Shares in US retail giant Wal-Mart slid almost 3% in pre-open trading this morning (16 August), despite a 5.7% increase in second-quarter net income and an improved full-year outlook.
The company said today that net income in the three months to 31 July totaled US$4.02bn, up from $3.80bn in the comparable period of last year.
Net sales increased 4.5% to reach $113.5bn in the quarter. In the US, sales increased a total of 3.8% over the quarter to reach $67.3bn. US comparable-store sales rose 2.2%, its fourth consecutive quarter of positive ID sales. Meanwhile, Wal-Mart's international division recorded 6.4% growth to reach $32bn.
Wal-Mart also raised and narrowed its full-year EPS guidance range to $4.83-4.93, up from previous guidance of $4.72-4.92.
However, in pre-market trading Wal-Mart shares fell 2.17% to $72.43 because sales failed to meet street estimates, primarily due to a $2.2bn hit from currency exchange.
Janney analyst David Strasser attributed the early decline in stock price to some "profit taking" after a "strong run", which saw shares climb 25% over the past quarter.
Nevertheless, Strasser maintained that Wal-Mart stock remains an attractive option. "The capital allocation story and business momentum will give this stock legs going forward," he suggested..
