Wal-Mart Slashes Earnings Forecast

Updated from 11:21 a.m. EST

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Wal-Mart (WMT Quote) said December same-store sales rose 1.7%, excluding fuel, a figure below the estimates of analysts, and the world's largest retailer trimmed its fourth-quarter earnings forecast.

Analysts surveyed by Thomson Reuters expected a same-store sales increase of 2.8%. Wal-Mart had predicted a rise between 1% and 3%.

Total sales for the five weeks ended Jan. 1 fell 0.1% to $46.51 billion from $46.57 billion a year earlier.

"The current economy remains challenging for all businesses, and retailers have already seen customers pull back on discretionary spending. Consumers are very focused on value and necessities," said Tom Schoewe, executive vice president and chief financial officer. "We expect comparable-store sales for the January four-week period to be between flat and 2%.

Wal-Mart slashed its forecast for fourth-quarter earnings from continuing operations to 91 cents to 94 cents a share, compared with its prior outlook of earnings of $1.03 to $1.07 a share. Analysts expect earnings of $1.06 a share.

Shares of Wal-Mart were falling 7% to $51.66.

The news from Wal-Mart came on a day that most other chain stores were reporting their monthly results, many of them registering declines. Among them, Target (TGT Quote) said December sales increased 0.2%, but same-store sales fell 4.1%. Warehouse club operator Costco (COST Quote) said same-store sales decreased 4%.

Gap (GPS Quote) said its sales fell 12% for the month, while comparable sales dropped 14%. Competitor Abercrombie & Fitch (ANF Quote) had it even worse, as its sales slid 18% and same-store sales slumped 24% last month.

For department-store operator J. C. Penney (JCP Quote), comp sales were lower by 8.1%, and total sales were off 6.8%. Elsewhere in the group, Macy's (M Quote) set plans to close 11 underperforming namesake stores.

How does Wal-Mart's warning make you feel about the economy?
	Doesn't change my opinion Things are worse than I thought No company is safe from the recession Have we reached the bottom yet?