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Wal-Mart's 3Q results show US turnaround
ANNE D'INNOCENZIO
(The Associated Press)



04:32:22PM (ET) Tuesday,November 15,2011.

NEW YORK (AP) — Wal-Mart Stores Inc. got an early Christmas gift: its strategy of offering the lowest prices and shoppers' favorite goods is starting to work just in time for the holiday shopping season

Wal-Mart on Tuesday reported its first quarterly gain in revenue after nine consecutive quarters of declines at its branded U.S. stores by focusing on low pricing and stocking the brands and products that people care most about.

That the world's largest retailer is turning a corner is a positive sign for the retail industry and the U.S. economy as a whole. Its core low-income shoppers have been particularly hard hit by joblessness and the other challenges of the nation's weak economy. The results indicate that those most hurt by the economic downturn are willing to spend if you offer them rock-bottom pricing.

"The plan is working," said Mike Duke, CEO of Wal-Mart, in a pre-recorded call released Tuesday. "Customers are responding favorably."

Wal-Mart said Tuesday it earned 97 cents per share, or $3.33 billion in the three-month period ended Oct. 31. That compares with 95 cents per share, or $3.43 billion, in the year-ago period. The year-ago results included a tax benefit of a nickel. Net revenue rose 8.2 percent to $109.5 billion.

Analysts had expected 98 cents per share on revenue of $108.86 billion, according to Factset.

Wal-Mart's U.S. namesake division's revenue at stores opened at least a year — an indicator of a retailer's health — rose 1.3 percent, excluding fuel sales. That's above Wall Street estimates for a 0.3 percent increase and reverses nine straight quarters of declines in the measure, its longest streak ever.

Overall, revenue at stores in its U.S. business opened at least a year rose 1.9 percent, including a 5.7 percent increase at Sam's Club stores. Analysts had expected a 4.9 percent gain at the Sam's Club division. Wal-Mart said that the gains in revenue at stores opened at least a year were fueled by an increase in the average ticket.

Sales of food and health and wellness products, sporting goods, and crafts fared well. Clothing sales remain a challenge, and posted another decline, but business is improving.

Wal-Mart has been working to turn around sales at stores open at least a year at its U.S. business, which have been hurt by the economic downturn and missteps the retailer made in its pricing and selection. The business is particularly important to Wal-Mart because it accounts for 62 percent of its total revenue.

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You will agree Wal-Mart tries harder...

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