Tighter inventory controls helped Wal-Mart Stores earn more than Wall Street forecast in its second quarter, but the key barometer of same-stores sales fell at the world's largest retailer -- a worrisome confirmation of broad weakness in consumer spending.
Wal-Mart boosted the low end of its annual profit outlook as it accelerates cost-cutting measures, but it said the economy will remain challenging in coming months and force shoppers to keep seeking low prices and small packages. It doesn't expect big improvement in the holiday season either.
Wal-Mart earned $3.44 billion, or 88 cents per share, in the quarter that ended July 31. That compares with $3.45 billion, or 87 cents per share, in the year-ago period. Revenue fell 1.4 percent to $100.08 billion , MiamiHerald.com reports.
However, Wal-Mart said it earned $3.4 billion in its most recent quarter, modestly more than analysts forecast, while sales slipped by 1.4 percent. Wal-Mart shares jumped $1.37 to $51.88 , Boston Globe reports.
"Our customers are more disciplined in their spending," Mike Duke, Wal-Mart's president and chief executive, told investors during a prerecorded call Thursday. "There is a new normal now where people are saving more, consuming less and being more frugal and thoughtful in their purchases." , The Associated Press reports.