Gas prices slow Wal-Mart express
May 12, 2005-- Home Textiles Today,
BENTONVILLE, Ark. — With rising gas prices putting the squeeze on lower-income consumers, Wal-Mart Stores Inc. missed its first quarter sales and earnings targets, and hoisted a yellow caution flag, warning Wall Street and investors it will come up short in the second quarter, and possibly all of this year.
The news triggered a modest sell-off in shares of the world's largest retailer, with Wal-Mart stock slipping 2.4 percent, or $1.17 a share, to $47.43 in unusually heavy mid-day trading on the New York Stock Exchange after the news came out.
Wal-Mart profits came in at $2.5 billion during the quarter, up 13.6 percent from $2.2 billion last year -- but only because of a $145 million after-tax windfall stemming from the favorable settlement of tax and legal issues. Pull that one-time gain out of the equation, and Wal-Mart profits were up a slender 6.9 percent, way off the company's usually strong double-digit pace.
“The results were not up to Wal-Mart’s standards,” said President and CEO of Wal-Mart Stores Lee Scott.
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