Wal-Mart cuts forecast as it spends more on healthcare, online
As expected, the world's largest retailer also reported flat U.S. same-store sales, excluding fuel, for the second quarter - the sixth quarter of declining or no growth.
Wal-Mart, whose shares were down slightly at $73.90 in early trading, blamed intense competition and weak consumer spending for sluggish U.S. same-store sales.
" ... Consumers are still concerned about cost of living and employment," Chief Financial Officer Charles Holley said on a conference call on Thursday.
U.S. retail sales in July were the weakest since January, data showed on Wednesday.
Wal-Mart is investing heavily in its e-commerce business to improve sales, trying to play catch-up in a market dominated by Amazon.com Inc.
Wal-Mart named a new head for its online business in June, as part of plans to integrate the business with its network of brick-and-mortar stores.
Online sales grew 30 percent to more than $10 billion last year, but accounted for just a fraction of Wal-Mart's net sales of $473 billion.
Wal-Mart said it expected online sales to grow 25 percent in the year ending January.
Department store operator Kohl's Corp said on Thursday its quarterly same-store sales fell 1.3 percent, while Macy's Inc cut its full-year same-store sales forecast on Wednesday.
J.C. Penney Co Inc is scheduled to report results on Thursday after markets close.
HEALTHCARE COSTS SOAR
Wal-Mart said it expected to spend $500 million on U.S. healthcare this year, up from $330 million estimated in February, as enrollments and medical costs rise.
Of its nearly 2.2 million employees, about 1.4 million are in the United States.
Revenue rose by a better-than-expected 2.8 percent in the second quarter ended July 31 as sales increased at small-format stores.
"We're encouraged by the performance of our small-format stores and e-commerce, areas where we're investing significantly this year," Chief Executive Doug McMillon said in a statement.
Wal-Mart cut its full-year forecast for earnings from continuing operations to $4.90-$5.15 per share from $5.10-$5.45. This includes a 5-7 cents per share impact from spending on its online business.
Net income attributable to Wal-Mart rose to $4.09 billion, or $1.26 per share, from $4.07 billion, or $1.24 per share, a year earlier.
Earnings from continuing operations attributable to Wal-Mart were $1.21 per share, matching the average analyst estimate, according to Thomson Reuters I/B/E/S.
Total revenue rose to $120.13 billion from $116.83 billion.