Wal-Mart cuts annual outlook for 2nd time in 3 months
NEW YORK — Wal-Mart shoppers — much like many Americans — still feel like they're in a recession.
In the uneven economic recovery, their bills are going up, but their wages are not. While the well-heeled crowd benefits from gains in the stock market, Wal-Mart shoppers are struggling with a higher payroll tax. And shopping for bargains isn't a hobby, but a necessity.
For these reasons, the world's largest retailer on Thursday cut its annual outlook for the second time in three months and gave fourth-quarter guidance that's below Wall Street's expectations.
The forecast shows how vulnerable Wal-Mart — and its customers — are to economic ups and downs. Wal-Mart shoppers, who on average make $45,000 a year, were squeezed by the recession that began at the end of 2007 and have struggled to recover since it ended in 2009.
They've been dealing with a 2 percentage point increase in the Social Security payroll tax since Jan. 1. A partial 16-day government shutdown this year hurt business in areas with large military bases. And the Nov. 1 expiration of a temporary boost in government food stamps could hurt customers' ability to spend, though the discounter said it's too early to know.
Wal-Mart earned $3.74 billion, or $1.14 per share, in the three months ended Oct. 31. That compares with $3.64 billion, or $1.08 per share, a year earlier. Net sales rose 1.6 percent to $114.88 billion. On a constant currency basis, net sales would have been $116.2 billion.
Analysts were expecting earnings of $1.13 per share on net sales of $116.9 billion.
Overall, total sales increased 2.4 percent for Wal-Mart's U.S. business, 1.1 percent at Sam's Clubs and 0.2 percent at Wal-Mart's international business.
But Wal-Mart reported a decline in a figure that the industry uses to gauge a company's performance. Revenue at stores open at least a year fell 0.1 percent for all U.S. stores but included a 1.1 percent increase at Sam's Clubs.
Wal-Mart said it expects adjusted earnings per share to be $1.60 to $1.70 for the fourth quarter. For the year, it expects $5.11 to $5.21, compared with its forecast of $5.10 and $5.30 per share in August. That was downgraded from May's forecast.
Analysts expected adjusted earnings of $1.69 per share for the fourth quarter and $5.19 per share for the year, according to research firm FactSet.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Michigan man takes Heinz to court over Dip & Squeeze ketchup packet
- Stocks fall for 4th straight day; oil surges on Yemen strikes
- Toyota to carry new attitude into production
- Federal government eyes regulation of payday lending
- Energy Department OKs loan of $259M to Alcoa to promote clean energy
- Federal Trade Commission cracks down on crooked vehicle sales
- One secret Facebook doesn’t want you to know
- Court approves LightSquared’s bankruptcy exit plan
- Stop foreign dumping, U.S. Steel CEO Longhi tells Congress
- Pittsburgh angles to keep Heinz headquarters in merger
- Heinz merging with Kraft in mega-deal; headquarters to stay in Pittsburgh