NEW YORK: Weak US sales during the crucial holiday season and a string of costs related to international expansions forced a sharp drop in quarterly earnings at Wal-Mart Stores.
The world's largest retailer reported an 0.4 percent dip in same-store sales in the United States in the quarter to January 31, as customers confronted difficult winter weather, uncertain economic conditions and lower food stamp benefits.
Results were also marred by a series of write-offs in Walmart's international operations, including charges to cover tax assessments and labor claims in Brazil, the closure of underperforming stores in Brazil and China and the termination of a joint venture in India.
Quarterly earnings for the period ending January 31 fell 21 percent from $5.6 billion to $4.4 billion. Earnings per share fell to $1.37 from $1.68.
Stripped of the restructuring and tax charges from Brazil, China and India, and some US operations costs, Walmart said underlying earnings per share were $1.60, a penny above analyst expectations.
Revenues of $129.7 billion slightly lagged analyst forecasts of $130.23 billion.
The US results are a disappointment after Walmart executives vowed aggressive promotions heading into the crucial holiday season.
Although the company characterized traffic ahead of the "Black Friday" kickoff as brisk, it was unable to sustain the momentum. US comparable traffic fell 1.7 percent during the quarter from last year.
Winter weather has been a factor, shutting more than 200 stores during the most recent storm in February after the quarter ended.
Consumers are expected to remain tight-fisted in fiscal 2015. Walmart forecast first-quarter operating profits of $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 $468.7 billion.
Walmart shares were down 2.2 percent to $73.22 in early trade.
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