Wal-Mart earn­ings miss es­ti­mates; com­pany cuts out­look

The Pak Banker - - COMPANIES/BOSS -

SAN FRAN­CISCO: Wal-Mart Stores Inc re­ported weaker-than-ex­pected quar­terly earn­ings and low­ered its full-year forecast on Tues­day, cit­ing in­vest­ments in staffing and weaker mar­gins in its U.S. phar­macy busi­ness.

Shares of the world's largest re­tailer fell 3.1 per­cent to $69.70 in heavy pre­mar­ket trad­ing. Net profit at­trib­ut­able to Wal-Mart fell to $1.08 per share, in the sec­ond quar­ter ended July 31 from $1.21 per share, a year ear­lier. An­a­lysts on av­er­age had ex­pected $1.12 per share, ac­cord­ing to Thom­son Reuters I/B/E/S. For the year end­ing in Jan­uary, Wal-Mart low­ered its earn­ings-per-share forecast to a range of be­tween $4.40 and $4.70 from a Fe­bru­ary out­look of $4.70 to $5.05. The mar­ket con­sen­sus was for $4.77 per share.

Wal-Mart said its prof­its were be­ing weighed down by a de­ci­sion to in­crease worker hours to the front of the store and stock­ing po­si­tions, part of its push to im­prove cus­tomer ser­vice. It also cited pres­sure on mar­gins in the U.S. phar­macy busi­ness and higher-than-ex­pected "shrink", a term in the re­tail in­dus­try that gen­er­ally refers to losses due to theft in the store. The com­pany said sales at stores open more than a year in­creased 1.5 per­cent in the 13 weeks ended on July 31 from a year ear­lier. An­a­lysts polled by re­search firm Con­sen­sus Metrix had ex­pected a 1.0 per­cent rise. Rev­enue came to $120.2 bil­lion in the sec­ond quar­ter, roughly un­changed from a year ear­lier.

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