Wal-Mart Stores Inc on Thursday reported lower quarterly earnings and cut its sales outlook due to a stronger dollar and recent store closures, sending its shares down nearly 4 percent.
The world’s largest retailer said sales at U.S. stores open at least a year rose 0.6 percent in the fourth quarter ended on Jan. 31 from a year earlier. This was their sixth straight quarterly gain, but it missed market expectations for a rise of 1 percent.
For the current quarter, Wal-Mart said it expected a U.S. same-store sales increase of 0.5 percent, a slowdown from the year-earlier rise of 1.1 percent.
The retailer also said it expected net sales to be flat in its new fiscal year, down from a previous forecast for 3 percent to 4 percent growth.
The tepid sales forecast is troubling because it comes despite big investments in workers’ wages and sprucing up the stores, Edward Jones analyst Brian Yarbrough said.
“It’s the same old story,” he said. “They continue to struggle to drive traffic and sales.”
Wal-Mart said fourth-quarter net income fell 7.9 percent to $4.57 billion, or $1.43 a diluted share.
Excluding a charge for store closings and other items, earnings of $1.49 per share exceeded the analysts’ average estimate of $1.46, according to Thomson Reuters I/B/E/S.
Wal-Mart last month announced plans to close 269 stores globally, including 154 in the United States and 115 in Brazil and other Latin American markets.
Costs to boost employees’ wages and renovate stores have weighed on profits. Wal-Mart has also been investing heavily to build out its e-commerce infrastructure as it grapples with fast-growing online rival Amazon.com, another factor pinching margins in recent months.
Wal-Mart said operating income fell 16 percent to $6.6 billion in the quarter.
Consolidated revenue declined 1.4 percent to $129.7 billion, depressed by the stronger dollar’s impact on international operations.
Shares of Wal-Mart were down 3.9 percent at $63.50 in premarket trading on Thursday.