Wal-Mart Stores, Inc. (NYSE:WMT) shares down 31% over the past year and trading around four-year lows. After the company released third quarter earnings, stock price increased 4.70% to $60.59 on Tuesday morning.
According to Wal-Mart’s third quarter earnings report, total revenue was $122.4 billion, an increase of 2.8% at fixed exchange rates. E-commerce sales and GMV globally increased approximately 10% at fixed exchange rates. The main increase pressure came from major international markets. Diluted earnings per share from continuing operations was $1.03 benefited by $0.04 from an adjustment for certain leases. Exchange rates negatively affected diluted earnings per share by $0.04.
Walmart International net sales were $29.8 billion, and operating income decreased 6.4%. At fixed exchange rates, sales reached $34.7 billion and operating income increased 8.5%, led by Canada and Mexico.
The stronger U.S. dollar has negatively impact and cut four cents off of diluted earnings per share in third quarter. International sales which occupy about 25% of Wal-Mart’s top line fell 11% and offset part of improvement in domestic stores.
However, Wal-Mart offers upbeat earnings guidance.
Even though profit and revenue slightly lower compared with last quarter because of weaker international sales and the stronger dollar, earnings came in at the high-end of the company’s guidance.
The report follows downturn quarterly earnings from Macy's, Inc. (NYSE:M) and Nordstrom, Inc. (NYSE:JWN) that has caused concerns about consumer spending during holiday season.
For the fourth quarter, Wal-Mart forecast earnings of $1.40 to $1.55 diluted per share. Thomson Reuters Analysts forecast $1.42 in diluted earnings per share. The company also predicted year earnings of $4.50 to $4.65 diluted per share, compared with its prior downbeat forecast of $4.40 to $4.70 diluted earnings per share in August.
The world’s largest retailer has shown weakness signs by revenue recently. Profits was decrease while the company has spent a lot of money to increase employees’ wages, improve stores’ environment and online sales. Wal-Mart also announced that they would slow the pace of opening new store in the U.S. and reduce capital investments.