Business

Wal-Mart sees Yule as not gift-wrapped

Wal-Mart posted better-than-expected quarterly profits, but warned that its working-class clientele may clamp down on holiday spending.

The world’s biggest retailer said strong inventory controls helped it eke out a 3.2 percent profit gain for the third quarter. Still, Wal-Mart said earnings for the crucial fourth quarter could miss Wall Street’s estimates as lower-income shoppers grapple with the recession.

“Customers continue to tell us they’re concerned about their own finances and unemployment,” said Wal-Mart US Chief Eduardo Castro-Wright.

In response, Wal-Mart has been slashing prices aggressively on everything from children’s clothing to video games as the Christmas shopping season ramps up.

Last month, the big discounter’s Web site slashed prices on 10 bestselling books and DVDs, jolting online rival Amazon.com to do the same.

Yesterday, Wal-Mart Treasurer Charles Holley said the online discounts drew “record hits” to the company’s Web site and that the company hasn’t lost money on those sales.

Wal-Mart’s third-quarter profit was $3.24 billion, or 84 cents a share, up from $3.14 billion, or 80 cents a share, a year earlier.

Sales rose 1.1 percent to $98.67 billion.

Wal-Mart CEO Mike Duke said improved efficiencies helped results beat the Street’s expectations.

Duke earlier this year replaced former CEO Lee Scott, who this week said he will join a private-equity firm co-founded by Mitt Romney’s son.

Wal-Mart shares ended trading yesterday at $53.24, up 27 cents or 0.5 percent.