Wal-Mart Stores (WMT) lowered its fourth-quarter outlook on Friday, as severe winter weather and government cutbacks to food stamps created headwinds during the holiday period.
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The world’s largest retailer cautioned that its profit will match or fall “slightly below” the low end of its previous guidance for $1.60 to $1.70 a share. Walmart gave the same prediction for full-year earnings, which were expected to hit $5.11 to $5.21 a share.
Bentonville, Ark.-based Walmart also said same-store sales at Walmart U.S. and Sam’s Club, excluding fuel, to be slightly negative compared to the company’s prior outlook. In November, Walmart projected comparable sales to be relatively flat at its namesake U.S. stores, while Sam’s Club expected results to be between flat and 2% growth.
Chief financial officer Charles Holley said Walmart saw a greater-than-expected negative impact from reductions in the Supplemental Nutrition Assistance Program, or food stamps. The cuts went into effect on Nov. 1.
Holley added that eight winter storms resulted in store closures and impacted traffic throughout the fourth quarter.
Shares fell 55 cents to $74.20 in pre-market trading. Walmart has struggled to keep up with the broader market over the last six months, slipping 4% over that period.