Walmart Blames Taxes, Weather as Sales Fall

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walmart store shoppers in Paramount, Calif.
Frederic J. Brown, AFP/Getty Images
Walmart reported weaker-than-expected sales figures Thursday morning, sending shares falling in early trading.

Total revenue in the first quarter came in at $114.2 billion, up just 1% over last year and short of analyst expectations. And the all-important comparable stores metric likewise holds bad news: Same-store sales actually fell 1.4% versus the same period last year.

The poor sales don't come as a complete shock. Last quarter's sales likewise came in a bit lower than expected, and same-store sales rose just 1%. Walmart predicted at the time that sales would remain flat through the remainder of the quarter, blaming the expiration of the payroll-tax holiday and delays in tax refunds for softening customer spending. This morning's report echoed that line, noting that "Comp sales performance was impacted by a delay in income tax refund checks, challenging weather conditions, less grocery inflation than expected and the payroll tax increase."

Walmart Stores (WMT) CFO Charles Holley said in the earnings release that he expects the second quarter to likewise be "challenging," with same-store sales projected somewhere between flat and a 2% increase.

Notably, this morning's earnings reports also announced a price increase in membership fees for Sam's Club, Walmart's big-box chain.

"As of May 15, Sam's Club increased its membership fee to $45 nationwide for both Advantage and Business base memberships, reflecting a $5 and $10 increase, respectively," the company announced. "The fee for Plus membership remains $100."

This is the first price increase for Sam's Club since 2006.

The report comes amid a troubled time for the retailer and its CEO, Mike Duke. The company is still dealing with the fallout from bribery scandals in Mexico and other international markets, and it notes in Thursday's release that legal expenses stemming from those issues are expected to cost the retailer between $65 million and $70 million.

Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.


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P-uNiT

Relying on low income workers that have little to no spending power because of their own low pay; controlled by rich big business like themselves; oh the irony!

They're also hiring incompetent managers, who barely have a high school degree or speak english now. They used to have high quality college grads (like myself).

May 20 2013 at 12:54 PM Report abuse rate up rate down Reply
lvh44leo

WalMart the next J C penny and WalMart will get smaller too!

May 17 2013 at 8:24 AM Report abuse rate up rate down Reply
littlecurly

Yea, they will blame everything under the sun except the fact that they have no customer service and lack of merchandise on the shelves and they seem not to care about anything but the money.

May 17 2013 at 1:51 AM Report abuse rate up rate down Reply
honeymoon

The Wal-Mart of today is not the same as the Wal-Mart of twenty years ago and not in a good way either. The stores are not stocked even in mid week. Service is terrible. Items are not priced or are located in an area where the price is incorrect. Cold food is sometimes left on shelves and then replaced in the coolers, so it is no good, but no one seems to care. WAKE UP Wal-Mart!

May 16 2013 at 7:38 PM Report abuse +1 rate up rate down Reply
lucky6

Wall Mart will continue to lose if they don't start displaying more "Made in America" brands! The tide is changing...if they don't change with it, it's their own fault.

If it isn't made in THIS COUNTRY, don't waste my time! I can afford a couple bucks more when I know it helps people here, rather than over THERE!

May 16 2013 at 2:19 PM Report abuse rate up rate down Reply
Mark Goldstein

This should be good news for the Liberals who are picketing around the country against Walmart as the bogeyman who is causing all of our ills in the US..They want hire pay for workers. Less hours; more health insurance; nicer stores..etc.etc.etc.

May 16 2013 at 2:13 PM Report abuse rate up rate down Reply
Big John

If people are paying more in payroll taxes that means they have a job. It is those without a job or those that cannot make a living wage like Wal-Mart pays that can afford to only purchase what they need not what they want.

May 16 2013 at 1:56 PM Report abuse rate up rate down Reply
David

The real reason is that people don't want to buy Chinese goods! And Walmart is loaded with them, and that is why we call them Chinamart!

May 16 2013 at 1:20 PM Report abuse +3 rate up rate down Reply
lvh44leo

what a joke weather and taxes if thats the case all stores would be down! Millions of consumers are just going back to other stores for Quality and SERVICE and are upset with all the hurt Wal Mart has caused to many Americans.and to competitors.

May 16 2013 at 1:07 PM Report abuse +4 rate up rate down Reply
Bunkie

We don't buy JUNK, and expect enough intelligent service, to be able to ask a question, about the product. Walmart, is cheap, and that is all, Anyone can be Cheap. Cheap, is not a value.
Walmart, must do good in low class, low income, areas, that only know "Cheap".
Like, many other chains, the "Cheap" end up the most expensive, because, of the corrupt ways, they must do business.
They put out flyers, advertising bargains, that often cost the ognorant buyer, as much as 5 times normal retail prices,
If you have any left, support your local specialty store.

May 16 2013 at 12:56 PM Report abuse +4 rate up rate down Reply