Wal-Mart lowers outlook for the year

BENTONVILLE, Ark. Wal-Mart lowered its profit outlook for the year following disappointing second quarter financial results that were hurt by ongoing difficulties at its U.S. stores division.

After posting second earnings per share that were essentially flat with prior year results, when factoring in the effect of several one time benefits, the company reduced its full year earnings per share guidance to a range of $3.05 to $3.13 after previously indicating it expected to report earnings per share of $3.15 to $3.23.

“The company’s current earnings guidance reflects the need to continue to improve our underlying operating performance,” said cfo Tom Schoewe.

Total company sales increased 8.8% to nearly $92 billion, but net income from continuing operations grew at a more modest 4% to $3.1 billion. U.S. operations continue to pressure total company results as sales grew 6.5% to $59 billion while operating profits increased 3.8% to $4.3 billion.

The international division, once a bright spot for the company, also showed signs of weakness as sales increased 15.7% to $21.6 billion, but operating profits grew 5.1% to slightly more than $1 billion.

“For the remainder of this year, our management team is focused on inventory improvements, delivering quality products at low prices and store execution at the highest standards,” said Wal-Mart president and ceo Lee Scott.

While overall company results were disappointing, one bright spot was the Sam’s Club division where profits grew faster than sales. Sales increased 8.6% to $11.4 billion, but operating profits increased 11.2% to $447 million and same-store sales increased 5.9% excluding fuel sales.