Price cuts help Wal-Mart boost profit by 11 per cent
14 Nov 2006
Mumbai: The world's largest retailer, Wal-Mart Stores Inc., reported an 11 per cent rise in third-quarter profit after it reduced prices of toys and generic drugs. Net income rose to $2.65 billion, from $2.37 billion a year earlier, said in a statement.
Sales rose 12 per cent to $83.5 billion from $74.6 billion.
The Bentonville, Arkansas-based retailer said third-quarter sales at US stores open at least a year rose 1.5 per cent, the slowest since 2005, as renovations at Wal-Mart stores and weak clothing sales hurt results. Chief executive officer H. Lee Scott has cut prices on electronics and appliances after falling gasoline prices failed to spur increased customer visits at US stores.
Wal-Mart lowered its full-year forecast to as much as $2.89 from as much as $2.95 the company provided on August 15.
Wal-Mart cut prices on toys for the holidays in mid-October and earlier this month marked down 50 small appliances and almost 100 electronics items, reducing a 42-inch Panasonic plasma television 28 per cent to $1,294. It also offered a $4 generic-drug plan in 27 states and plans to expand nationwide. Wal-Mart also added more expensive electronics and clothing as well as home goods in a bid to attract a broader range of shoppers.
