Wal-Mart reports fall in quarterly profits

Walmart store Wal-Mart said it would invest "aggressively" in e-commerce

Related Stories

The world's largest retailer, Wal-Mart, has reported a 22% drop in quarterly profit and given a weaker-than-expected earnings forecast for the coming year.

Net income for the three months to 31 January fell to $4.4bn (£2.6bn) from $5.6bn a year earlier.

Wal-Mart said tough winter weather, cuts to government benefits and higher taxes contributed to the fall.

Wal-Mart's UK supermarket business, Asda, said like-for-like sales fell 0.1% in the final quarter of 2013.

Investment

Start Quote

There's little doubt that the UK retail market is undergoing significant and permanent structural change”

End Quote Andy Clarke Asda chief executive

Wal-Mart said reduced food-stamp benefits had been partly behind its lower profits, along with competition from heavy discounting during the holiday season.

Comparable sales at its US stores fell by 0.4% in the three-month period. Wal-Mart's total revenue for the quarter rose by 1.4% to $129.7bn.

Wal-Mart said it expected net sales this year would grow at the lower end of its earlier forecast of 3%-5%.

Its earnings forecasts for this year also fell short of analysts' forecasts. Wal-Mart expects profits to be between $5.10 and $5.45 per share, against expectations of about $5.54.

Chief executive Doug McMillon said he would "innovate to improve productivity" to keep prices low.

He added: "We will invest aggressively in e-commerce and increase our small store rollout in the US, as we have done in several other countries, to deliver value and convenience."

The retailer would keep focusing on providing "supercentres" and smaller stores closer to customers' homes, he said.

'Tough year'

In the UK, while Asda's underlying sales fell 0.1% in the final quarter of the year, the supermarket said they were up 0.5% over 2013 as a whole.

The UK's major supermarket chains struggled to boost sales over the Christmas period, coming under fierce competition from discount retailers such as Aldi and Lidl, and from more upmarket offerings from Waitrose and Marks & Spencer.

Asda's chief executive, Andy Clarke, said that 2013 had been a "tough year".

"There's little doubt that the UK retail market is undergoing significant and permanent structural change," he added.

"Though the economy is showing signs of recovery, it is still susceptible to shocks and the benefit is not yet being felt right across the country."

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

Features

From BBC Capital

Programmes

  • Hitch-hiking robot HitchBOTClick Watch

    Hitch-hiking robot HitchBOT completes a 6,000 km (3,700 mile) trip plus other tech news

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.