GO
Loading...

Enter multiple symbols separated by commas

Wal-Mart Shares Fall as Results Disappoint, Company Cuts Forecast

Wal-MartStoresposted quarterly sales and profit that fell short of expectations, and lowered its earnings forecast, saying that customers remain under economic pressure.

WalMart
WalMart

Shares of the Dow component fell more than 5 percent on the New York Stock Exchange Tuesday.

The world's largest retailer reported earnings of $3.1 billion, or 76 cents a share, for the second quarter ended July 31, up from earnings of $2.08 billion, or 50 cents a share, in the year-ago period. But excluding one-time items, the company earned 72 cents a share, flat with earnings from continuing operations in the same quarter a year ago.

Revenue rose 7.7% from the year-ago period to $91.99 billion.

Analysts surveyed by Thomson Financial predicted profit of 76 cents a share on revenues of $92.8 billion.

The company earlier said it expected to earn between 75 cents and 79 cents a share for the period.

Wal-Mart reduced its full-year earnings estimate from continuing operations to $3.05 to $3.13 a share from $3.15 to $3.23 a share. Analysts had predicted a full-year profit of $3.16 a share. For its fiscal third quarter, Wal-Mart sees earnings of 62 to 65 cents, below the consensus estimate of 68 cents a share.

"I certainly think that (the results have) come as a little bit as surprise, not necessarily the second quarter number, but when you look at the second-half and guiding down for the year, the market's saying that's a disappointment," John Lawrence, senior retail analyst at Morgan Keegan, told "Squawk Box."

The home and domestic products business needs to turn around a little bit, but overall Wal-Mart is just being cautions "with the economy where it is," Lawrence said.

Modest Same-Store Sales Growth Seen

Same-store sales for the second quarter rose 1.9% and the company said it expects third-quarter same-store sales to be higher by between 1% and 3%.

Chief Executive Lee Scott blamed the disappointing performance on economic pressure around the world.

"It is no secret that many customers are running out of money toward the end of the month," Scott said on a recorded conference call, citing consumer pressures ranging from high gas prices to the U.S. housing slump.

"Many customers around the world continue to be under economic pressure and they expect Wal-Mart to be their advocate," Scott said.

Generally, grocery sales have been stronger than general merchandise at Wal-Mart. Apparel and home products sales have been weak as the housing continues to show weakness.

Contact U.S. News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Don't Miss

  • Lottery ticket

    A thief who broke into the car of a Seattle couple left behind a million-dollar lottery ticket, NBC News reports.

  • The Lamborghini SpA Urus SUV.

    There's no shortage of luxury vehicle choices, but increasingly the wealthy are opting for high-end SUVs instead of traditional models.

  • Mike Trout #27 of the Los Angeles Angels takes a picture with fans before a game with Boston Red Sox at Fenway Park on May 23, 2015 in Boston, Massachusetts.

    MLB is using digital media initiatives like Snapchat and Web video to connect with younger viewers. Is it enough?

U.S. Video

  • Cramer: Here's the no. 1 play in cybersecurity

    Guarding Your Portfolio? "Mad Money" host Jim Cramer's got the number one pick for protection services in today's digital world.

  • Underestimate Cisco at own peril: Cramer

    Mad Money's Jim Cramer takes a look at the cybersecurity space to see if it could also protect your money.

  • Fly with LUV?

    While remaining profitable, Gary Kelly, Southwest Airlines chairman and CEO, tells Mad Money's Jim Cramer the company continues to focus on being a great airline and offering great customer service.