Wal-Mart sounds cautious note on Christmas
US consumers still cautious
November 13 2003
Wal-Mart has sent jitters through the US stock market by sounding a cautions note on Christmas sales.
Third quarter results for the world’s biggest retailer fell slightly short of analysts expectations, and Wal-Mat president and CEO Lee Scott warned: “We are still seeing cautious customers who are buying at the opening price points and who are timing their spending around receipt of their paychecks indicating liquidity issues. I also expect the season to be more competitive than normal.”
Total sales for the three months to the end of October were $62.5bn, up 13.1 per cent over the same period last year. However, Scott warned that from a sales perspective, August was the strongest month with September declining, and October weaker still. Wal-Mart’s gross margin also declined for the first time in two years.
Scott said: “The consumer is still very cautious and probably will remain so until we see further improvements in employment.”
Wal-Mart’s total US like-for-like sales for the quarter were up 6.1 per cent, and the company is forecasting like-for-like US store sales for the fourth quarter to increase by between 3 and 5 per cent.
The downbeat forecast was followed by muted trading on Wall Street, which has been hoping for strong Christmas retail sales to boost the US economy.
On a more positive note, Wal-mart reported that UK supermarket chain Asda saw low double digit growth in the third quarter, turning in another strong performance ([i]see accompanying story[/i])
