For the three months ended Oct. 31, the nation's largest retailer reported a profit of $3.3 billion, or 96 cents a share, down 2.9% from $3.4 billion, or 95 cents, a year earlier. The results were 2 cents below analysts' expectations.
Wal-Mart executives said Tuesday that the retailer was focusing on keeping prices low to attract customers who remain thrifty and pessimistic about the U.S. economy.
Our shoppers "want to save money. They're juggling credit cards, using coupons and skipping restaurants and vacations," said Wal-Mart Chief Executive Michael Duke in a conference call. "There is a real sense that that the economic strain is taking its toll."
The company's low-price strategy did boost sales by 1.3% at U.S. Wal-Mart stores open at least a year, breaking a nine-quarter streak of sales declines for the chain's American stores. Same-store sales are an important measure of a retailer's health because they exclude the effect of store openings and closings.
The Bentonville, Ark., company stumbled in the last few years by removing thousands of products from its shelves in an attempt to de-clutter its stores. In April, the retailer reversed its decision and announced plans to expand its offerings by 8,500 items, or 11%, for an average store.
Looking forward to the holiday, Duke said the company would continue to emphasize competitive prices with a price match guarantee, a layaway program and free online shipping options.
Wal-Mart forecast that fourth-quarter earnings would range from $1.42 to $1.48 a share, while its guidance for the full year would be between $4.45 to $4.51 a share.
Wal-Mart shares had dipped more than 2% in trading Tuesday.
-- Shan Li
Photo: A Wal-Mart store in Los Angeles. Credit: Robyn Beck / AFP/Getty Images