Wal-Mart beat revenue estimates but missed on earnings, in a report that sent shares sliding and led to fresh questions about the company's wage boosts.
Wal-Mart said Tuesday its operating margin slid to 5.1 percent in the most recent quarter, down from 5.6 percent a year ago. The company said that issues in its pharmacy business and "shrinkage" (stealing plus spoilage) plus "higher wage investments" led to the problem with its bottom line.
In April, the retailer raised its lowest starting wages to $9 per hour, with a promise to raise them to $10 by February. On the company's earnings call, Wal-Mart U.S. CEO Greg Foran repeatedly referred to the hike as an "investment."
The company said that increased wages and hours will take a 24-cent bite out of earnings per share, a bit more than previously anticipated. The company now expects to earn $4.40 to $4.70 per share in the full year.