BENTONVILLE, Ark. - Wal-mart Stores Inc. reported sluggish sales and a seven per cent drop in first-quarter profit as worker pay raises, spending on e-commerce and currency fluctuations put pressure on the bottom line at the world's largest retailer.
The company also reported a 1.1 per cent increase for a key sales measure at its U.S. Wal-mart stores, its third consecutive quarter of increases. However, that growth came below analysts' expectations.
By comparison, Wal-mart's Canadian stores performed well with revenue up 3.7 per cent and comparable-store growth of 1.8 per cent, thanks partly to improvements at its food business and strong performance in seasonal items.
The company has one fewer rival to contend with since Target closed all its Canadian stores in recent weeks but continues to face stiff opposition from Canada's domestic retail chains, particularly in the grocery business.
Walmart Canada said May 8 that it plans to spend about $350 million to acquire and renovate 13 former Target Canada stores and a distribution centre to add to its own retail network.
Overall, Wal-mart's profit and total sales missed Wall Street estimates. The weakness adds to questions about the health of consumer spending. The latest government retail sales figures showed spending was flat in April, and Macy's, Kohl's and J.C. Penney announced disappointing results despite low gas prices and improvements in the job market.
