Business

Walmart cuts profit forecast after US store traffic slips

Walmart has reported flat sales and a decline in traffic as the world’s biggest retailer and remains mired in a slump.

Walmart also said it does not see sales turning around anytime soon.

The retailer said it now expects earnings for the year of $4.90 to $5.15, down from its previous range of $5.10 to $5.45, pointing to higher-than-expected US health-care costs and incremental investments in its e-commerce business.

The results turned off investors and Wall Street analysts alike. Under chief executive Doug McMillon, who took over the job in February, Walmart has pushed e-commerce and smaller stores in a bid to support the bottom line as U.S. sales have languished.

“We see opportunities to improve in merchandising, pricing and store level service in our supercenters, and we are working to close those gaps,” McMillon said in Thursday’s report.

U.S. store traffic slipped 1.1 percent, its seventh consecutive quarterly decline. Sales at U.S. Walmart stores, excluding recently opened and closed stores, were flat, in line with company expectations. Same-store sales had fallen five straight quarters.

Walmart said it expects to post $1.10 to $1.20 a share in adjusted earnings for the current period, to go along with “relatively flat” same-store sales. Analysts polled by Thomson Reuters had been projecting $1.18 a share in profit.

For the period ended July 31, Walmart posted a profit of $4.09 billion, or $1.26 a share, up from $4.07 billion, or $1.24 a share, a year earlier. Per-share earnings from continuing operations were $1.21.