NEW YORK -- Walmart shoppers, much like many Americans, still feel like they're in a recession.
In the uneven economic recovery, their bills are going up but their wages are not. While the well-heeled crowd benefits from gains in the stock market, Walmart shoppers are still struggling with a higher payroll tax. And shopping for bargains is a necessity.
For these reasons, the world's largest retailer on Thursday cut its annual outlook for the second time in three months and gave fourth-quarter guidance that's below Wall Street's expectations.
The forecast shows how vulnerable Walmart -- and its customers -- are to economic ups and downs. Walmart shoppers, who on average make $45,000 a year, were squeezed by the recession that began at the end of 2007 and have struggled to recover since it ended in 2009.
On top of that, Walmart is facing increased competition from online rivals such as Amazon.com, which is opening warehouse hubs closer to cities to speed up delivery. Another threat: Dollar stores, which have convenient locations and name-brand products at discounted prices.
"The retail environment, both in stores and online, remains competitive," said Mike Duke, president and CEO of Wal-Mart Stores Inc. "At the same time, some customers feel uncertainty about the economy, government, job stability and their need to take care of their families through the holidays."
Wal-Mart earned $3.74 billion, or $1.14 per share, in the three months ending Oct. 31. That compares with $3.64 billion, or $1.08 per share, a year earlier. Net sales rose 1.6 per cent to $114.88 billion. On a constant currency basis, net sales would have been $116.2 billion. Analysts were expecting earnings of $1.13 per share on net sales of $116.9 billion.
Overall, total sales increased 2.4 per cent for Wal-Mart's U.S. business, 1.1 per cent at Sam's Clubs and 0.2 per cent at Wal-Mart's international business.
But Wal-Mart reported a decline in a figure the industry uses to gauge a company's performance. Revenue at stores open at least a year fell 0.1 per cent for all U.S. stores, but included a 1.1 per cent increase at Sam's Clubs.
Wal-Mart's U.S. stores, which account for 58 per cent of the company's total sales, had a third straight quarter of declines, with revenue at stores open at least a year falling 0.3 per cent. Wal-Mart blamed slower-than-expected spending in the beginning of the quarter, but said business picked up in September and October.
There was a bright spot. Revenue at stores open at least a year rose 3.4 per cent at its smaller Neighborhood Market stores. Wal-Mart has 300 Neighborhood Market stores but plans to use them to grow its business.
Wal-Mart said it expects adjusted earnings per share to be $1.60 to $1.70 for the fourth quarter. For the year, it expects $5.11 to $5.21, compared with its forecast of $5.10 and $5.30 per share in August. That was downgraded from May's forecast.
-- The Associated Press