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New York - Walmart Stores topped third-quarter profit estimates and increased the low end of its annual forecast, a sign the retailer is making progress reining in costs and revamping its stores.
Earnings were 99 cents a share in the period, excluding some items, the Bentonville, Arkansas-based company said in a statement on Tuesday.
Analysts had predicted 98c on average, according to data compiled by Bloomberg. The company now expects profit of $4.50 to $4.65 a share this year, up from a previous forecast of at least $4.40.
The outlook brought a dose of good news to investors after a dour profit forecast crushed the shares last month.
Walmart suffered its worst stock decline in more than 27 years on October 14 when it said earnings would decrease 6% to 12% next year. The strong dollar also has hurt the value of Walmart’s overseas sales, contributing to a 1.3% revenue decline last quarter.
The shares rose 3.2% to $59.70 at 14:03 in early trading on Tuesday. Walmart had lost 33% of its value this year through Monday’s close.
Overhauling stores
Walmart is fixing up its US stores after years of customer complaints about out-of-stock items, poor customer service and long waits at the checkout line.
As part of an effort to improve operations, Walmart announced plans in February to raise wages for 500 000 workers. The idea is the higher pay will help the company recruit and retain better employees. The retailer bumped its starting level to $9 an hour earlier this year and plans to make it $10 in 2016.
The store-improvement plan is beginning to bear fruit. In February, only 16% of its 4 600 US locations were at the standards the company had set for customer service, cleanliness and convenience. In October, that number was 67%.
