Updated to included comments from Walmart's earnings call.
NEW YORK ( TheStreet) -- Where were the rest of Wal-Mart's ( WMT) first-quarter earnings?
That was the key question being asked by Wal-Mart investors, and economic observers, on Tuesday. The answer, however, is not so easy to determine, which sheds light on several challenges facing the world's largest retailer. Wal-Mart reported earnings of $1.03 a share, missing analyst forecasts of $1.05. Wal-Mart had guided to earnings of 95 cents to $1.10 a share. U.S. same-store sales rose 1.1%, toward the low end of guidance for an increase of 1% to 2%. Customer traffic to Wal-Mart's U.S. stores rose 1%, marking a slowdown from a 1.4% increase during the holiday season. As with its earnings, U.S. same-store sales missed estimates, with analysts having anticipated a gain of 1.4%.
Total revenue came in at $114.8 billion, also falling shy of consensus forecasts of $116.3 billion. Volatile currency conditions, primarily the stronger U.S. dollar, walloped Wal-Mart's revenue by $3.3 billion. Excluding the effects of currency, operating income would have declined 6.1% instead of the reported 8.3% drop.
Shares declined 2.2% in premarket trading.
The sense of disappointment in the first quarter's performance was summed up by Wal-Mart CEO Doug McMillon. "Based on recent surveys, we know that many of our U.S. customers are using their tax refunds and the extra money from lower gas prices to pay down debt or put it into savings -- they're also using these funds for everyday expenses like utilities and groceries," said McMillon, acknowledging Wal-Mart supercenters are competing for precious gas savings. With gas prices back on the rise, Wal-Mart will have to fight even harder for disposable income.