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BENTONVILLE, Ark. — Walmart posted a 5% decline in fiscal first quarter profit, as revenue rose a modest 0.8%. Sales at U.S. stores declined for a fifth consecutive quarter.
Walmart posted a 5% decline in fiscal first quarter profit, as revenue rose a modest 0.8%. Sales at U.S. stores declined for a fifth consecutive quarter.
Executives at the world’s largest retailer said bad weather was partially to blame for earnings coming in below Wall Street’s expectations.
"Like other retailers in the United States, the unseasonably cold and disruptive weather negatively impacted U.S. sales and drove operating expenses higher than expected," said Doug McMillon, who took over as Walmart’s president and chief executive officer on February 1.
Walmart lowered its forecast for second quarter profit to reflect higher U.S. health care costs and increased spending on the Sam’s Club membership program, said Charles Holley, the retailer’s chief financial officer.
Holley said the severe winter weather decreased first quarter results by 3 cents a share.
The fact that second quarter guidance was "meaningfully below consensus" suggests that not all of Walmart’s first quarter disappointment can be pinned on the weather, Mark Miller, a retail analyst with investment bank William Blair & Co., wrote in a note to clients.
"We remain concerned by negative traffic trends (except for the U.K.) as well as inventory growth that far outpaced sales growth in the quarter," Miller wrote. "We maintain our underperform rating as we continue to believe Walmart’s size and complexity reduces dynamism and growth."
E-commerce was a bright spot in the first quarter, as online sales jumped 27% worldwide.
"We have the opportunity to create transformative growth through stronger e-commerce capabilities," McMillon said.
