Wal-Mart Stores Inc. on Tuesday provided further evidence that it’s the discount and middle markets that won the third-quarter retail race.

While the company said investments in employees and technology, as well as currency fluctuations, once again impacted its bottom line, it beat Wall Street estimates and its shares rose 3.5 percent to close at $59.92 on the New York Stock Exchange. Wal-Mart reported third-quarter earnings per share of $1.03, beating estimates by 5 cents. EPS in the third quarter was down 10.4 percent compared with EPS of $1.15 in last year’s third quarter.

The retailer said the investments in wages and training in the U.S. negatively impacted earnings by 10 cents a share, while currency exchange rates had a negative impact of 4 cents a share.

Net income tumbled 11 percent to $3.3 billion in the third quarter ended Oct. 31, from $3.7 billion in the same quarter a year ago. Revenue slipped 1.3 percent to $117.4 billion in the current third quarter, from $119 billion in the fiscal-year 2015 third quarter. On a constant currency basis, revenue increased 2.8 percent to $122.4 billion.

Wal-Mart logged its fifth consecutive positive comp, up 1.5 percent in the quarter.

Net sales at Wal-Mart U.S. rose 3.8 percent to $72.7 billion from $70 billion in last year’s third quarter.

Wal-Mart International net sales were $29.8 billion in the third quarter of 2016, an 11.4 percent decline from $33.6 billion in the 2015 third quarter. On a constant currency basis, international net sales were $34.7 billion.

Operating, selling and general administrative expenses increased 3.2 percent to $24.2 billion in the 2016 third quarter from $23.5 billion last year.

U.S. consolidated operating income declined 8.8 percent in the quarter due to the wage hike for sales associates, and dropped 6.4 percent at Wal-Mart International as the company was impacted by the strong dollar.

“Our operating income continued to be pressured by our investment in our front-line associates,” said Doug McMillon, chief executive officer of Wal-Mart Stores Inc. “We’re making a $1.2 billion planned investment in our people this year, and we understood it would impact our operating income this year.”

In terms of the company’s investment in technology, McMillon said, “We’ll be the first to deliver a seamless shopping experience at scale. There’s a race to do this right, but only Wal-Mart can deliver a dense network of stores” and sophisticated supply-chain and distribution system.

The ceo said Wal-Mart will add between $45 billion and $60 billion in revenue to the company in the next three years. “That’s a lot of growth,” he said. “It just happens to be on a big base.”

Greg Foran, ceo of Wal-Mart U.S., said the division saw growth in apparel, hardlines, home and seasonal merchandise, but entertainment was challenged. “While only just beginning to show in our results, we are pleased with our efforts thus far on addressing shrink, which has been a significant headwind for us this year,” Foran said.

Wal-Mart U.S. in the third quarter intentionally added store labor hours above its initial plans and incurred “significant maintenance expenses related to these customer-facing areas,” Foran said. “These investments, along with the wage increases and store structure changes implemented earlier this year, drove the majority of the 116 basis-point deleverage in operating expenses.”

Total inventory in the third quarter grew about 1 percent, which was less than half the rate of sales. Inventory declined 1.9 percent in existing stores and new processes and technology reduced inventory across the store, while improving in-stock levels.

In the third quarter, 15 Supercenters opened in the U.S., including relocations and expansions, and 35 Neighborhood Markets were unveiled.

Mexico and Canada posted strong positive comps in the third quarter, while the U.K., Brazil and China posted negative comps. Walmex net sales increased 7.4 percent and net sales in Canada advanced 5.7 percent. Sales in China grew 2.7 percent, driven by new store openings; however, comps declined 0.7 percent.

During the third quarter, global e-commerce sales and gross merchandise value grew at about 10 percent, primarily due to continued economic challenges in major international markets such as Brazil, China and the U.K.

“We see that e-commerce, online grocery and convenience are critical in the dense urban areas that make up so much of the Chinese opportunity,” McMillon said. “That’s why our Yihaodian acquisition is of such strategic significance.”

Sam’s Club in the U.S. posted comp-store sales without fuel at the low end of the company’s guidance.

A competitive holiday season, food inflation is expected to remain low and an anticipated significant drop in fuel prices will make comparisons with last year’s fourth quarter difficult, Foran admitted.

For the 13 weeks ending Jan. 29, Wal-Mart U.S. expects a 1 percent comp-sales increase, which would represent a 50 basis-point improvement in the two-year comp stack from the third quarter. Last year’s fourth-quarter comp was up 1.5 percent, representing the retailer’s strongest comp performance of fiscal 2015.

Outgoing chief financial officer Charles Holley updated the company’s full-year EPS guidance to between $4.50 and $4.65, including guidance for the fourth quarter of $1.40 to $1.55. He cited as headwinds investments in wages, training and additional labor hours in stores, investments in global e-commerce and pharmacy margins and shrink. “Currency remains a significant headwind for us,” Holley said.

“We will continue to review our portfolio including stores and clubs,” Holley said. “We may have charges related to closing businesses or stores and clubs.”

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