For the overall U.S. business, revenue at stores opened at least a year rose 2.5 percent, including a 4.7 percent increase at the company Sam’s Club warehouses.
Wal-Mart’s international business, which produces more than a quarter of its revenue, has remained strong. The company’s international sector increased 6.4 percent to $32.01 billion in the quarter. Even in the United Kingdom, which is struggling with a weak economy, Wal-Mart has seen shoppers flocking to its stores because of its low prices. “The customer is very stretched there,” said Holley.
But it’s scaling back expansion plans in three markets: China, Brazil and Mexico.
“International remains our growth engine, but at a slightly slower pace,” said Mike Duke, Wal-Mart’s president and CEO.
Wal-Mart is slowing store expansion in China and Brazil to focus on getting the best store sites and fine tuning its every day low price strategy.
In Mexico, Wal-Mart said it’s delaying the expansion of some of its stores in Mexico by as much as 90 days. The delay, the company said, is due to additional steps its Mexico division is taking in the real estate process. These steps include reinforcing documentation that backs real estate projects. In addition, some stores that are set to open in Mexico the latter half of December have been moved into January 2013 to allow its operations team to focus on the Christmas season.
The delay in Mexico come four months after reports surfaced that the retailer allegedly failed to notify law enforcement after finding evidence that officials authorized millions of dollars in bribes in Mexico to speed building permits and gain other favors. The company has said it has launched its own internal investigation into the bribery matter and is working with government officials in the U.S. and Mexico. Wal-Mart has also been overhauling its compliance program.
Wal-Mart said that it had incurred $34 million in expenses related to the bribery investigation, and expects to incur $35 million to $40 million in expenses during each of the remaining quarters of the year.
In the latest blow, two U.S. congressmen who are doing their own investigation — Reps. Henry Waxman and Elijah Cummings — made public this week letters to Wal-Mart’s CEO Mike Duke suggesting the company may have had problems with money laundering and tax evasion. Walmex, Wal-Mart’s Mexico division, said in a statement that “it has no knowledge that (it) is being investigated by Mexican authorities concerning these issues.”
Overall, Wal-Mart reported net income of $4.02 billion, or $1.19 per share, for the quarter ended July 31. That compares with $3.80 billion, or $1.09 per share, a year ago. Revenue excluding membership fees at Sam’s Club rose 4.5 percent to $113.53 billion. Analysts forecast $1.17 per share on revenue of $114.63 billion.
It expects third-quarter net income between $1.04 per share and $1.09 per share. Analysts had expected $1.05. For the full year, it now forecasts earnings per share to be in the range of $4.83 to $4.93. That is up from Wal-Mart’s original forecast of $4.72 to $4.92 per share. Analysts forecast $4.93.
Shares fell $2.30 to close at $72.15 Thursday. Investors, who pushed Wal-Mart’s stock down right after the allegations surfaced in late April, had sent shares up 25 percent since mid-May.
Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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