The mega-store giant said it sees fourth-quarter net income at or below the low-end of guidance between $1.60 a share. For the full-year ending January, earnings are expected at or below a previously forecast range of $5.11 to $5.21 a share.
Analysts surveyed by Thomson Reuters had expected net profits of $1.65 a share for the fourth quarter and $5.17 a share for the full year.
In the fourth quarter, management projects slightly negative comparable sales growth for both Wal-Mart stores and membership-only Sam's Club. Previously, Wal-Mart had been expected to post flat comparable sales and Sam's Club to see growth as high as 2%.
The Arkansas-based business said a reduction in the government's Supplemental Neutrition Assistance Program (SNAP) and a high number of winter storms were to blame.
"First, the sales impact from the reduction in SNAP (the U.S. government Supplemental Nutrition Assistance Program) benefits that went into effect Nov. 1 is greater than we expected," explained CFO Charles Holley in a statement. "Second, eight named winter storms resulted in store closures that impacted traffic throughout the quarter."
By mid-morning, shares had taken off 1.2% to $73.83.
TheStreet Ratings team rates WAL-MART STORES INC as a Buy with a ratings score of A-. The team has this to say about their recommendation:
"We rate WAL-MART STORES INC (WMT) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, growth in earnings per share, increase in net income and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows weak operating cash flow."