Wal-Mart January Sales Weaker Than ExpectedBy Reuters - | Posted 2008-02-07 Email Print
Wal-Mart reported a lower-than-expected 0.5 percent rise in its
January sales at U.S. stores open at least a year, excluding fuels
sales, citing unfavorable weather and gift card redemptions that were
NEW YORK (Reuters) - Wal-Mart Stores Inc on Thursday reported a lower-than-expected 0.5 percent rise in its January sales at U.S. stores open at least a year, excluding fuels sales, citing unfavorable weather and gift card redemptions that were below expectations.
Including fuel sales, January same-store sales rose 0.9 percent.
The world's largest retailer, which stood by its fourth-quarter earnings forecast, said that for February it expects U.S. same-store sales to be between flat and up 2 percent.
Shares fell 3.2 percent to $47.25 before the opening bell.
Last month, Wal-Mart said it expected January U.S. same-store sales would rise roughly 2 percent, while analysts, on average, were expecting a 2 percent gain, according to Reuters Estimates.
But it said on Thursday that final January same-store sales missed expectations as customers did not redeem their gift cards as quickly as forecast.
Retailers can only book revenue after gift cards are used, and they often count on customers coming back into their stores quickly after the holiday season to use those cards.
Wal-Mart said "customers appear to be holding gift cards longer and using them more often for food and consumables rather than discretionary purchases."
It also said that sales were hurt by "unfavorable weather," especially in the Midwest
The world's biggest retailer said net sales in the month ended February 1 rose almost 8 percent to $27.28 billion.
Wal-Mart said it continues to expect to report fourth-quarter earnings per share from continuing operations of 99 cents to $1.03 per share. Its fourth quarter ended January 31.
(Reporting by Nicole Maestri; Editing by Derek Caney and Gerald E. McCormick)
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