Wal-Mart earnings miss estimates; company cuts outlook
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.