Wal-Mart Cuts Outlook
August 18 2015 - 7:46AM
Dow Jones News
By Chelsey Dulaney
Wal-Mart Stores Inc. on Tuesday slashed its earnings guidance
for the year and gave a soft outlook for the current quarter as
wage increases and currency fluctuations pressure profit at the
world's largest retailer.
Shares fell 2.3% in premarket trading.
For the year, the company is now expecting earnings of $4.40 to
$4.70 a share, down from its previous forecast for $4.70 to $5.05 a
share.
For the current quarter, Wal-Mart forecast earnings of 93 cents
to $1.05 a share. Analysts polled by Thomson Reuters had forecast
$1.08 a share.
"Even if it's not as fast as we would like, the fundamentals of
serving our customers are consistently improving," said Chief
Executive Doug McMillon in a news release. "In this case, our
desired changes require investments, which are pressuring earnings
this year."
Meanwhile, for the second quarter, Wal-Mart posted a 1.5%
increase in U.S. sales, above the company's expectation for 1%
growth, as it drew more shoppers to its stores for the third
straight quarter after a long period of declines.
Wal-Mart has now notched four straight quarters of sales growth
in the U.S. as the company has moved to improve store operations by
offering fresher produce and better customer service.
Still, profit continued to be dented by costly investments in
wages and e-commerce. Foreign currency movement also ate into
profits to the tune of four cents a share.
In all for the period ended July 31, Wal-Mart said profit fell
to $3.48 billion,, or $1.08 a share, from $4.09 billion, or $1.26 a
share, a year earlier. Wal-Mart had forecast $1.06 to $1.18 a share
in earnings.
Revenue edged up slightly to $120.2 billion from $120.1 billion
a year earlier. Analysts had forecast $119.7 billion, according to
Thomson Reuters.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
August 18, 2015 07:31 ET (11:31 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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