“Wal-Mart Stores Inc. (WMT), the world’s largest retailer, projected first-quarter profit that trailed analysts’ estimates as an increase in the payroll tax curtails spending among its lower-income shoppers.
Earnings per share in the current quarter will be $1.11 to $1.16, the Bentonville, Arkansas-based company said today in a statement. Analysts projected $1.19, the average of 18 estimates compiled by Bloomberg.
Chief Executive Officer Mike Duke is working to keep prices low after a payroll-tax break expired Dec. 31, causing Americans to pay 2 percentage points more in Social Security taxes. The increased tax bite got Wal-Mart’s February sales off to the worst monthly start in seven years after disappointing results in January, according to executives’ e-mails obtained byBloomberg News.
“The low-end consumer is facing significant headwinds, including higher payroll taxes, delayed tax refunds, higher healthcare contributions, rising gas prices, and poor weather,”Deborah Weinswig, an analyst at Citigroup Inc. in New York, wrote in a report before the results were released.
Wal-Mart fell 0.7 percent to $68.75 at 7:20 a.m. in New York. The shares had gained 1.4 percent this year through yesterday….”
If you enjoy the content at iBankCoin, please follow us on Twitter
