Walmart warns: Food stamp cuts hurt our profits
Walmart Friday said bad weather and cuts in food stamp support for the poor weighed on US sales and would hit earnings for its November-January fourth quarter.
Wal-Mart Stores Inc., the world’s largest retailer and the country’s largest single private sector employer, said it now expects sales at its namesake US stores and its Sam’s Club chain to be “slightly negative” for the quarter, which included the crucial holiday shopping period.
Previously the company forecast “relatively flat” sales at Walmarts and 0-2 percent growth at Sam’s Clubs.
Walmart reports fourth-quarter earnings on February 20. The company had previously forecast underlying earnings of $1.60-$1.70 per share.
“Despite a holiday season that delivered positive comps, two factors contributed to lower comp sales performance,” said Walmart chief financial officer Charles Holley — referring to sales at comparable stores.
Holley cited deeper-than-expected cuts to benefits under the US Supplemental Nutrition Assistance Program — food support for the poor — and heavy weather in some areas that had forced some temporary store closings and kept consumers away.
Walmart also announced an additional 16 cents per share in costs related to one-time issues including Brazilian tax reviews and costs for Sam’s Club staff restructuring and store closures.
Dow component Walmart was down 1.0 percent to $74.01 in opening trade Friday.