscal 2011 earnings outlook.

Arkansas-based Walmart earned $3.44 billion or 95 cents per share, compared with $3.14 billion, or 81 cents per share, in the same quarter last year.

Excluding a tax benefit of 5 cents, the company's third-quarter profit was in line with Street estimates of 90 cents per share, according to analysts polled by Thomson Reuters.

Quarterly revenue rose 2.6 percent to $101.95 billion, while analysts were expecting $102.43 billion.

Sales at U.S. stores opened at least a year fell 1.3 percent on lower store traffic and average ticket. This was the sixth consecutive same stores decline at Walmart's U.S. operations.

Walmart U.S. net sales of $62.2 billion were relatively flat for the third quarter, while International sales grew 9.3 percent to $26.9 billion, aided by Mexico, Brazil, Japan and China. International sales include a $349 million benefit from changes in currency exchange rates.

For the fourth quarter, the world's largest retailer expects earnings in the range of $1.29 to $1.33 per share. In the fourth quarter of last year, the company earned $1.26 per share. Analysts expect earnings of $1.28 per share for the fourth quarter.

Also, Walmart sees its U.S. comparable store sales results between 1 percent fall and a 2.0 percent rise for the fourth quarter. In the same period last year, its comparable store sales fell 2 percent. An investor presentation in October said the company's U.S. comparable sales for the fourth quarter would be positive.

However, Walmart raised its fiscal 2011 earnings forecast to $4.08 to $4.12 per share from $3.95 to $4.05 per share. In fiscal 2010, the company earned $3.73 per share. Analysts forecast the company to earn $4.02 per share for the full year.

As the holiday season nears, from which Walmart and Target get their major chunk of annual sales, retailers are going all out to woo customers by aggressive promotions on toys and electronic gadgets.

On the other hand, the slow pace of growth in employment rate and Americans drive to cut down their debts could be roadblocks for the retailers.

Meanwhile, National Retail Federation said October retail sales, excluding automobiles, gas stations, and restaurants, rose 0.3 percent seasonally adjusted over September and 2.6 percent unadjusted over last year.

This was the fourth consecutive monthly increase in sales, making retailers optimistic as consumer spending finally shows momentum. NRF expects November-December holiday sales to grow by 2.3 percent, the most since 2006.

This continued momentum is good news for the industry, especially with Black Friday and Cyber Monday quickly approaching, said NRF President and CEO Matthew Shay. While there is no question that consumer demand has improved, there are still questions about consumer confidence tied to high unemployment. We need to see improvement in key economic indicators to sustain any long-term growth.

October retail sales released recently by the U.S. Commerce Department show total retail sales (which include non-general merchandise categories such as autos, gasoline stations and restaurants) increased 1.2 percent seasonally adjusted over September and 5.4 percent unadjusted year-over-year.

While spending throughout the industry was varied, it appears the fourth quarter has gotten off to a solid start, said NRF Chief Economist Jack Kleinhenz. October's results are a clear indicator that the economy and consumer spending continue to show marked improvement, even though we expect consumers to proceed with caution.

Peer Target (TGT) is set to report its quarterly numbers on Nov. 17. Wall Street expects the firm to earn 68 cents on revenue of $15.61 billion for the third quarter.

Shares of Walmart were up 45 cents at $54.40 in the pre-market trading. They closed Monday's regular trading down 18 cents at $53.95 on the NYSE.