NEW YORK (AP) — The first few months of the year were tough for Wal-Mart Stores Inc.
The world's largest retailer reported today that its first-quarter profit edged up just slightly, and the company struggled with a sales slump in its namesake business during the three-month period. The discounter also offered a quarterly profit outlook that came below Wall Street's projections. Its stock fell on the news.
Wal-Mart blamed a litany of factors affecting its budget-conscious customers, including a payroll tax increase, delayed tax refunds, job worries and bad weather. It is the latest in a string of big-name, consumer companies from McDonald's to Macy's, to cite such hurdles in the first quarter of the year.
"Frankly, we had a more difficult quarter than expected," said Wal-Mart's President and CEO Mike Duke in a pre-recorded call.
Wal-Mart is considered an economic bellwether because the retailer accounts for nearly 10 percent of nonautomotive retail spending in the U.S. The latest results indicate that many American households with lower incomes continue to struggle even as the job and housing markets improve.
"This is a reality check for Wal-Mart's low-income shoppers," said Brian Sozzi, CEO and chief equities strategist at Belus Capital Advisers. "The low-income shopper is even more financially stressed than people realize."