BENTONVILLE, Ark. (AP) — Wal-Mart said Friday that key
earnings figures may come in at the low end or below its prior forecasts
for its fourth quarter and full fiscal year. It also said a
widely-watched sales metric for the fourth quarter which includes the
holiday season will be lower than its previous forecast.
The news initially sent Wal-Mart shares lower but they were up by early afternoon.
The
world’s biggest retailer said the lower earnings outlook reflect
accounting for some Brazil-related charges and other items. Chief
Financial Officer Charles Holley said in a statement that these items
were not anticipated when Wal-Mart previously provided its forecasts.
The
lowered outlook for sales at stores open at least a year was due in
part to eight winter storms that resulted in some store closings, Holley
said. He added that its Sam’s Club locations were hurt by weather
throughout the quarter.
The sales performance was also hindered by
a bigger-than-expected impact from the federal government’s reduction
in Supplemental Nutrition Assistance Program benefits that went into
effect on Nov. 1, Holley said.
Wal-Mart didn’t provide specific numbers to go with its revised forecasts.
The
retailer only said that its fiscal fourth-quarter and full-year
adjusted earnings from continuing operations may come in at or slightly
below the low end of its prior forecasts. It previously projected
fourth-quarter adjusted earnings from continuing operations between
$1.60 and $1.70 per share. Its 2014 guidance was for $5.11 to $5.21 per
share.
Analysts surveyed by FactSet predict fourth-quarter earnings of $1.65 per share and full-year earnings of
$5.16 per share.
It
also said sales — excluding fuel — at Walmart and Sam’s Club locations
in the U.S. open at least a year would be slightly below its prior
forecasts. The chain previously expected the key sales figure would be
relatively flat at its namesake locations in the U.S. and that it would
be between flat and 2 percent at Sam’s Club. Sales at stores open at
least a year is a closely-watched indicator of a retailer’s health.
Shares
of Wal-Mart Stores Inc. had fallen as low as $73.64 in morning trading
on the news but were up 22 cents to $74.97 in afternoon trading Friday.
The
revisions came less than a week after Wal-Mart announced that it was
eliminating 2,300 workers at its Sam’s Club division. The layoffs, which
cut 2 percent of the membership club’s U.S. employee count of about
116,000, mark the largest since 2010 when the Sam’s Club unit laid off
10,000 workers as it moved to outsource food demonstrations at its
stores.
Wal-Mart, which has 11,096 stores, said that it will
provide detailed fourth-quarter and full-year financial results as well
as guidance for fiscal 2015 on Feb. 20.
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