NEW YORK: Wal-Mart Stores raised its full-year profit projection Thursday, sending share prices higher despite reporting a plunge in third-quarter earnings due to one-time costs.
The world's biggest retailer continued its strong performance in the US market, where comparable store sales rose 2.7 percent, boosted in part by higher sales in hurricane-affected regions.
Executives also said newer initiatives such as online grocery pickup and a voice shopping venture with Google were succeeding with customers.
But third-quarter earnings sank 42.4 percent to $1.7 billion due mainly to a loss connected to debt payments.
Revenues rose 4.2 percent to $123.2 billion, and Wal-Mart raised its adjusted full-year earnings estimate to a range of $4.38 to $4.46 a share from $4.30 to $4.40 previously.
In a difficult retail environment, the company pointed to progress its efforts to attract more customers back to US stores through higher employee pay and closer attention to merchandise and store presentation. Comparable US store traffic rose 1.5 percent.
Wal-Mart also has invested heavily in e-commerce initiatives, buying several online specialty retailers and upgrading its smartphone app and other systems. E-commerce net sales rose 50 percent.
The company has installed automated retail towers at which customers can scan a barcode and have their items delivered through a conveyer belt.
"We have momentum, and it's encouraging to see customers responding to our store and eCommerce initiatives," Wal-Mart chief executive Doug McMillon said. "We are leveraging our unique assets to save customers time and money and serve them in ways that are easy, fast, friendly and fun."
Earnings in the latest quarter were hit by 29 cents a share due to payments for premiums required to retire higher-interest debt early.
The retailer also set aside a total of $283 million for settlements and compliance programs related to foreign bribery probes.
Even so, the retailer's share price gained 4.3 percent in pre-market trading to $93.65.
"Wal-Mart is doing just fine in the face of heightened competition from Amazon.com and Target and an assortment of other low-price retailers," said Briefing.com. "That is the takeaway from its third quarter earnings report."
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