Wal-Mart announced Q4 adjusted earnings of $US1.60 per share, which was a penny higher than analysts’ expectations.
Revenue climbed 1.5% year-over-year to $US129.7 billion, which was a hair below the $US130 billion expected.
U.S. comparable store sales fell 0.4% during the period.
And guidance was clearly weak. Management expects to earn $US1.10 to $US1.20 per share in Q1, which was lower than the $US1.24 expected by analysts.
“We expect economic factors to continue to weigh on our outlook,” said Wal-Mart CFO Charles Holley.”Some of the factors affecting our consumers include reductions in government benefits, higher taxes and tighter credit. Further, we have higher group health care costs in the U.S.”
“These concerns, combined with investments in e-commerce, will make it difficult to achieve the goal we have of growing operating income at the same or faster rate than sales,” Holley continued. “In October, we forecasted a 3 to 5 per cent net sales increase for fiscal 2015. Given these factors and the ongoing headwind from currency exchange, we expect to be toward the low end of the net sales guidance.”
The early read on Q2 isn’t great.
“Comp sales were down in the first two weeks of February due to continued severe winter storms,” said Walmart U.S. president Bill Simon. “At the height of the storm, we had more than 200 stores closed. We’re optimistic about the balance of the quarter and believe we will have a positive sales comp for the rest of the period.”
The stock is trading down modestly.