Walmart has revised down its sales expectations for the year after its second-quarter results fell short of projections.
Although the retail giant’s profits rose by 1.3 per cent to US$4.1bn during the three months to July, same-store sales in the US fell by 0.3 per cent; falling below analysts’ expectations of a 1 per cent gain.
The firm said shoppers in the US had been hit by higher petrol and payroll taxes which cut their spending power, resulting in visits to Walmart stores in the US falling by 0.5 per cent.
Revenue also failed to live up to expectations; rising by 2.4 per cent to US$116.2bn, but below the US$118.47bn analysts expected.
Although international sales rose by 2.9 per cent to US$32.96bn in Canada, Mexico, Japan and other international markets, the retailer said it was insufficient to raise the division’s operating profit, which fell by 1.3 per cent.
Comparable sales in Canada, Mexico, Japan and the UK also fell, although they rose slightly in Brazil and China.
With the retail environment set to remain tough, Walmart has revised down its sales expectations for the year.
Walmart’s chief financial officer, Charles Holley, said the company now expects net sales to grow by 2-3 per cent, down from 5-6 per cent forecast earlier this year.
“The retail environment remains challenging in the US and our international markets, as customers are cautious in their spending,” Holley said.
Despite the weak outlook, the retailer’s chief executive officer remained optimistic.
“I’m encouraged by our position to execute in the second half of the year, particularly with the steps we’re taking to improve performance,” explained president and CEO Mike Duke.
