Wal-Mart cuts profit outlook amid sluggish sales
The company said revenue rose roughly 3 percent to $119.34 billion from $116.1 billion in the same quarter a year earlier. Analysts expected $119.06 billion, according to Zacks.
In the U.S., revenue at stores open at least a year was unchanged from a year ago, including flat sales at Sam’s Clubs.
Sam’s Club, which is facing fierce competition from rival Costco, has been trying to rev up its business with trendier home and fashion assortments and offering more incentives in its membership program.
"Stronger sales in the U.S. businesses would’ve helped our profit performance in the quarter," said McMillon in a transcript of a prerecorded call Thursday. "We can get better operationally ... and we will."
Net sales increased 2.7 percent at the Wal-Mart U.S. discount business, while rising 3.1 percent in its international business and 2.3 percent at Sam’s Clubs.
Wal-Mart said it now expects earnings per share for the year to be in the range of $4.90 to $5.15 per share. That’s down from its previous guidance of $5.10 to $5.45 per share.
Wal-Mart said that the reduction in full-year profit projections assumes a continued challenging global economy. But Wal-Mart also said that far more U.S. employees and their families are enrolling in its health care plan than it expected.
As a result, it now expects the impact to be about $500 million for the fiscal year, which is about $170 million higher than the original estimate of about $330 million provided in February.
Wal-Mart is also investing more in its online business, including hiring people and building shipping centers.
Shares slipped 3 cents to $74 in morning trading.