The stock has underperformed competitors such as Target (TGT) over the past year, with Wal-Mart Stores shares dropping even lower on news that the company will cut its full-year earnings outlook to between $4.40 and $4.70 a share. Shares of Wal-Mart Stores have fallen about 16% in the past 12 months.
The retailer reported earnings of $1.08 a share, missing Wall Street estimates of $1.12 a share and below $1.21 a share a year earlier. Revenue came in at $120.2 billion, only marginally higher than last year's $120.1 billion and analyst predictions of $119.7 billion.
Sales were up 1.5% at stores open more than a year, providing a bright spot in the earnings report and beating estimates.
The biggest global retailer led the way in raising the starter wage for half a million of its workers to $9 an hour in February. The decision was made as a way to reduce employee turnover and improve customer service.
Although sales growth rose, the wage increases and investments in worker training have knocked company profits. Investment in online sales and the company's e-commerce platform also pushed earnings down.
The company also saw increased "shrinkage" to its inventory, which includes theft, damages to inventory or mistakes in recording goods.
The company has been beefing up its security personnel in response to the problem, according to The Wall Street Journal.
Reuters estimated that Wal-Mart Stores loses about $3 billion a year due to customer and employee theft.
Wal-Mart Stores Chief Executive C. Douglas McMillon told investors in a recorded message that: "The changes we need to make require investment, and we're pleased with the steps we've taken."