Retail giant Wal-Mart Stores, Inc. (WMT) reported Thursday a profit for the first quarter that edged up slightly from last year, but results fell short of market expectations due in part to soft U.S. sales.
The company also provided earnings guidance for the second quarter below Street view, but issued positive comp sales forecast for the U.S. businesses.
The world's largest retailer reported net income of $3.78 billion or $1.14 per share for the first quarter, higher than $3.74 billion or $1.09 per share in the year-ago quarter.
On average, 22 analysts polled by Thomson Reuters expected earnings of $1.15 per share for the first quarter. Analysts' estimates typically exclude special items.
Walmart's revenues for the quarter increased 1.0 percent to $114.19 billion from $113.01 billion in the same quarter last year, but missed sixteen Wall Street analysts' consensus estimate of $116.42 billion.
Total net sales rose 1.0 percent to $113.43 billion from last year, and included a negative currency exchange rate impact of $1.0 billion. Total comparable store sales grew 1.2 percent. Constant currency sales grew 1.8 percent to $114.24 billion.
The company noted that comp sales performance was impacted by a delay in income tax refund checks, challenging weather conditions, less grocery inflation than expected and the 2 percent payroll tax increase.
Meanwhile, membership and other income increased 1.6 percent. The company's e-commerce sales grew more than 30 percent from last year.
Walmart U.S. net sales edged up 0.3 percent to $66.55 billion, but reported negative comparable store sales of 1.4 percent, without fuel. Walmart U.S. also grew operating income faster than sales this quarter at 5.9 percent. Despite comps being lower than expected, the company continued to generate market share gains in the U.S.
Sam's Club net sales grew also edged up only 0.1 to $13.87 billion, with comparable sales, without fuel, increasing 0.2 percent. Operating income grew sharply faster than sales at 6.6 percent.
Meanwhile, Walmart International net sales grew 2.9 percent to $33.01 billion, while operating income declined 4.7 percent. On constant currency basis, net sales would have increased 5.4 percent. Walmart International gained market share in in seven of its eleven markets in which it operates.
Walmart's consolidated operating income increased 1.1 percent to $6.46 billion, and grew slightly faster than sales.
Looking ahead to the second quarter, the company expects earnings in a range of $1.22 to $1.27 per share. Street is looking for earnings of $1.29 per share for the quarter.
The company also projects comparable store sales growth at Walmart U.S. of flat to 2 percent, and at Sam's Club, without fuel, of 1.0 to 3.0 percent.
"I'm confident about our long-term strategy and the direction Walmart is headed. Our expectations about our U.S. businesses' performance, coupled with more discipline in International, will allow us to improve our performance throughout the year," Duke added.
WMT closed Wednesday's regular trading session at $79.86, up $1.06 on a volume of 8.0 million shares. In the past 52 weeks, the stock traded in a range of $61.25 to $79.96.
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