BENTONVILLE, Ark.-Same-store sales for both Walmart’s U.S. stores and for Sam’s Club are expected to be somewhat less than what the retailer said was expected of the quarter two months ago, according to a preliminary statement on the quarter from the retailer.
In addition, earnings for the company as a whole will likely not meet its earlier projections. Charles Holley, Walmart’s chief financial officer, said the company now expects earnings per share to finish below its previous expected ranges of $1.60-1.70 for the quarter and $5.11-5.21 for the fiscal year.
Holley said fourth-quarter same-store sales for both chains are now projected “to be slightly negative to the guidance provided in our third-quarter report.” When Walmart reported its third-quarter results on Nov. 14, the company said it expected comparable-store sales for the U.S. stores would be relatively flat compared to last year’s fourth quarter, while Sam’s Club was projected same-club sales (excluding fuel) to be flat to 2 percent higher.
Several factors have reduced Walmart’s expectations for the two chains, Holley said. The sales impact from the reduction in the U.S. government’s Supplemental Nutrition Assistance Program (SNAP) benefits, which went into effect on Nov. 1, was greater than expected. Second, eight named winter storms brought store closures that reduced traffic throughout the fourth quarter.
Earnings will fall below expectations due to previously disclosed events such as the closing of 50 stores in Brazil and China, and Walmart’s termination of franchise and supply agreements related to stores in India. Also, unanticipated items will act to slim earnings, which include non-income tax and employment claim contingencies in Brazil, store lease expense charges in China and a U.S. staff restructuring and club closures at Sam’s Club.