• Q3 net income fell 2.9% to US$3.3bn
  • Sales rising 8.2% to $109.5bn
  • US sales increased 2.7% to $63.8bn 

Retail giant Wal-Mart Stores Inc today booked a 2.9% drop in third-quarter profit, but saw US same-store sales rise for the first time in ten quarters.

The world's largest retailer today (15 November) said net income fell to US$3.3bn for the three months to 31 October, despite sales rising 8.2% to $109.5bn over the period.

In the US, where the company has struggled in recent quarters, it recorded a 5.1% rise in operating income to reach $4.6bn, while sales increased 2.7% to $63.8bn, and were up 1.3% on a comparable-store basis.

The company attributed the same-store sales growth to an increase in average ticket price, which was partially offset by lower traffic than last year. But it said comparable traffic rose by more than 160 basis points over the second quarter.

"Three key elements drove the comp improvement in the third quarter," said Bill Simon, Wal-Mart US president and CEO. "Our focus on expanded assortment, product innovation and local relevance improved merchandise offerings throughout the store and customers responded.

"Productivity initiatives improved in-stock levels, and we continue to drive price leadership in all our stores."

Simon said that apparel sales improved approximately 170 basis points over the previous quarter, leading to a low single-digit negative comp. "Men's and ladies' apparel had the strongest sales, where our focus on core basics and assortment initiatives is paying off. We expanded both space and assortment in our shoe department, which was timely for back to school, as that area achieved the first positive quarterly comp in more than two years," he said.

Company president and CEO Mike Duke added that the economy continues to weigh on US shoppers so the retailer is continuing to invest in low prices for the holidays as well as initiatives like Christmas price guarantee, holiday layaway services and free online shipping options.

Internationally, he said operations are "ready for the upcoming holidays".

"We continue to see strong consumer demand in emerging markets, and our mission is relevant across all our formats around the world. EDLP [every day low price] is becoming an even stronger competitive advantage for us," said Duke.

Duke added that the company leveraged operating expenses over the quarter, and will continue to do so over the rest of the year. "Our overall performance reflects Walmart's strategy of driving the productivity loop, reducing expenses and investing in price."