Despite several quarters of controversy over bribery allegations in Mexico, Walmart’s profitable earnings and strong sales in recent quarters made it a Wall Street darling, with its stock price hitting a record high Wednesday.
On Thursday, though, the company’s financial picture worsened as it reported quarterly results that missed analysts’ expectations, citing everything from a cold spring to late tax refunds, and the stock price began to decline.
“We didn’t have the first-quarter performance we wanted,” Michael T. Duke, chief executive, said in prepared remarks.
Net income rose 1.1 percent, to $3.8 billion, up 1.1 percent from the period a year earlier, while revenue rose 1 percent, to $114.2 billion; analysts expected revenue of $116.3 billion.
US same-store sales dropped for the first time since summer 2011, declining by 1.4 percent, versus Walmart’s projection of around flat. Visits to stores also fell, by 1.8 percent in the quarter.
While consumers remained under pressure, nothing dramatic had changed with their economic state in the quarter, Charles M. Holley Jr., Walmart’s chief financial officer, said in a call with reporters. Instead, the lower-than-expected sales in the United States were because of colder weather than last year, the payroll tax increase, tax refunds that came in later than usual, and a lack of food inflation.
Internationally, the company’s sales grew 2.9 percent, to $33 billion, and Walmart said it increased market share in several countries despite the weak sales.
On a per-share basis, earnings for the fiscal first quarter were up 4.6 percent to $1.14 per share, a penny below expectations. The company forecast lower second-quarter profit than the $1.29 expected, giving a range of $1.22 to $1.27.
Expenses shot up by 44.4 percent, or $200 million, mostly because of a larger bill for the bribery allegations in Mexico than expected. Last year, The New York Times reported that Walmart de Mexico officials had paid bribes to smooth expansion in the country, and executives at the company’s Bentonville, Ark., headquarters knew of the bribes and declined to take action.