Walmart reported a nine per cent increase in net income for the third quarter, but revenue for the world's largest retailer fell below Wall Street forecasts as its low-income shoppers continue to grapple with an uncertain economy.
The discounter issued a fourth-quarter profit outlook that fell short of Wall Street expectations, and the company's stock price slid more than three per cent.
Walmart is considered an economic bellwether because the retailer accounts for nearly 10 per cent of non-automotive retail spending in the U.S. The company's latest results show that many low-income Americans - it's estimated that the typical Walmart customer has an average household income of between $30,000 and $60,000, rents their homes and doesn't own stock - continue to struggle even as the housing and stock markets are improving.
The disappointing revenue comes as Walmart, like other retailers, is preparing for the busy winter holiday-shopping season in the U.S. next week. Walmart has said it plans to offer deeper discounts and a broader assortment of merchandise during this year's season to draw shoppers.
"Macroeconomic conditions continue to pressure our customers," said Charles Holley, Walmart's CFO. "The holiday season is predicted to be very competitive but we are well prepared to deliver on the value and low prices our customers expect."
The disappointing revenue results come a year after Walmart turned a corner by re-emphasizing low prices and restocking stores with thousands of basic items that it had gotten rid of in an overzealous bid to reduce clutter.
During the third quarter of last year, the division reversed nine straight quarters of declines in revenue at stores opened at least a year. U.S. Walmart stores has recorded five consecutive quarters of gains since the division rebounded, including a 1.5 per cent increase in the third quarter.
