Wal-Mart outlook hit by store closings, food stamp cuts

[hvactec]

(Reuters) - Wal-Mart Stores Inc (WMT.N) cut its quarterly profit outlook because of a host of issues, including reduced food stamp benefits for millions of Americans, the restructuring of Sam's Club unit in the United States and the closure of stores in Brazil and China.

The announcement comes the day before Doug McMillon, who had been chief executive officer of the Walmart International unit, becomes president and CEO of the Bentonville, Arkansas-based company.

After decades of robust growth, Wal-Mart now faces fierce competition in the United States from dollar stores, Amazon.com Inc (AMZN.O) and other retailers as well as challenges abroad as it adjusts its big-box model.

"We have had some reorganization within the global finance organization," spokesman Randy Hargrove said in an email, "and as the new leaders reviewed the processes and procedures, we have uncovered some issues that we are addressing today."

The world's largest retailer expects to provide more details when it reports quarterly results on February 20.

Wal-Mart said Friday that it expected to report earnings for the fourth quarter ending on January 31 at or slightly below the low end of its previous forecast of $1.60 to $1.70 a share.

"Wal-Mart caters to lower-income consumers which have been hit disproportionately hard," said Morningstar analyst Ken Perkins.

About 20 percent of the company's shoppers are food stamp users, according to Cowen analyst Tal Lev. Wal-Mart did not respond to calls for details on the number of shoppers who use food stamps at its stores.

About one in seven Americans, or 48 million, took a hit in 2013 when the federal government food stamps program was cut by more than $5 billion. Additional cuts are expected this year.

Wal-Mart is also facing serious competition from dollar stores and other small-format chains, Perkins added.

The retailer now expects to report a decline in fourth-quarter sales at stores open at least a year for Walmart U.S. and Sam's Club. It had previously expected same-store sales to be relatively unchanged at Walmart U.S. and flat to up 2 percent, without fuel, at Sam`s Club.

For the fiscal year, the company said it expected earnings at or slightly below the low end of its prior outlook of $5.11 to $5.21 a share.

read more Wal-Mart outlook hit by store closings, food stamp cuts | Reuters

 

[Iceweasel]

I missed the portion that says their projected outlook is less due to food stamp reductions. Does the author think that without food assistance people will shop at more expensive stores? I don't get it.

 

[Mr. H.]

Ever notice how all Wal Mart's smell the same?

 

[HenryBHough]

Ever notice how the aftermath of a house fire smells exactly like the smell of a burning dump?

Could it be that, in both cases, it's because the stuff being consumed is the same?

Like the stuff stocked in one Walmart is pretty much the same as that stocked in another of similar size?

 

[SwimExpert]

I missed the portion that says their projected outlook is less due to food stamp reductions. Does the author think that without food assistance people will shop at more expensive stores? I don't get it.

Recipients will have less disposable cash available for other goods. Those who use food stamps at Wal-Mart stores that sell groceries may compensate by also reducing their food expenditures by selecting cheaper foods, causing less overall revenue for the company.

 

[Agit8r]

I missed the portion that says their projected outlook is less due to food stamp reductions. Does the author think that without food assistance people will shop at more expensive stores? I don't get it.

No, they will just buy less food...

Poor people already shop at Walmart. If you go inside one, you'll see them.

 

[Iceweasel]

No, they will just buy less food...

Poor people already shop at Walmart. If you go inside one, you'll see them.

My challenge was "I missed the portion that says their projected outlook is less due to food stamp reductions."

 

[OnePercenter]

No, they will just buy less food...

Poor people already shop at Walmart. If you go inside one, you'll see them.

My challenge was "I missed the portion that says their projected outlook is less due to food stamp reductions."

You won't. The Walmart 7 are trying a stock buyback to take the company private. Bad news, the stock goes down.

 

[gnarlylove]

Walmart is involved in the same scheme of under-paying employees so they can be helped by the Tax Payer and their profits get to shore that much more!

 

[HenryBHough]

And just think! Obamacare means all those welfare drones are free to quit their hated jobs anytime they want and suckle the public teat more readily!

But most won't.

And of course the Marxists among us could defund all those evil corporations by eating exclusively at home.

But they won't.

That would take effort.

 

[gnarlylove]

Without spending money the economy goes belly up. Not buying those "food" by-products would mean millions of cows wouldn't need to be slaughtered today, chickens, etc. and tens of thousands of acres could lay fallow instead of growing nutrition-less potatoes.

It would be a welcomed relief but also would damage the economy and futures stock. OH NO! Nothing worth doing is easy except masturbation.

 

[Sunshine]

I missed the portion that says their projected outlook is less due to food stamp reductions. Does the author think that without food assistance people will shop at more expensive stores? I don't get it.

No, they will just buy less food...

Poor people already shop at Walmart. If you go inside one, you'll see them.

You don't have to be poor to shop at Walmart. But Walmart isn't the cheapest place to shop these days. Before I go to Wally World, I hit the Dollar Store first. Spending your money wisely is a trait of good consumers. The more you don't spend at the grocery, the more you have for other things.


It is easy to see why some people don't feel any difference in being poor and being middle class. They buy bottled water and make up at Walmart. Then they get a better job. So they buy more expensive bottled water and buy make up at Dillards. I am going to shop where I get the best buy.

I'm not doing that so much here these two months on the Gulf. They have a Publix here where you can get things that I can't get in rural Kentucky. So, I'm treating myself. But when I get home, I'll go back into my squirrely ways.

 

[Sunshine]

Without spending money the economy goes belly up. Not buying those "food" by-products would mean millions of cows wouldn't need to be slaughtered today, chickens, etc. and tens of thousands of acres could lay fallow instead of growing nutrition-less potatoes.

It would be a welcomed relief but also would damage the economy and futures stock. OH NO! Nothing worth doing is easy except masturbation.

Racist.