Wal-Mart Stores Inc (NYSE:WMT) reported lower-than-expected quarterly U.S. same-store sales growth, saying its customers were using their tax refunds and savings at the pump to pay down debt rather than spend on discretionary items.
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Shares of the world's largest retailer were down 2.2 percent at $78.15 in premarket trading on Tuesday.
Wal-Mart forecast second-quarter earnings of $1.06-$1.18 per share, largely below the average analyst estimate of $1.17.
"Based on recent surveys, we know that many of our U.S. customers are using their tax refunds and the extra money from lower gas prices to pay down debt or put it into saving," CEO Doug McMillon said in a statement.
The company said the forecast included an impact of 4 cents per share from paying higher wages and on training for U.S. employees and 4 cents from a strong dollar.
Wal-Mart said in February it would invest $1 billion to increase wages and provide training to U.S. store employees.
The company reported a 1.1 percent rise in same-store sales in the United States in the first quarter ended April 30, missing the consensus of an increase of 1.5 percent, according to analysts polled by research firm Consensus Metrix.
Net profit attributable to Wal-Mart fell to $3.34 billion, or $1.03 per share, in the first quarter, from $3.59 billion, or $1.11 per share, a year earlier.
Total revenue fell slightly to $114.83 billion from $114.96 billion.
The strong dollar had a greater-than-anticipated impact on first-quarter results, the company said. Currency fluctuations hurt net sales by about $3.3 billion and earnings per share by 3 cents.
Analysts on average had expected a profit of $1.04 per share on revenue of $116.21 billion, according to Thomson Reuters I/B/E/S.
(Reporting by Nathan Layne in Chicago and Sruthi Ramakrishnan in Bengaluru; Editing by Simon Jennings)