Walmart Stores Inc. (WMT) reported higher-than-expected quarterly earnings, marking its fifth gain in a row in domestic same-store sales. The retail store’s shares were up nearly 3% on the news.
Despite the good news, the company stated that sales at established stores are likely be slower during the holiday quarter due to increased competition.
The company’s earnings have been under pressure from increased costs caused by entry-level wage increases. Walmart does note that investments in higher wages has led to improved customer service, and improved sales.
Walmart, the largest retailer in the world, reported a net profit of $3.304 billion ($1.03 per share) in the third quarter, down from $3.711 billion ($1.15 per share) the previous year.
Analysts were looking for $.98 per share. Accounting for lease adjustment boosted results by four cents a share.
Greg Foran, the head of Walmart’s operations in the U.S., stated that the company added more labor hours into stores than they initially planned, and also made investments in customer-facing aspects of stores. These and other investments drove down operating income 8.8% to reach $5.7 billion.
Consolidated revenue for the company dropped 1.3% to $117.4 billion, hurt by a stronger dollar and international operations.
Sales at establish stores increased 1.5%, and customer traffic also rose 1.7%.