Wal-Mart international growth slows, shares fall

Thu Aug 16, 2012 2:38pm EDT
 
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By Jessica Wohl

(Reuters) - Wal-Mart Stores Inc's (WMT.N: Quote) full-year profit may miss analysts' expectations as growth slows in its international markets, pressuring the company even as its U.S. discount stores continue to prosper.

The world's largest retailer, viewed as a barometer of economic activity, said on Thursday its cash-strapped customers tend to spend more at the beginning of the month when they get their paychecks. That "paycheck cycle" has extended its reach to the company's markets beyond the United States.

"It became more pronounced across the globe," Chief Financial Officer Charles Holley told reporters, without naming any specific markets where he sees the shift.

Wal-Mart's higher second-quarter profit narrowly beat the average estimate of analysts polled by Reuters. While the company raised its earnings outlook for the full year, that could still miss analysts' expectations.

Wal-Mart shares were down 3.4 percent at $71.91, erasing recent gains, and were the worst performer in the Dow Jones industrial average .DJI in afternoon trading.

In the United States, Wal-Mart's largest market, shoppers' top concerns are employment, gas prices and higher food costs, Holley said.

Other retailers, too, added to concerns about the plight of lower-income U.S. consumers.

Dollar Tree Inc (DLTR.O: Quote) forecast quarterly earnings below Wall Street estimates on Thursday. <ID:L2E8JF9QZ> And Sears Holdings Corp (SHLD.O: Quote) said U.S. same-store sales fell 4.7 percent at the Kmart discount chain.   Continued...

 
Re-useable Walmart bags are seen in a newly opened Walmart Neighborhood Market in Chicago September 21, 2011. REUTERS/Jim Young