Walmart announced disappointing first quarter results on Thursday, with profits plummeting and US sales little changed. The retailer joined a growing list of businesses that attributed poor quarterly results to bad weather.
“Like other retailers in the United States, the unseasonably cold and disruptive weather negatively impacted U.S. sales and drove operating expenses higher than expected,” Walmart’s boss C. Douglas McMillon is quoted by the New York Times as saying.
Walmart’s first quarter sales added only 0.8% and profit for the first three months of 2014 dropped 5% from the same period the previous year. The retailer’s earnings were $3.6 billion or $1.10 per share, a drop from $3.8 billion or $1.14 per share a year earlier.
Walmart’s key customers tend to have low-income backgrounds, representing a segment of the market that has endured tough times throughout the volatile and slow economic recovery.
The retailer said that the results were affected by effective tax rate and currency tax rates that were higher than projected. Walmart said its earnings were hurt by bad weather by about 3 cents per share.
During the quarter, the number of customers who visited Walmart stores in the United States dropped 1.4%, a situation the retailer has seen in a number of recent 3-month periods. Sales at Walmart’s Neighborhood Market stores that were open for at least 12 months increased 5%, however. The firm said its US sales increased in the later periods of the quarter as weather improved.
As Reuters reports, the retailer also suffered when drastic reductions in benefits under the Supplemental Nutritional Assistance Program were implemented. At least 20% of Walmart’s customers take food stamps.
The company’s stock was down 3.2% at $76.20 before the bell. The shares have dropped 1.4% in the last 12 months. That compares with an 8.8% jump in the Dow Jones Industrials index and 6.4% gain in the Dow Jones global retailers gauge.
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To contact the reporter of this story; Yashu Gola at email@example.com