Wal-Mart January Sales Weaker Than Expected

NEW YORK (Reuters) – Wal-Mart Stores Inc on Thursday reported a lower-than-expected 0.5 percent rise in itsJanuary sales at U.S. stores open at least a year, excluding fuelssales, citing unfavorable weather and gift card redemptions that werebelow expectations.

Including fuel sales, January same-store sales rose 0.9 percent.

The world’s largest retailer, which stood by its fourth-quarterearnings forecast, said that for February it expects U.S. same-storesales 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 saleswould rise roughly 2 percent, while analysts, on average, wereexpecting a 2 percent gain, according to Reuters Estimates.

But it said on Thursday that final January same-store sales missedexpectations as customers did not redeem their gift cards as quickly asforecast.

Retailers can only book revenue after gift cards are used, and theyoften count on customers coming back into their stores quickly afterthe holiday season to use those cards.

Wal-Mart said "customers appear to be holding gift cards longer andusing them more often for food and consumables rather thandiscretionary 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-quarterearnings per share from continuing operations of 99 cents to $1.03 pershare. Its fourth quarter ended January 31.

(Reporting by Nicole Maestri; Editing by Derek Caney and Gerald E. McCormick)

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