Wal-Mart Stores, Inc. (NYSE: WMT ): Q3 2012 Earnings Preview

Wal-Mart Stores, Inc. (NYSE: WMT ) is expected to report its earnings on Nov 15, 2011.

For the quarter ended October 2011, the company is likely to report revenue of $106.7 billion, an increase of 4.7 percent over the same quarter a year ago. ?Operating profit is likely to come in at $6.76 billion, compared with $5.61 billion in the same quarter a year ago. Net profit is likely to come in at $3.97 billion, compared with $3.43 billion the same quarter a year ago.

China sales were affected due to a two-week shutdown tied to labeling of its pork products at its Chongqing stores. In addition, risks from food safety and capricious regulators in China remain a challenge to the company.

In the past 14 to 15 months, Wal-Mart shifted its merchandising focus back to a basic assortment of socks, underwear, T-shirts and jeans, and the move seems to be paying off. September, same-store sales of socks, underwear and jeans saw gains. Boosting apparel sales is key to the company's profit as that's among the areas that generate higher gross margins than the commodity consumable products. Sales of popular toys should have also increased as I expect the company to have gained some market share from rivals such as Target, Kmart, and Amazon.

Net-on-net, the company is likely to report EPS of $0.96 for the quarter ended October 2011, compared with $0.9 in the year-ago quarter.

In October, female workers in California launched the first in an expected series of regional suits against the company. I expect the company to provide details on how it is going tackle this issue. I expect the company to provide details on how it will face regulators in South Africa after the government filed a lawsuit compelling the review of its prior approval of Wal-Mart's purchase of Massmart.

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