Wal-Mart's, Target's Stores Segments Notch Same 11.8% Fis. Q3 Sales Hike

As the economy continues to sputter, and more consumers choose to shop at discount retailers, numbers for the stores segments of both Wal-Mart and Target are on the rise. And, coincidentally, both enjoyed an 11.8 percent jump in sales during their fiscal third quarters.

The nation's largest retailer, based in Bentonville, Ark., registered an 11.8 percent sales increase at its Wal-Mart stores segment during its fiscal third quarter, reaching $37.6 billion, up from $33.6 billion in the year-ago period. Comp-store sales rose 4.2 percent.

Fiscal third-quarter revenue at the Target Stores segment of Minneapolis-based Target Corp. also climbed 11.8 percent, hitting $8.5 billion, compared with $7.6 billion in the year-ago period. Comp-store sales rose 1 percent.

Operating profit in the Wal-Mart stores segment jumped 15.5 percent during the third quarter, reaching $2.7 billion, compared with $2.3 billion in the same three months last year.

Sam's Club sales for the three months, ended Oct. 31, increased 6.1 percent, to $7.7 billion, up from $7.3 billion in the same period in 2001. Wal-Mart's warehouse club segment, however, reported only a slight increase in comp store results for the third quarter, coming in at 0.4 percent.

Sam's Club had an operating profit for the third quarter of $240 million, a decrease of 2.4 percent, compared with the $246 million recorded in the same three months a year ago.

For the nine months, the Wal-Mart stores segment enjoyed a 13.7 percent sales climb, reaching $111.6 billion, up from $98.2 billion in the previous year. Same store sales rose 6.6 percent, while operating profit hit $8.3 billion, an increase of 16.3 percent, compared with the $7.1 billion registered year-on-year.

Sam's Club in the nine months recorded an 8.9 percent sales increase, to $23 billion, up from $21.1 billion in the same period a tear ago. Comp store sales for the period hit 3.4 percent, while Sam's operating profit reached $733 million, an increase of 0.3 percent when compared with the $731 million notched in a similar period the previous year.

Consolidated Wal-Mart sales and earnings for the third quarter broke company records, with sales totaling $58.8 billion for the three months, up 11.5 percent from the $52.7 billion reported year over year. Total company comp store sales were up 3.5 percent in the quarter, while net income was $1.8 billion, an increase of nearly 23 percent over the $1.5 billion reported in the same three months in 2001.

Even with a relatively soft sales performance during the third quarter, the Target Stores segment pushed its pre-tax profit up 21.2 percent, to $537 million, from $444 million in the same three months in 2001.

Target Stores registered a 19.3 percent increase in Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) in the three months, ending Nov. 2, hitting $774 million, compared with EBITDA of $651 million year-on-year.

For the nine months, the Target Stores segment enjoyed a 15.4 percent revenue hike, reaching $25 billion, up from $21.6 billion in the same period last year. Comp-store sales rose 4 percent.

Pre-tax profit soared 31 percent at Target Stores in the nine months, hitting $1.9 billion, up from $1.5 billion in the year-ago period, while EBITDA jumped 27.3 percent, to $2.6 billion, from $2 billion the previous year.

Consolidated Target Corp. revenue in the third quarter increased 9.3 percent, to $10.2 billion, moving up from the $9.3 billion recorded in the same period in 2001. Comp-store sales rose 0.1 percent. Consolidated sales include revenue from Mervyn's and Marshall Field's.

Third quarter consolidated net earnings were $277 million, a 50.2 percent rise over the $185 million posted in last year's third quarter. Target had registered a pretax charge of $67 million in the prior year's quarter.

In the fourth quarter, Target said its outlook for earnings growth is modest in light of last year's strong performance.