NEW YORK (AP) — Wal-Mart Stores Inc. cut its annual profit and revenue outlook as the world's largest retailer continues to deal with a tough economy at home and abroad that's squeezing its low-income shoppers.
Wal-Mart also reported second-quarter results Thursday that missed Wall Street estimates. The company's stock fell nearly 2 percent in premarket trading.
Wal-Mart is considered an economic bellwether because the retailer accounts for nearly 10 percent of nonautomotive retail spending in the U.S. The latest results indicate that many American households continue to struggle in a yo-yo economic recovery.
While jobs are easier to get and the turnaround in the housing market is gaining momentum, the improvements have not been enough to sustain spending for most Americans, who are juggling with tepid wage gains and higher costs of living.
On top of that, Americans are still dealing with the 2 percentage-point increase in payroll taxes that took effect Jan. 1. That means that take-home pay for a household earning $50,000 a year has been sliced by $1,000.
"The retail environment remains challenging in the U.S. and our international markets, as customers are cautious in their spending," Wal-Mart Chief Financial Officer Charles Holley said in a statement.
The Bentonville, Ark.-based retailer said its second-quarter profit rose 1.3 percent to $4.07 billion, or $1.24 per share, for the three months ended July 31. That compares with $4.02 billion, or $1.18 per share, a year earlier.
Net sales rose 2.4 percent to $116.2 billion. That figure excludes membership fees from its Sam's Club division.
Analysts expected earnings of $1.25 per share on revenue of $118.09 billion.
Revenue at stores open at least a year at Wal-Mart's namesake business fell 0.3 percent. That's considered an important measure of a retailer's performance. Analysts were expecting a 0.7 percent gain.
The decline marks the second straight quarter of declines for the Wal-Mart's U.S. namesake stores after six straight quarters of increases. U.S. Wal-Mart stores account for 59 percent of the company's total sales.
Wal-Mart said it now expects total sales to rise 2 to 3 percent for the full year. The company's previous forecast was for growth of 5 percent to 6 percent.
The company also took a dime per share off its full-year profit outlook, cutting it to between $5.10 and $5.30 per share, from between $5.20 and $5.40 per share.
Analysts were expecting $5.29 per share.
Wal-Mart's stock fell nearly 2 percent, or $1.47, to $74.93 in premarket trading.