BENTONVILLE, Ark. – Wal-Mart Stores Inc’s. fourth-quarter profit came in just short of Wall Street’s expectations, sending its shares down 2.6 percent, as it cut prices to win over U.S. shoppers during the holiday season.
Walmart U.S., the biggest division of the world’s largest retailer, has been lowering prices, bringing back a wider variety of items and focusing on a low-price message to woo shoppers on limited budgets who started to shop at dollar stores and elsewhere in recent years. Traffic at those stores rose after six quarterly declines.
Walmart U.S. posted a 1.5 percent increase in sales at stores open at least a year. It was the second quarter in a row that Walmart U.S. same-store sales rose after nine consecutive quarterly declines.
However, operating income growth at Walmart U.S. grew at a slower rate than sales. Gross profit margin declined as the company made investments in its pricing strategy.
The rise in sales was also not as strong as analysts expected. Wal-Mart expected Walmart U.S. same-store sales would be flat to up 2 percent, compared with a 1.8 percent drop a year earlier. Analysts on average had expected a rise of 1.8 percent, according to Thomson Reuters data.
Shares of Wal-Mart, which were up 4.6 percent so far this year through Friday’s closing price of $62.48, fell $1.65, or 2.6 percent, to $61.20 in premarket trading.
Wal-Mart earned $5.19 billion, or $1.51 per share from continuing operations attributable to the company, up from $5.02 billion, or $1.41 per share, a year earlier.