Walmart profit misses expectations

Walmart reported net income of $3.48bn (£2.2bn) in the three months to July, down from $4.09bn a year earlier.

Asda said like-for-like sales were down 4.7% in the period compared with last year, because of tougher competition.

The quarterly report is the worst to date for Asda under Walmart’s ownership.

Investment

Walmart sales at stores open for more than a year increased by 1.5% in the period, while revenue was $120.2bn, roughly unchanged compared with a year earlier.

Chief executive Doug McMillon said: “We’re pleased that the investments we’ve made are helping to improve our business. Even if it’s not as fast as we would like.”

Walmart said its fall in profit was due to increased investment in staffing – including more worker hours on the shop floor.

It also cited weaker profit margins in its US pharmacy business.

‘Upward curve’

Asda’s chief executive, Andy Clarke, said: “We continue to navigate a steady course through the worst storm in retail history, despite another challenging quarter.”

At a briefing, he added: “We’ve hit our nadir, but we’re on the upward curve now.”

He went on to say that he believed Asda’s third-quarter results would be better, with “signs of recovery” being seen already.

“We should see positive green shoots as we go into the new year,” he added.

Analyst Clive Black at Shore Capital said: “We have been somewhat surprised by the magnitude of Asda’s under-performance in 2015 and, indeed, we continue to scratch our heads on this matter given the magnitude of sales weakness recorded today.

“The competitive dynamics of the industry are clearly still not working in Asda’s favour.”





 

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