Wal-Mart lowers forecast due to food stamp cuts, bad weather
Wal-Mart Stores Inc. said Friday that U.S. sales figures for its fiscal fourth quarter would probably come in below earlier forecasts when they’re announced Feb. 20 due to the effects of volatile weather and cuts to the federal food stamp program.
The world’s largest retailer said in November that for the fourth quarter ended Jan. 31, it expected sales at American Wal-Mart stores open at least a year to be relatively flat. So-called same-store sales at its warehouse chain Sam’s Club were projected to be anywhere from flat to up 2%.
But on Friday the company said that sales would likely miss the mark, pushed down from stronger-than-expected pressure from a government reduction in the Supplemental Nutrition Assistance Program that went into effect Nov. 1.
Winter storms also caused store closings during the period, according to Wal-Mart, which has more than 11,000 units in its system.
The company said earlier this month that it was laying off 2,300 workers at Sam’s Club stores.
In midsession trading, Wal-Mart stock was down 6 cents to $74.69 after slumping earlier in the morning.
The company also said its total earnings for the fourth quarter and the full year would land at or slightly below the low end of its earlier predictions.
Wal-Mart had projected earnings per share of $1.60 to $1.70 for the quarter and $5.11 to $5.21 for the year.
But it said that store closures in Brazil and China along with non-income tax contingencies and employment claims in Brazil might dampen earnings more than expected.
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