Wal-Mart is running out of excuses

It keeps blaming disappointing results on things like delayed tax refunds, even though its rivals are doing better despite the same headwinds.

By Jonathan Berr May 16, 2013 10:35AM
Empty shelves in a New Jersey Wal-Mart (© Najlah Feanny/Corbis)Shares of Wal-Mart (WMT) slumped in early trading Thursday after the world's largest retailer posted earnings that lagged analysts' estimates and issued guidance that fell short of consensus forecasts -- yet again -- because of what CEO Mike Duke described as "considerable headwinds." Its rivals, though, seem to be doing better.

Among Wal-Mart's lackluster data points, first-quarter net income rose 1.1% to $3.78 billion, or $1.14 per share, versus $3.74 billion, or $1.10 per share, a year earlier. Sales increased 1% to $113.4 billion. Analysts surveyed by Bloomberg expected profit of $1.14 per share on revenue of $116.1 billion. U.S. comparable-store sales, a key retail metric measuring revenue at stores open at least a year, fell 1.4%.

The company forecast a profit in the current quarter of $1.22 to $1.27 per share, below the $1.29 analysts had expected.

As it has done before, Wal-Mart attributed its mediocre performance to a delay in the Internal Revenue Service issuing income tax refunds, an increase in the payroll tax and less grocery inflation. However, Wal-Mart's competitors are facing these same problems and are faring better. That's only heightening the pressure on Duke to improve the company's financial performance.

Kohl's (KSS), for one, reported better-than-expected earnings, and its stock is moving in the opposite direction of Wal-Mart's. It expects comparable-store sales to increase as much as 2% in the current quarter after a 1.9% decline in the last quarter. TJX (TJX), the parent company of TJ Maxx, saw its same-store sales rise 8% in the four-week period ending May 4. But it expects its growth rate to slow in the current quarter to a range of 1% to 2%, which disappointed Wall Street.

Wal-Mart does see better times ahead. It says U.S. same-store sales will jump as much as 2% in the current quarter. If the discount retail colossus can't meet those modest expectations, Wall Street will not be pleased.

Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.
 
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714Comments
May 16, 2013 2:33PM
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Will not shop at Wal-Mart any longer.

 

To me we need to stop shopping at these large chain places and bring back the mom and pops stores this is the only way to bring America back.

 

Large chains kill the economy and we need to boycott them all.

 

Lets bring back the mom and pops stores.

 

Who is with me..

May 16, 2013 2:18PM
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WALMART SUCKS--I AVOID THEM LIKE THE PLAGUE.  RATHER PAY MORE AND GO ELSEWHERE.
May 16, 2013 2:32PM
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Just got back from Walmart, they still do not have a few items that I have been needing for  several weeks. They just lost out, because I am going to the competition, may cost me a bit more, but I am tired of waiting. Add to that, they have horrible customer service, and considering the way they treat their employees, I feel better shopping elsewhere. 
In short, I feel no sympathy for the Walton family, they have betrayed Sam Walton's legacy for more  money, they are evil.
May 16, 2013 2:39PM
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One word... "Walmartians".  The reasons my family will never shop there again are as follows (if Walmart cares to know) 

1. You cram the isles with **** I can find myself on the shelf.  I have never made an impulse buy after crashing into an island of merchandise place strategically in my way so I can't get through. 

2. The employees always look like they are on the verge of suicide. (& seem aggravated I am now checking out and they have to ring up the items). 

3. They have zero dress code for shopping at their store!  The general public that is allowed to enter and shop while not dressed appropriate for even a backyard swim-barbeque.  I don't need to be attempting to explain to my toddler why the 600lb woman, with her boobs literally hanging and swinging out and about, is riding in a store provided powered wheelchair with 4 or more kids riding on the back (screaming, shoeless, unkept and seemingly always in this condition).  I can't say what I want to say ....

