Wal-Mart sales growth weakest in five years, outlook cautious
By Siddharth Cavale
(Reuters) - Wal-Mart Stores Inc forecast second-quarter profit below analysts' estimates after reporting its smallest growth in quarterly sales in nearly five years, as a severe winter kept shoppers from its stores.
Shares of the world's largest retailer fell as much as 3.4 percent before the bell on Thursday.
Wal-Mart is the latest retailer to flag a colder-than-usual winter for weak sales. Department store operator Macy's on Wednesday cited the harsh winter for a 1.7 percent decline in quarterly sales.
Shoppers found it difficult to visit Wal-Mart's gargantuan stores, mainly located on the outskirts of towns and cities, as winter storms snowed out access routes.
The company has also been struggling with a sharp cut in benefits under the Supplemental Nutrition Assistance Program, the largest U.S. anti-hunger program. At least one in five of Wal-Mart's customers relies on food stamps.
"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," Chief Executive Doug McMillon said in a statement.
The company said its second-quarter forecast reflected increased investments in its membership only Sam's Club stores and higher costs related to the cuts in the food stamp program.
Wal-Mart, which gets more than half of its sales from groceries, said sales at U.S. stores open for at least a year were relatively flat in the first quarter. Continued...