Bentonville, Ark. – Walmart said comp sales at its flagship discount stores and Sam’s Club wholesale chain were down slightly for the fourth quarter, ended Jan. 31, despite positive holiday comps.
The world’s largest retailer attributed the downturn to severe winter weather that impacted traffic throughout the quarter, and the sales impact of a reduction in federal food assistance benefits on Nov. 1.
The company lowered its fourth-quarter forecast from flat comps at Walmart and flat to 2-percent gains at Sam’s Club, and also slightly reduced its earnings outlook.
In a research note, Janney Montgomery Scott retail analyst David Strasser attributed the modest earnings cut to aggressive holiday promotions “that rattled the industry,” and described it as money that was effectively spent.
“Essentially, Walmart put a large nail in the coffin of both Sears and Toys“R”Us by taking an EPS [earnings per share] hit of a few pennies,” he observed. “It also weakened many other retailers and independents, and perhaps made consumers/vendors cautious of buying from and shipping to these weakened companies. These are big dollars that could open up in the retail industry, if any of these weak retailers go away.”
He added that Walmart could conceivably continue its aggressive promotional stance this year following the success of its holiday strategy.
The company will release complete financial results for the fourth quarter and full year on Feb. 20.