Wal-Mart Stores said bad weather and reduced food stamp benefits in the United States had dragged down comparable-store sales in the fiscal fourth quarter, offsetting a positive bump from the holiday season.
The news came the same day the world's largest retailer shaved its quarterly outlook to account for special items, including those tied to its store closures in Brazil and China and its Sam's Club restructuring in the United States.
It now expects earnings for the fourth quarter ending January 31st to be at or slightly below the low end of its previous forecast of $1.60 to $1.70 a share.
"Wal-Mart caters to lower-income consumers which have been hit disproportionately hard relative to higher-income consumers," said Morningstar analyst Ken Perkins.
About 20 per cent of the company’s shoppers are food stamp users. About one in seven Americans took a hit in 2013 when the federal food stamps programme was cut by more than $5 billion. Additional cuts are expected this year. Wal-Mart was also facing serious “competitive threats” from dollar stores and other small-format stores, Mr Perkins added.
For the fiscal year, the company said it expected to report earnings at or slightly below the low end of its prior outlook of $5.11 to $5.21 a share. – (Reuters)
