Walmart Net Slides 2.9 Percent in Third Quarter
November 15, 2011,
BENTONVILLE, Ark.-Even though sales showed strong pickups through its various business segments, Walmart's third-quarter net income slipped 2.9 percent to $3.3 billion.
The somewhat weaker bottom line was the result of an increase of 22.4 percent in its provision for income taxes, which totaled $1.8 billion. Net sales for the quarter grew 8.2 percent to $109.5 billion. In terms of sales, said Mike Duke, Walmart's president and CEO, every one of the company's segments "is stronger today than it was a year ago."
The healthiest segment in the third quarter, which ended on Oct. 31, was Walmart International, with an increase of 20.3 percent in total sales. Sam's Club chimed in with gains of 9.5 percent in total sales and 5.7 percent in same-store sales (not counting fuel sales). Walmart U.S. posted increases of 2.7 percent in total sales and 1.3 percent in comparable-store sales.
For the corporation as a whole, gross margin decreased by 52 basis points to 24.6 percent. Selling, general and administrative expenses were up 6 percent in dollars but declined 40 basis points as a percentage of sales, to 19.9 percent.
"Our overall performance reflects Walmart's strategy of driving the productivity loop, reducing expenses and investing in price," Duke said. He added that regarding the U.S. stores are continuing to invest in low prices for the holidays and other programs such as the Christmas price guarantee, holiday layaway services and free online shipping options.