BENTONVILLE, Ark., May 15 (UPI) -- Walmart issued a weaker than expected earnings forecast for the second quarter, marking its fifth consecutive quarterly sales decline.
The world's larges retailer said it expected earnings per share to be in the range of $1.15 to $1.25, which was lower than the $1.28 per share estimated by economists polled by Bloomberg. This follows Walmart's weak sales reported in the first quarter, which were also below market expectations.
Traffic at U.S. stores have dropped 1.4 percent in this period and sales at Walmart locations, despite a strong start to spring and Easter-driven sales, were down 0.1 percent.
Walmart CEO Doug McMillon, who took the post in February, has been attempting to revive the company's fortunes after lower food stamp payments and difficulty stocking shelves have contributed to a sales decline. The company is spending $600 million on opening more Neighborhood Market and Express stores, which are seemingly doing better than its supercenters and Sam's Club locations.
The second quarter forecast reflects rising U.S. healthcare costs and increased spending on Sam's Club memberships. The unusually harsh winter weather also contributed to the lull in sales.
"Like other retailers in the United States, the unseasonably cold and disruptive weather negatively impacted U.S. sales and drove operating expenses higher than expected," McMillon said.
Walmart has had to adapt to the changing landscape of retail shopping by spending a good deal of capital and buying several businesses as more customers prefer to make online purchases as opposed to visiting brick-and-mortar locations. While Amazon has been the dominant player in the online retail segment, the last year marked the first time Walmart's online sales outpaced that of Amazon's in the last decade.
Walmart shares were down 3 percent in premarket trading as a result of the lower forecast.