Washington: Wal-Mart Stores Inc reported a surprise decline in quarterly same-store sales in the United States, its biggest market, after shoppers came in less often because higher taxes and gasoline prices were leaving them with less spending money.
The world’s largest retailer also cut its revenue and profit forecasts for its fiscal year, raising concerns about retail spending as the all-important holiday season nears. It cited weak results from the United States, as well as Canada, Mexico, Japan and other international markets that it is relying on for long-term growth.
Shares of Wal-Mart were down 2.4 percent at $74.59 in midday trading.
US sales at stores open at least a year at the company’s main Walmart chain fell 0.3 percent in the second quarter ended in late July, the company said yesterday. Wall Street analysts were expecting a 1 percent gain, according to Thomson Reuters.
Visits to those stores also fell 0.5 percent during the quarter.
“That low-income customer is really struggling now, and that’s hitting Walmart,” Edward Jones analyst Brian Yarbrough said.
Shoppers are contending with higher payroll taxes after a two-year cut ended in January, as well as high gas prices and a slow recovery in employment.
Wal-Mart’s results came a week after a group of US retailers reported modest gains in July same-store sales because they had to resort to bargains to lure shoppers who remained careful of their spending.
Wal-Mart expects little improvement going into the fall. It forecast flat US same-store sales in the current quarter, which includes the back-to-school season. Back-to-school is often seen as a barometer for the holiday period, when retailers get about 30 percent of sales and 40 percent of profits.
Wal-Mart now expects overall sales to be up between 2 percent and 3 percent for the fiscal year, down from an earlier forecast of a rise of 5 percent to 6 percent.