Wal-Mart, the world’s largest retailer, cut its earnings forecast today (8 January) after posting Christmas sales that failed to meet expectations.

Same-store sales rose by 1.7% in December and total sales dropped by 0.1% to US$46.51bn.

Wal-Mart’s performance was hampered by slow sales in its Sam’s Club and international businesses, where sales declined by 2.1% and 10.4% respectively.

“The current economy remains challenging for all businesses, and retailers have already seen customers pull back on discretionary spending. Consumers are very focused on value and necessities,” Tom Schoewe, Wal-Mart’s finance chief, said.

The retailer said that it now expects fourth-quarter earnings per share in a range of $0.91-0.94, down from previous guidance of $1.03-1.07.