Wal-Mart (NYSE: WMT) on Tuesday reported earnings that missed analysts' expectations for the holiday period, though revenue and same-store sales surpassed predictions.
The company's gross margins took a hit during the quarter due to promotional activity and its ongoing war with internet behemoth Amazon (NASDAQ: AMZN) to win a larger share of the grocery and apparel industries.
"During the quarter, [Wal-Mart] had additional EPS (earnings per share) headwind related to some smaller unplanned items and expenses we incurred as we pulled forward initiatives in order to take advantage of a higher tax deduction," CFO Brett Biggs said.
EPS were $1.33, adjusted, vs. $1.37 expected. Revenue was $136.3 billion vs. $134.9 billion expected. Walmart reported net income of $2.17 billion, or 73 cents a share, compared with $3.76 billion, or $1.22 cents per share, a year earlier.
Total sales in the fourth quarter climbed 4.1% from a year earlier to $136.3 billion. Traffic at U.S. stores was up 1.6%, and the average shopper's ticket value grew 1%.
Wal-Mart's same-store sales in the U.S. were up 2.6%, an increase for the 14th-consecutive quarter for fiscal 2018 and higher than the projected rise of 2.2%. Online sales grew just 23% during the period, much slower than the prior quarter's 50% jump. It has been more than a year since Wal-Mart acquired Jet.com, which gave the company an initial boost.
Wal-Mart has also set its fiscal 2019 earnings-per-share forecast at $4.75 to $5.00 Same-store sales at Wal-Mart U.S. stores are expected to climb at least 2%, while those at Sam's Club locations could rise as much as 4%.
WMT shares faltered $9.26, or 8.8%, to $95.52 early Tuesday.
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