Walmart said its profit for the third quarter was up by 2.8%, but the largest retailer in the world reported a shortfall in sales, as its shoppers with lower income feel a squeeze across the globe.
The giant retailer also said it was cutting its full year outlook and issued profit guidance for the fourth quarter that was lower than analyst’s forecasts.
Walmart has been considered to be bellwether for the economy since the retailer represents close to 10% of the retail spending, not including automotive, in the United States.
Due to that, Walmart has increased its push for the upcoming holiday shopping season, which represents from 20% to as much as 40% of the annual revenues for the retailer.
Like its rivals, the retailer is starting is official holiday season before Thanksgiving. The layaway program for the holiday has returned and Walmart said it was cutting prices on key items for the holiday even more than in 2012.
Walmart announced it had earned $3.741 billion or the equivalent of $1.14 a share for the three months that ended on October 31. That profit compared to last year’s $3.64 billion or $1.08 a share.
Net sales were up 1.6% to end the quarter at $114.9 billion. Analysts had been expecting earnings equivalent to $1.13 a share on sales of $116.89 billion.
Walmart stores in the U.S., which represent over 58% of the total sales for the company, posted the third consecutive quarter decline in an important figure for revenue after six straight quarters of having increases.
Store revenue at those stores open 13 months, which is considered a key measure of the performance of a retailer, dropped by 0.3% in the U.S. Analysts had been expecting that figure to remain unchanged.
Overall, that figured decline by 0.1%, including an increase at Sam’s Clubs of 1.1%. During the fourth quarter, the company expects the figure will be unchanged for U.S. Walmart stores.