May 16, 2013 2:30PM
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The only excuse for Wal-Marts stock flop is that people are revolting against the machine. People want companies that treat employees like humans, not slaves. Walmart is notorious for abuse on their workforce. I will not spend my money supporting that sort of behavior. 
May 16, 2013 12:19PM
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Wal-mart is in every market it can get into.  After you saturate the market in an industry like this there is no way to increase profits further except more people.  Wal-Mart has the worst service ever since they keep trying to cut jobs to cut costs to increase the bottom line.  Once they completely gut the company and no one shops there they might realize the error of their ways. "Might"
May 16, 2013 11:43AM
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They need to stock shelves and provide more cashiers.  Basically focus on the fundamentals of serving customers and stocking the friggin shelves.  I remember seeing some idiot VP of something on TV who said that he personally crusaded for Walmart to stop storing overstock in "overhead storage" above the actual sales racks.  That may be why they are so out of stock on everything.  All the emphasis on "just in time" inventory and all that MBA B.S... 
May 16, 2013 2:08PM
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i hate walmart,nobody knows where anything is,if you ask they tell you its not my department or im my lunch break,happens here all the time,i rather pay more and go somewhere else

 

May 16, 2013 2:34PM
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spoiled food, narrow ailses, empty shelves, over-worked, underpaid employees...

 

May 16, 2013 2:42PM
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Walmart sucks! You couldn't pay me to shop there! They don't treat their employees well and they set the trend of buying cheap goods from foreign countries.  The Walmart's of the world put americans out of work with their cheap merchandise. You have a choice people DON'T SHOP AT WALMART!

May 16, 2013 2:08PM
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I'm not sure what walmart is thinking but you can't have sales if you don't have product on the shelves or have what the consumer wants.  I have been to different walmart stores and they all have bare shelves and it doesn't matter what time of day or night it is,  they have become less friendly toward consumers, barely have any registers open, if you're lucky they may have 1 or 2 which has several customers waiting in line to make their purchases.   I must add that on the late night shift they have no cashiers at the walmart in my area, it is all self serve registers and if you have a problem with an item you can't find anyone other than a person stocking shelves who doesn't know what to do.  
I am frustrated with walmart, other than the pharmacy I don't shop there anymore. 
May 16, 2013 2:38PM
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I rarely go to Wal- Mart which has become my last resort store....poor quality, poor service, not enough cashiers, cluttered isles, messy shelves. I rather pay a bit more and have non of the above to deal with.
May 16, 2013 1:44PM
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The real problem is those Third World suppliers. The damned slave labor wage and working condition costs are beginning to rise, and those aren't circumstances that will keep a Wal-Mart open.

 

I can hear the head of Wal-Mart, all frustrated and mystified, bellowing at the next board meeting, "What part of slave labor don't those people understand!?"

May 16, 2013 1:02PM
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& all the Wal Mart heirs are Billionaires.. So if it goes up or down  Does anyone give a damn?
May 16, 2013 2:33PM
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When Walmart can provide a freakin' cart that rolls straight, I might consider shopping there again. 
May 16, 2013 2:35PM
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Maybe Wal-Mart's execs need to shop there on e time and wait in line for 15 minutes, then get to the non-personable, lazy checker. 
May 16, 2013 2:39PM
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The biggest Chinese,or Bangladesh, company take your pick Walmart needs and uses all they can get. Made in America by Sam Walton is now the biggest joke of all. Walmart needs all the overseas help it can hire for $1.35 an hr. Sleeping in giant factories,with doors locked and God knows what else just for a few bucks saved on cheap clothing. Wow what a kool way of life. They will be gone before my life is over, that's for sure.
May 16, 2013 2:34PM
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I have stopped shopping walmart, the quality of the food is horrible and rotted at our store and the bread is always green.  They don't have anybody going through the outdated food and some day they are going to poison somebody.  Personally i would like to see them go out of business altogether, they have made millions by slave work in foreign countries from the clothing and they are just another business out for the buck
May 16, 2013 2:43PM
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I have the hardest time going to WalMart- no cashiers, customer service area cannot help you find anything- and every time I go in for a product it has been moved.....  I go to Target and grocery stores - now!  My time is too precious to shop at WalMart for over an hour looking for products.

 

 

May 16, 2013 2:24PM
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You openly admit that your lag in profits is due to delayed tax returns. Which equates to you catering to the lower class that expect and NEED their income return to survive. To them customer is not even an option. They just look for low quality and cheap. So keep exercising that excuse for what you call CUSOMER SERVICE and your worth will continue to drop.
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