(Corrects paragraph 10 to add dropped word "sales")
* Says heavy discounting to continue into holiday shopping
* U.S. same-store sales flat in second quarter
* 2nd-qtr profit $1.21/share, matching analyst estimates
* Revenue rises 2.8 pct to $120.13 bln
By Sruthi Ramakrishnan and Siddharth Cavale
Aug 14 Wal-Mart Stores Inc cut its
full-year profit forecast, citing higher employee healthcare
costs and increased investment in its online business, and the
company said heavy discounting was likely to continue into the
holiday shopping season.
As expected, the world's largest retailer also reported flat
U.S. same-store sales, excluding fuel, for the second quarter -
the sixth quarter of declining or no growth.
Wal-Mart, whose shares were down slightly at $73.90 in early
trading, blamed intense competition and weak consumer spending
for sluggish U.S. same-store sales.
" ... Consumers are still concerned about cost of living and
employment," Chief Financial Officer Charles Holley said on a
conference call on Thursday.
U.S. retail sales in July were the weakest since January,
data showed on Wednesday.
Wal-Mart is investing heavily in its e-commerce business to
improve sales, trying to play catch-up in a market dominated by
Wal-Mart named a new head for its online business in June,
as part of plans to integrate the business with its network of
Online sales grew 30 percent to more than $10 billion last
year, but accounted for just a fraction of Wal-Mart's net sales
of $473 billion.
Wal-Mart said it expected online sales to grow 25 percent in
the year ending January.
Department store operator Kohl's Corp said on
Thursday its quarterly same-store sales fell 1.3 percent, while
Macy's Inc cut its full-year same-store sales forecast on
J.C. Penney Co Inc is scheduled to report results on
Thursday after markets close.
HEALTHCARE COSTS SOAR
Wal-Mart said it expected to spend $500 million on U.S.
healthcare this year, up from $330 million estimated in
February, as enrollments and medical costs rise.
Of its nearly 2.2 million employees, about 1.4 million are
in the United States.
Revenue rose by a better-than-expected 2.8 percent in the
second quarter ended July 31 as sales increased at small-format
"We're encouraged by the performance of our small-format
stores and e-commerce, areas where we're investing significantly
this year," Chief Executive Doug McMillon said in a statement.
Wal-Mart cut its full-year forecast for earnings from
continuing operations to $4.90-$5.15 per share from $5.10-$5.45.
This includes a 5-7 cents per share impact from spending on its
Net income attributable to Wal-Mart rose to $4.09 billion,
or $1.26 per share, from $4.07 billion, or $1.24 per share, a
Earnings from continuing operations attributable to Wal-Mart
were $1.21 per share, matching the average analyst estimate,
according to Thomson Reuters I/B/E/S.
Total revenue rose to $120.13 billion from $116.83 billion.
(Editing by Kirti Pandey)