Wal-Mart shares fell 0.5% to $78.47 at 9:40 a.m. in New York. The stock had gained 16% this year through yesterday, compared with a 25% increase for the Standard & Poor’s 500 Index.
Net income in the third quarter rose 2.8% to $3.74 billion, or $1.14 a share, from $3.64 billion, or $1.08, a year earlier, the company said. The average of 26 analysts’ estimates compiled by Bloomberg was $1.13. Revenue increased 1.7% to $115.7 billion, trailing the $116.8 billion average projection.
Sales at Menomonee Falls, Wisconsin-based Kohl’s Corp. also trailed analysts’ estimates, falling 1% to $4.44 billion, compared with the $4.55 billion average projection. The shares slid 7.3% to $53.99.
Sales in Wal-Mart’s international division increased 0.2% to $33.1 billion. Excluding the effect of foreign- currency fluctuations, sales would have risen 4.1% to $34.4 billion.
The company has been working to reintroduce its everyday low price strategy in Brazil and China after struggling to find strong sales growth in both markets. Wal-Mart said last month that it plans to add as many as 110 stores over three years in China, while shutting some outlets and remodeling dozens more. The retailer also named two new managers, in business development and real estate, to its China team last month.
The U.S. Department of Justice and the U.S. Securities and Exchange Commission are investigating allegations that Wal-Mart systematically bribed Mexican officials so it could more quickly open stores in the country. Federal and local government agencies in Mexico also are involved in investigations. Wal-Mart said in a November filing that it also has started inquiries into potential violations of the FCPA at operations in Brazil, India and China.
The company said today that expenses related to probes of those possible violations of the Foreign Corrupt Practices Act were $69 million in the quarter, less than its guidance of $75 million to $80 million. Those expenses will be about $75 million to $80 million in the fourth quarter.
Third-quarter sales in Wal-Mart’s Sam’s Club warehouse division rose 1.1% to $14.1 billion.