Wal-Mart Stores Inc., the earth’s largest retailer, lowered its annual sales forecast following the strong dollar pulled on the value of overseas revenue.
The company now expects net sales growth to become flat this year, in contrast to a previous forecast for growth as high as 4 percent, according to an argument Thursday.
The outlook signal that Wal-Mart still faces hurdles in bouncing back from the 3 years of slumping growth. Its U.S. same-store sales increase also was slow last quarter, rising just 0.6 per cent.
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That fell short of the 1 per cent analysts had predicted.
Excluding some items, earnings were US$1.49 a be part of the fourth quarter, the Bentonville, Arkansas-based company said. Analysts had predicted US$1.46 typically, based on data compiled by Bloomberg. Fourth-quarter revenue fell 1.5 percent to US$129.7 billion, also hurt by currency effects. Analysts had predicted US$130.6 billion.
In Canada, Wal-Mart reported a 5.8 percent rise in net sales, and a 4.3 percent rise in sales at stores open for over a year, which strips the affects of added sq footage. Store traffic increased two percent.
The currency headwinds could hamper a rally for Wal-Mart after a dismal 2015. The stock fell 29 per cent this past year but indicates signs of rebounding in 2016, gaining 7.8 per cent despite a tumbling market. Investors see the discount retailer like a safe place if the U.S. economy enters a recession.
It may also gain from rising wages, particularly among lower-income consumers, and persistently low gas prices.
Wal-Mart’s profit has been hurt by slowing U.S. sales, as well as increasing paying for employee pay and its online operations. Wal-Mart will pay US$1.5 billion in higher wages in the fiscal year ending January 2017 as it raises its minimum wage to US$10 an hour and provides a one-time raise to a lot more than 1 million employees this month. Those added wages will bring about profit falling between 6 per cent and 12 percent this season, the organization has stated.
Wal-Mart said last month that it’ll close 269 stores worldwide, including all its small-format express stores.
Wal-Mart continues to be centered on fixing up its 4,600 U.S. stores after years of customer complaints about out-of-stock items, poor customer support and long waits in the checkout line. The organization has raised pay in an effort to attract and retain better workers, implemented a brand new system to stock its shelves, and increased staff at the register.
So far, the organization says the efforts are working. Last February, only 16 per cent of their U.S. locations met the company’s new standards for cleanliness and customer support. Time had reached more than 70 per cent by November.
Bloomberg News, with a file from Hollie Shaw
