NEW YORK (TheStreet) -- Walmart Stores Inc.'s (WMT) Massmart Holdings, the South African food and goods wholesaler it owns, said the country's retailers may face headwinds into next year as higher interest rates and prices sap consumer confidence, Bloomberg reports.
Earnings excluding one-time items declined 26% to 364 million rand ($34.3 million) in the 26 weeks through June 29, the Johannesburg-based company said. At constant exchange rates, profit fell 5.7%.
South African retailers are struggling as high unemployment and inflation force shoppers to cut down on major purchases. Retail sales were unchanged in June, the worst performance since December 2009, Bloomberg said.
Shares of Walmart are flat in pre-market trade.
TheStreet Ratings team rates WAL-MART STORES INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate WAL-MART STORES INC (WMT) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, reasonable valuation levels, increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."