American multinational retail corporation Wal-Mart Stores Inc. (NYSE:WMT) on Thursday reported a drop in quarterly earnings, causing its share prices to plunge by more than 4%, falling to $53.25 in pre-market trading.
Wal-Mart said net income declined by 7.9% to $4.57 billion in the last three months leading to January 31 from the same period a year earlier.
The American retail chain also posted a smaller-than-expected growth in sales at its existing stores, disappointing Wall Street.
The world’s biggest retailer said it expects net sales to be flat in the company’s new fiscal year, which is a departure from a previous forecast of 3% to 4% growth.
Walmart cited the recent closure of stores globally and the effect of a stronger dollar as the main reasons for the disappointing figures.
The company’s profits have been dragged down by costs associated with store renovations and increases in employee wages. Wal-Mart has likewise been investing heavily on its e-commerce infrastructure as it tries to compete with online retailer Amazon.com.
Overall, Wal-Mart Stores, which includes Sam’s Club and its chain of international stores, posted an adjusted profit of $1.49 per share, beating estimates, while total revenue reached $129.7 billion.
Meanwhile, several other retailers in the U.S. including Kohl’s (KSS) and Macy’s (M) reported similarly underwhelming holiday numbers.