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Wal-Mart Stores Inc. reported a 10 percent increase in third-quarter profit Thursday but trimmed its profit outlook because of the troubled economy and the renewed strength of the dollar. The retailer said its third-quarter earnings were $3.14 billion, or 80 cents per share, in the quarter ended Oct. 31, up from $2.86 billion, or 70 cents per share, a year earlier. Earnings from continuing operations were 77 cents per share.
Net sales for the third quarter were $97.6 billion, up 7.5 percent from $90.8 billion a year earlier. Wal-Mart said it was pleased with the results of its early holiday price promotions. Sales rose 7.3 percent at the company's U.S. division and 1.7 percent at the Sam's Club warehouse division.
"Wal-Mart has momentum as we move into the fourth quarter," the company's president and c.e.o. Lee Scott said. "At a time when our customer is feeling the pressure of a tough economy, Wal-Mart's price leadership is more important than ever."
The company's "save money, live better" campaign has been resonating with its customers, he said.
International business remains Wal-Mart's fastest-growing division, with sales up 10.6 percent. The recent rise of the dollar has made this division more vulnerable to fluctuations in exchange rates. Tom Schoewe, c.f.o., said the "rapid changes" in exchange rates in the past few weeks are expected to hurt fourth-quarter results by about 6 cents per share.
Eduardo Castro-Wright, president and c.e.o. of Wal-Mart's U.S. division, told analysts that sales results from early holiday price promotions started last week are "exceeding expectations."
Wal-Mart offered a modest projection for same-store sales for the fourth quarter, predicting sales at stores opened at least a year will be up from 1 to 3 percent. In the third quarter, Wal-Mart's same-store sales rose 3 percent. The retailer is scaling back store growth and capital expenditures focusing instead on remodeling existing locations and creating smaller units with the goal of continuing to increase cash flow to invest in its business.