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Thursday, October 20, 2016

New York (AFP) – U.S. retail giant Wal-Mart Stores Thursday reported a 21 percent drop in quarterly earnings due to weak U.S. sales, and gave a tepid forecast for the upcoming year.

Quarterly earnings for the period ending January 31 fell from $5.6 billion to $4.4 billion. A big factor was a 0.4 percent decline in same-store Walmart stores in the U.S., as customers confronted difficult winter weather, uncertain economic conditions and lower food stamp benefits.

The results translated into underlying earnings per share of $1.60, a penny above analyst expectations. Revenues of $129.7 billion slightly lagged analyst forecasts of $130.23 billion. The period was the fourth quarter of Walmart’s fiscal 2014.

Walmart executives vowed to turn around its performance in the closely-watched same-store U.S. sales category, which has lagged in recent quarters amid an uncertain U.S. employment outlook.

The retail giant has unveiled a major capital campaign to build smaller stores around the U.S. to broaden its appeal with customers. It now plans to open as many as 300 new small stores in fiscal 2015 and will spend an additional $600 million on the endeavor.

Walmart said earnings for the upcoming first quarter of 2015 will be $1.10-$1.20 per share, below the $1.23 now forecast by analysts.

“We expect economic factors to continue to weigh on our outlook,” said Walmart chief financial officer Charles Holley. “Some of the factors affecting our customers include reductions in government benefits, higher taxes and tighter credit.”

Holley said net sales growth in 2015 would come in on the low end of the previous projection for 3-5 percent growth.

Annual earnings in 2014 were $16.0 billion on revenues of $476.3 billion, compared with 2013 profits of $17.0 billion on revenues of $476.3 billion.

Walmart shares were up 1.1 percent to $74 in pre-market trade.

AFP Photo/Frederic J. Brown

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  • docb

    Karma is a wonderful thing…more of this!

  • dana becker

    Oh my God. Where can I send my extra SNAP money so the Waltons don’t starve?

  • Independent1

    If Walmart really believes the decline in recent sales is all about a ‘weak economy’, they’re in for a rude awakening. Many of us (at least in my family and group of friends) are hoping that the recent decline is just the beginning of Walmart’s demize. No company in America deserves to be in decline more than Walmart; it’s business practices are absolutely disgusting: from contracting with foreign companies that have atrocious business practices themselves (some which employ child labor and are in total contrast to Sam Walton’s desire to focus on selling Americans, American made products); to driving even many American companies out of business or to the verge of bankruptcy because of Walmart’s retail dominance and absurd pricing practices (both competitors and suppliers by the way); to refusing to pay the majority of their employees a living wage; everything about the way Sam Walton’s heirs have reworked Walmart is wrong.

    Virtually all of our family and close friends are fed up with Walmart’s business practices and are doing everything we can to avoid buying anything from Walmart. And in case Walmart hasn’t noticed lately, Amazon and other internet retailers’ sales have grown considerably over the past couple of years; actually to the point where Amazon is losing money because so many customers have been taking advantage of Amazon’s free shipping via its Prime program. Why should we drive 35 miles to the nearest Walmart,just to be subjected to shopping in a substandard store environment when we can spend a few minutes on line and buy anything we could purchase from Walmart even cheaper and with free shipping if we find it on Amazon; or with shipping costs just as cheap as the cost of gas and extra time for a 70 mile round trip to Walmart.

    Many of us are hoping that within 5 years, Walmart will be a thankful distant memory.