Wal-Mart Stores has booked an increase in first-half earnings but lowered its full-year sales and profit guidance on the back of a “challenging” operating environment.
In the three months to the end of July earnings were up 1.2% to US$7.85bn, the US grocer reported today (15 August). Operating profit grew 1.3% to $13.2bn.
CFO Charles Holley, however, said the retail environment remains “challenging” in the US and in its international markets. In the US, comps were negatively impacted by lower consumer spending due to a pay-roll tax increase and lower inflation than expected, pushing comparable sales down 0.6%. That compared to 2.8% growth in last year’s second quarter.
Net sales grew 1.7% to $231.13bn but were below Wal-Mart’s expectations.
As a result, the retailer said it was revising its full-year forecast for net sales to grow between 2% and 3% for the full year versus its previous range of 5% to 6%.
Taking into account the “challenging” sales and operating environment, Wal-Mart also revised its EPS guidance to a range of between $5.10 and $5.30 per share from a previous forecast of $5.20 to $5.40.
Total sales for Wal-Mart US were up 1.2% to $135.28bn, with operating profit growing 5.5% to $10.85bn.
Its Sam’s Club chain also saw growth, with sales up 1.4% to $28.40bn and operating profit increasing 5.1% to $1.08bn.
Click here for Wal-Mart’s comments on its international business.
Click here to view the full earnings release.