Wal-Mart abandons growth prediction as currency hampers foreign markets

Wal-Mart Stores Inc., the world’s largest retailer, lowered its annual sales forecast following the strong dollar pulled on the value of overseas revenue.

The company now expects net sales growth to be flat this year, in contrast to a previous forecast for growth up to 4 percent, based on a statement Thursday.

The outlook signal that Wal-Mart still faces hurdles in bouncing back from several years of slumping growth. Its U.S. same-store sales increase also was slow last quarter, rising just 0.6 percent.

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That fell short of the fir per cent analysts had predicted.

Excluding some items, earnings were US$1.49 a share in your fourth quarter, the Bentonville, Arkansas-based company said. Analysts had predicted US$1.46 on average, according to data published by Bloomberg. Fourth-quarter revenue fell 1.5 per cent to US$129.7 billion, also hurt by currency effects. Analysts had predicted US$130.6 billion.

In Canada, Wal-Mart reported a 5.8 percent increase in net sales, along with a 4.3 percent rise in sales at stores open for more than a year, which strips out the affects of added sq footage. Store traffic increased two per cent.

The currency headwinds could hamper a rally for Wal-Mart following a dismal 2015. The stock fell 29 per cent this past year but has shown signs of rebounding in 2016, gaining 7.8 per cent despite a tumbling market. Investors view the discount retailer like a safe place when the U.S. economy enters an economic downturn.



It may also profit from rising wages, particularly among lower-income consumers, and persistently low gas prices.

Wal-Mart’s profit continues to be hurt by slowing U.S. sales, as well as increasing paying for employee pay and it is online operations. Wal-Mart pays US$1.5 billion in higher wages within the fiscal year ending January 2017 as it raises its minimum wage to US$10 an hour or so and provides a one-time raise to more than A million employees this month. Those added wages will bring about profit falling between 6 percent and 12 per cent this season, the organization has stated.



Wal-Mart said last month that it will close 269 stores worldwide, including all of its small-format express stores.

Wal-Mart has been focused on renovating its 4,600 U.S. stores after many years of customer complaints about out-of-stock items, poor customer support and long waits at the checkout line. The organization has raised pay in an effort to attract and retain better workers, implemented a new system to stock its shelves, and increased staff in the register.

So far, the organization says the efforts are working. Last February, only 16 per cent of their U.S. locations met the business’s new standards for cleanliness and customer support. That number had reached a lot more than 70 percent by November.

Bloomberg News, having a file from Hollie Shaw