Inside This Issue - News
New CEO takes helm as Walmart scales back outlook
February 17th, 2014
BENTONVILLE, Ark. – Walmart lowered its sales and earnings projections for the fourth quarter of its 2014 fiscal year, citing weaker-than-expected comparable-store sales at U.S. Walmart and Sam’s Club outlets.
“Despite a holiday season that delivered positive comps, two factors contributed to lower comp-sales performance for Walmart U.S.,” chief financial officer Charles Holley said in a statement. “First, the sales impact from the reduction in SNAP [the U.S. government Supplemental Nutrition Assistance Program] benefits that went into effect November 1 is greater than we expected. And, second, eight named winter storms resulted in store closures that impacted traffic throughout the quarter.”
The announcement came one day before Doug McMillon took the reins as chief executive officer, succeeding Mike Duke, and one week after the company’s Sam’s Club unit announced plans to lay off 2,300 workers.
The job cuts at Sam’s Club include hourly employees and salaried assistant managers and amount to almost 2% of the warehouse club chain’s 116,000 employees, or an average of about four employees per club.
Walmart, which will issue its fiscal 2014 financial results on February 20, had previously forecast GAAP, or reported, fourth quarter earnings from continuing operations of $1.50 to $1.60 per diluted share, with adjusted, or underlying, earnings projected at $1.60 to $1.70 per share. Full-year earnings were estimated at $5.01 to $5.11 per share, with adjusted earnings between $5.11 and $5.21 per diluted share.
“We now anticipate that our underlying EPS for the fourth quarter of fiscal 2014 will be at or slightly below the low end of our range of $1.60 to $1.70,” Holley said. “For the full year, we expect underlying EPS to be at or slightly below the low end of our range of $5.11 to $5.21.”