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Walmart Sales Increase, Profit Lower

walmartWalmart Stores has posted sales that were higher for the quarter in its stores in the U.S. but saw profits drop, as the world’s largest retailer made changes recently that helped attract back some shoppers who left to shop at other chains the past few months.

Sales for existing stores in the U.S. were up by 1.5% the October 31 ending third quarter, which was its fifth straight quarterly growth following a long period of continual declines.

The amount of people shopping increased as well for the fourth consecutive quarter. That figure was higher by 1.7% though customers spent slightly less of a rate per trip to the store.

Despite gains in sales, the profit at Walmart was down 1.1% during the quarter. The retailer also warned that its profits would continue dropping as it is absorbing higher spending. Walmart lowered its target for long term profit this past August and again during October.

Shares at the retailer have dropped almost 31% in 2015, but were up 3% during trading in the early afternoon on Tuesday.

As the start of the all important holiday shopping season approaches, retailers as well as government data presented a picture that was not so positive for American’s desire for gifts, clothes and household items.

Last week, weak figures for quarterly sales from the different chains of department stores such as Nordstrom, Macy’s and others, sent stocks in the industry tumbling downward.

Grocery sales represent over half of the business of Walmart U.S., which has insulated it from some of the current weak demand that is hurting other department store chains that are relying on a higher ratio of accessories and apparel.

The most recent results posted by Walmart and some of the other chains, counter the view Americans are not shopping. Rather, there are areas of strength and weakness.

A strong quarter was reported Tuesday by Home Depot with sales for its existing stores increasing over 5.1%, as more homeowners opened their wallets for improvement projects.

However, for Dick’s Sporting Goods things were not as good as the retailer posted weak sales as well as warning sales at same stores could drop during the current fourth quarter.

Overall, global revenue at Walmart was down 1.3% to just over $117.4 billion. Profit overall was $3.3 billion equal to $1.03 per share.

 

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