By Chelsey Dulaney
Wal-Mart Stores Inc. on Tuesday reported weaker-than-expected
sales and a 7% drop in profit, thought the retailer logged its
third straight quarter of same-store sales growth in the U.S.
Shares fell 2.2% in premarket trading.
Wal-Mart had been struggling with flat or falling sales recently
as customer traffic has remained tepid. But the company notched
gains two quarters of gains at the end of last year, helped by
operational improvements, lower gas prices and falling
unemployment.
In the latest quarter, U.S. same-store sales edged up 0.2%,
including fuel.
To turn around its struggling domestic business, Wal-Mart is
reinforcing its low-price image, and executives say the company is
improving store operations, like in-stock and service levels, which
had been neglected in recent years. It also is investing in its
online business and announced earlier this year that it would raise
the minimum wage paid to employees--moves that the big-box retailer
said could eat into its profits.
Overall, for the quarter ended April 30, Wal-Mart reported
earnings of $3.34 billion, or $1.03 a share, down from $3.59
billion, or $1.11 a share, a year earlier. Wal-Mart had expected to
post 95 cents to $1.10 a share in earnings.
Total revenue, which includes membership fees and other income,
edged down slightly to $114.8 billion from $115 billion a year
earlier, missing analysts' projections of $116.2 billion.
For the current quarter, Wal-Mart forecast earnings of $1.06 to
$1.18 a share. Analysts polled by Thomson Reuters had forecast
$1.17 a share in earnings.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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