Walmart just gave Wall Street a dose of the back-to-school blues.
The world’s biggest retailer yesterday slashed its full-year outlook as quarterly sales and profits missed analysts’ forecasts, stoking fresh fears that the crucial fall and holiday shopping seasons are off to a slow start.
The Arkansas-based discounter’s stock tumbled 2.6 percent, taking most of the retail sector with it as the company reported lackluster spending among its cash-strapped customers, blaming higher taxes and gasoline prices.
Walmart’s report helped drag down blue chip stocks in the Dow Jones industrial average, which saw their worst day in eight weeks, tumbling 225.47 points, to close at 15,112.19.
Fresh positive government data on jobs renewed fears that the Fed may pull back its support for financial markets as soon as next month.
Walmart’s second-quarter results, however, presented little upbeat evidence about the US jobs market. Indeed, analysts said stubbornly high unemployment among its clientele continues to slam spending.
“While the jobs market has improved, wage gains have been marginal at best, and many of the new jobs have either been part-time or in low-paying service sectors,” noted Ken Perkins of Retail Metrics, an industry consulting firm.
Labor groups yesterday took the opportunity to blast Walmart for stagnant wages, reduced hours and lost benefits that have been afflicting lower-income shoppers nationwide.
“The company is left facing a core customer challenged by many of the economic forces Walmart itself has unleashed on low-income worker/consumers,” said John Marshall, a senior analyst for the United Food and Commercial Workers capital stewardship program.
Walmart wasn’t the only retailer with dismal news this week. Nordstrom’s second-quarter sales yesterday missed Wall Street’s forecasts, reinforcing fears that well-heeled shoppers are also reining in spending.
Suit retailer Jos. A. Bank warned that its second-quarter profit will be down on an 11-percent sales drop.
Investors got jittery a day earlier when Macy’s disclosed disappointing second-quarter results and lowered its full-year forecast, sending shares down by more than 4 percent.
The news from Macy’s and other retailers this week hasn’t been all bad, however.
Macy’s execs noted that business has improved this month as the back-to-school season ramps up, with parents responding to sales events for fall clothing for kids and teenagers.
Likewise, Kohl’s yesterday signaled a recent pickup in business after a weak second quarter, helping boost the company’s shares more than 5 percent.
Middle-market rival JCPenney reports quarterly results next week.
Earlier this week, sources told The Post that Penney’s sales at stores open at least a year — or same-store sales, a key retail metric — swung into positive territory this month.
While Penney’s momentum isn’t yet proven, sources say the recent trends are up noticeably from the second quarter.