BENTONVILLE, Ark. -- Wal-Mart Stores here last week said its margins were squeezed in the third quarter ended Oct. 31, primarily because of higher apparel inventories and resulting markdowns, but its food sales remained strong.
e-digits.
Overall, U.S. comparable-store sales were up 6.1% during the period, including a 5.7% gain at the Wal-Mart Stores division and an 8% increase at Sam's Club.
The company said its comparable-store sales trends improved as the year progressed, a reversal of the declining trend in comps that the company experienced a year ago. Wal-Mart reported that total company sales were up 13.1% for the quarter, with the U.S. Wal-Mart Stores division recording gains of 12.8%.
Operating profit at the U.S. Wal-Mart Stores division was up 10.8%. Net income was $2 billion for the quarter, up 12.8%, Wal-Mart said.
In addition to the apparel markdowns, the company also saw pressure on expenses from higher utility and insurance costs.
Wal-Mart warned that despite indications that the economy is improving, consumers still seem to be cautious about spending. It projected same-store sales gains of 3% to 5% for the fourth quarter, in part due to easy comparisons with soft sales in last year's holiday period.
The company also said it had a strong Halloween season, with sell-through up 5% over last year, and it said early sales of Christmas toys were up over last year.
