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NEW YORK - Wal-Mart Stores Inc. and Target Corp. separately released quarterly earnings reports today. Both saw boosts from back-to-school sales.
Leading retailer Wal-Mart, which missed Wall Street forecasts, said a turnaround at its Sam's Club warehouse stores and strength abroad drove a 13.9 percent increase in quarterly profit. Its largest division -- Wal-Mart Stores -- had slower profit growth because of heavy price cuts in August to clear out summer merchandise.
Meanwhile Target met expectations thanks to strength at its namesake discount stores and big profits from its credit card operations. Overall, Target reported earnings of $302 million, or 33 cents per share, compared with $277 million, or 30 cents per share, a year earlier. The company's discount stores posted 13.9 percent revenue growth.
Wal-Mart Chief Executive Officer Lee Scott chided analysts for raising profit forecasts even after the company said it expected earnings to hit the midpoint of its forecast for 45 cents to 47 cents per share, according to a Reuters report.
"It shouldn't have taken a calculator to come to the conclusion that 46 cents per share was the most likely outcome for the quarter," he said on a recorded message.
Not surprisingly, Wal-Mart and Target reported their strongest sales in August when child tax credits helped boost back-to-school spending. Demand slowed a bit in September and then dropped off dramatically in October when unusually warm weather in parts of the United States sapped demand for fall clothing.
Wal-Mart's quarterly sales rose 13.1 percent to $62.5 billion, and sales at U.S. stores open at least a year rose 6.1 percent.
At Target, quarterly revenues were up 10.7 percent at $11.29 billion, and same-store sales rose 4.3 percent.
Both retailers said they were optimistic that this year's holiday shopping season will prove better than last year's, which generated the smallest sales gain in more than 30 years.
But Wal-Mart said its holiday sales would be up largely because it would not take much to beat last year's poor performance.
"I don't think consumer spending is slowing, but I also don't see the strength that many of you in the investment community appear to see," Scott said.
He said the holiday season would be "better than the last" but said customers continued to buy the lowest-priced items, a sign that household budgets remain tight.
Scott also said many customers were waiting for mid-month paychecks to arrive before shopping, which he called an indication of consumers' "liquidity issues."