Wal-Mart Posts Downbeat Q2 Earnings, Lowers Full-Year Forecast

Shares of Wal-Mart Stores, Inc. WMT dropped around 3 percent in pre-market trading after the company reported weaker-than-expected earnings for the second quarter and lowered its full-year forecast. The Bentonville, Arkansas-based company posted a quarterly profit of $3.48 billion, or $1.08 per share, versus a year-ago profit of $4.09 billion, or $1.26 per share. Its revenue rose slightly to $120.2 billion from $120.1 billion. However, analysts were expecting earnings of $1.12 per share on revenue of $119.7 billion. The average estimate among 50 Estimize users was for earnings of $1.15 per share and revenue of $120.32 billion. Same-store sales at Walmart U.S. rose 1.5 percent, while Neighborhood Market same-store sales rose around 7.3 percent. Sam's Club same-store sales climbed 1.3 percent. E-commerce sales globally climbed around 16 percent on a constant currency basis during the quarter, while gross merchandise value jumped 18 percent on a constant currency basis. Walmart paid $1.6 billion in dividends and repurchased around 14 million shares for $1.0 billion. "We're pleased that the investments we've made are helping to improve our business. Even if it's not as fast as we would like, the fundamentals of serving our customers are consistently improving, and it's reflected in our comps and revenue growth. In this case, our desired changes require investments, which are pressuring earnings this year. We're confident that our strategic plan will create robust sustainable growth for shareholder returns over time," said Doug McMillon, President and CEO, Wal-Mart Stores, Inc. Walmart now expects full year earnings of $4.40 to $4.70 per share, versus a prior forecast of $4.70 to $5.05 per share. The company now projects Q3 earnings of $0.93 to $1.05 per share, versus analysts' estimates of $1.08 per share. Walmart shares fell 3.05 percent to $69.70 in pre-market trading.