Shares in Asda-owner Wal-Mart (NYSE:WMT) were down 3.2% in pre-market trade stateside after the world’s largest retailer warned on profits.
It lowered its per share earnings forecast for the year to US$4.40-US$4.70 from up to US$4.70-5.05 previously after missing Wall Street forecasts for the second quarter.
Earnings per share (EPS) for the three months ended June 30 came in at US$1.08 - down 13 cents on the year earlier and below forecasts that had been set around a median estimate of US$1.12.
The shopping giant, which owns Sam’s Club in the US and Asda in the UK, blamed a poorer than anticipated performance from its pharmacy operation and higher staff costs for the earnings miss.
"We're pleased that the investments we've made are helping to improve our business,” Wal-Mart chief executive Doug McMillon.
“Even if it's not as fast as we would like, the fundamentals of serving our customers are consistently improving, and it's reflected in our comps and revenue growth.
“In this case, our desired changes require investments, which are pressuring earnings this year.
“We're confident that our strategic plan will create robust sustainable growth for shareholder returns over time."
On the same day Wal-Mart announced its results shocker, UK subsidiary Asda had bleak news of its own, with sales down 4.7% year-on-year in the 11 weeks to the end of June.
It is the fourth trading update in a row in which Asda has reported a sales fall, but chief executive Andy Clarke pledged that things would get better for the chain from here on.
“I’m not distracted by the short-term picture. We have an enviably stable business with balanced books and the right strategy to return us to sales growth,” Clarke claimed.