Wal-Mart Stores Inc., the worlds largest retailer, forecast profit this year that trailed analysts estimates as the sluggish U.S. economy and government benefit cuts threaten to restrain sales.
Profit share in the year through January 2015 will be $5.10 to $5.45, the Bentonville, Ark.-based company said Thursday in a statement. The average of 28 analysts estimates compiled by Bloomberg was $5.55 a share.
Chief Executive Officer Doug McMillon, who took the post this month, is trying to revive Wal-Marts U.S. same-store sales growth after lower food-stamp payments, higher taxes and struggles to keep shelves fully stocked contributed to four straight quarterly declines. Chief Financial Officer Charles Holley said that the economic trends, as well as higher health care costs, will continue to hurt the domestic business.
They continue to be pressured by the low-income consumer, said Brian Yarbrough, an analyst at Edward Jones & Co. Fourth-quarter net income fell 21 percent to $4.43 billion, or $1.36 a share, from $5.61 billion, or $1.67, a year earlier, the company said Thursday. Excluding some items, profit was $1.60 a share. The average of 22 analysts estimates compiled by Bloomberg was $1.59.
Consumer prices inch up 0.1 percent
U.S. consumer prices barely rose last month as a sharp increase in energy costs was offset by cheaper clothing, cars and airfares. The figures indicate inflation remains mild.
The Labor Department said Thursday that the consumer price index rose just 0.1 percent in January, down from a 0.2 percent gain in December. Prices have risen 1.6 percent in the past 12 months. Excluding the volatile food and energy categories, core prices also rose just 0.1 percent last month and 1.6 percent in the past year.
The year-over-year increase in core prices was the smallest in seven months.
Gauge of economy rises 0.3 percent
A measure of the U.S. economys health posted a moderate gain in January, suggesting that the economy will continue to expand in the first half of this year.
The Conference Board reported Thursday that its index of leading indicators rose 0.3 percent last month following no change in December and a solid 0.9 percent increase in November. The index is designed to signal economic conditions over the next three to six months.
Conference Board economist Ken Goldstein said the January advance reflects an economy that is expanding moderately. But he said growth was held back over the past two months by severe winter weather.
Number of jobless seeking aid drops
The number of people seeking U.S. unemployment benefits fell a slight 3,000 last week to a seasonally adjusted 336,000, a sign that layoffs remain low.
The Labor Department said Thursday that the four-week average of applications, a less volatile measure, rose slightly to a seasonally adjusted 338,500.