Wal-Mart Stores Inc. forecast full-year earnings that could fall short of Wall Street expectations as growth in international markets slows, even as its U.S. discount stores saw improved sales in a tepid U.S. economy.
The world's largest retailer, viewed as a barometer of economic activity, continues to see signs customers are strapped — spending more at the beginning of the month, when they get their paychecks.
"The paycheck cycle remains pronounced, and there continues to be a lot of uncertainty in the global economy," Chief Financial Officer Charles Holley said in a recorded message on Thursday.
Wal-Mart shares fell 3.3 percent to $72 in premarket trading.
Sales at U.S. stores open at least a year, or same-store sales, rose 2.2 percent in the second quarter. The discount retailer has notched four consecutive quarters of same-store sales growth at Wal-Mart U.S., by far its largest unit.
Same-store sales, a key measure, came in just ahead of analysts' expectations of a 2.1 percent increase, according to Thomson Reuters I/B/E/S. The rise was within the company's forecast.
Same-store sales rose at its international division and Sam's Club warehouse chain.
The company forecast a 1 percent to 3 percent rise in U.S. same-store sales in the third quarter, compared with a 1.3 percent increase a year ago.
But Chief Executive Mike Duke said international growth has slowed and that the company is cutting back spending on new stores in some emerging markets to focus on increasing sales at existing stores. The company is facing government probes into allegations of bribery at its Mexican unit.
Wal-Mart earned $1.18 per share in the quarter, up from $1.09 per share a year earlier. Analysts, on average, expected $1.17 per share, according to Thomson Reuters I/B/E/S.
Consolidated net sales rose 4.5 percent to $113.53 billion.
Wal-Mart raised and narrowed its full-year earnings per share forecast. It now expects to earn $4.83 to $4.93 a share, versus a prior target of $4.72 to $4.92.
Analysts' average target is $4.93.
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