Wal-Mart ups quarterly view, Target misses forecast
NEW YORK (Reuters) - Wal-Mart Stores Inc (WMT.N) on Thursday reported September sales at U.S. stores open at least a year toward the low end of its outlook, but the world's largest retailer raised its quarterly earnings estimate, citing lower expenses.
Meanwhile, September sales at rival Target Corp (TGT.N) missed its own lowered forecast.
Target also said full-year earnings should be below $3.60 per share. Earlier, it had said profit could be slightly more or less than that figure.
Wal-Mart shares rose nearly 4 percent, while Target stock fell slightly.
Investors expected weak September sales as unseasonably warm weather crimped demand for cold-weather items and consumers continued to battle high food and fuel costs as well as a deteriorating housing market.
Wal-Mart, which caters to lower-income consumers, said monthly sales had suffered because of the weather and tighter consumer spending. Target, which tends to attract higher-income shoppers, cited fewer customers in its stores.
"I have to wonder if Wal-Mart's very aggressive back-to-school actually did take a bite out of Target," said Morningstar analyst Joseph Beaulieu.
"Typically most people think of Target customers and Wal-Mart customers as being completely distinct groups," he said, "but I think there is some cross-shopping going on."
To jump-start back-to-school shopping and improve lagging sales at its U.S. stores, Wal-Mart cut prices by as much as 50 percent in July on 16,000 items like backpacks and school supplies. The effort spurred stronger-than-expected August sales.
To ride the momentum of the back-to-school price cuts, Wal-Mart began reducing prices on hot toys on September 30 for the holiday selling season.
SEPTEMBER SALES
Wal-Mart's U.S. same-store sales rose 1.4 percent in September, below the analysts' average view of 1.9 percent, according to Reuters Estimates. Wal-Mart had forecast a rise of 1 percent to 3 percent.
September same-store sales rose 0.8 percent at the company's U.S. namesake stores and increased 4.4 percent at the Sam's Club warehouse division.
Wal-Mart said toy sales were hurt by safety recalls and tough comparisons with a year ago, when Fisher-Price, a unit of Mattel Inc MAT.N, introduced its T.M.X. Elmo doll, creating an early holiday must-have item.
Total sales for the five weeks ended October 5 rose almost 10 percent to $34.41 billion from $31.37 billion a year earlier. Continued...
