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    Wal-Mart Scores Record Q3; Leaked Memo Suggests New Store Goal Grows for '06

    BENTONVILLE, Ark. -- Suggesting that size does indeed matter in trying times, global giant Wal-Mart Stores, Inc. said yesterday it had a record third quarter in sales and earnings despite the effects of hurricanes, the rising price of gasoline, and expenses related to product warranty programs. Later in the day, a leaked internal memo suggested that Wal-Mart plans to open or expand 484 stores across the United States next year, over 100 more than previously disclosed.

    BENTONVILLE, Ark. -- Suggesting that size does indeed matter in trying times, global giant Wal-Mart Stores, Inc. said yesterday it had a record third quarter in sales and earnings despite the effects of hurricanes, the rising price of gasoline, and expenses related to product warranty programs. Later in the day, a leaked internal memo suggested that Wal-Mart plans to open or expand 484 stores across the United States next year, over 100 more than previously disclosed.

    For the quarter ended Oct. 31, 2005, net sales were up 10.1 percent to $75.4 billion. Net income rose 3.8 percent to $2.4 billion. Earnings per share were $0.57, up from $0.54 per share in the same prior year quarter.

    Net income for the latest quarter included three items netting to an unfavorable after-tax impact of $80 million or $0.02 per share: approximately $40 million of costs incurred as a result of hurricanes Katrina, Rita and Wilma; and in the Wal-Mart Stores segment, $69 million of expenses related to product warranty programs, partially offset by $29 million of other income resulting from a Visa MasterCard antitrust litigation settlement.

    "I am proud of the record results our associates achieved in the quarter, while leading the relief efforts in the aftermath of three major hurricanes," said president and c.e.o. Lee Scott in a statement.

    Wal-Mart also shared its performance for the nine months ended Oct. 31, 2005. Net sales for the period were $223.2 billion, an increase of 9.9 percent over the first nine months of fiscal 2005. Net income was up 7.6 percent to a record $7.6 billion.

    By division, net sales for Wal-Mart Stores, which includes the retailer's conventional units, supercenters, and Neighborhood Markets, were $50.2 billion in the third quarter, a 9.5 percent increase from the prior-year period. Nine-month sales were $149.7 billion, a 9.8 percent increase. Operating income in the third quarter was $3.3 billion, an increase of 6.3 percent, while operating income for the nine-month period rose 6.9 percent to $10.6 billion.

    The Sam's Club division also performed favorably. Net sales for the third quarter were $10 billion, a 10.3 percent jump from the year-ago period. For the nine-month period, sales were $29.7 billion, a 7.4 percent increase. Operating income for the third quarter was $342 million, an increase of 11.8 percent, while operating income for the nine-month period was up 9.0 percent to $1 billion.

    Total U.S. comparable sales for the quarter increased 3.8 percent, including a 2.9 percent comp increase for Wal-Mart Stores and an 8.1 percent comp increase for Sam's Club. Total U.S. comparable sales for the nine-month period were up 3.4 percent, which is comprised of a 3.1 percent comp increase for Wal-Mart Stores and a 5.0 percent comp increase for Sam's Club.

    International sales at Wal-Mart saw the highest spike, with a 10.1 percent increase in third-quarter sales to $15.2 billion, and a 12.2 percent increase in the nine-month period to $44.3 billion. Third-quarter operating income was up 14.2 percent to $797 million for the most recent quarter, and up 10.2 percent to $2.2 billion for the nine-month period.

    Separately yesterday, an internal document obtained by Wal-Mart Watch and released to The Associated Press seemed to reveal that Wal-Mart plans to open or expand 484 stores across the United States next year, over 100 more than previously disclosed. Wal-Mart confirmed that the document was authentic, according to published reports.

    Wal-Mart Watch, a union-backed opposition group, said it would use the list of planned store openings to alert activists in communities where Wal-Mart plans to open or expand.

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