Walmart Blames Taxes, Weather as Sales Fall

walmart store shoppers in Paramount, Calif.
Frederic J. Brown, AFP/Getty Images

Walmart reported weaker-than-expected sales figures Thursday morning, sending shares falling in early trading.

Total revenue in the first quarter came in at $114.2 billion, up just 1% over last year and short of analyst expectations. And the all-important comparable stores metric likewise holds bad news: Same-store sales actually fell 1.4% versus the same period last year.

The poor sales don't come as a complete shock. Last quarter's sales likewise came in a bit lower than expected, and same-store sales rose just 1%. Walmart predicted at the time that sales would remain flat through the remainder of the quarter, blaming the expiration of the payroll-tax holiday and delays in tax refunds for softening customer spending. This morning's report echoed that line, noting that "Comp sales performance was impacted by a delay in income tax refund checks, challenging weather conditions, less grocery inflation than expected and the payroll tax increase."

Walmart Stores (WMT) CFO Charles Holley said in the earnings release that he expects the second quarter to likewise be "challenging," with same-store sales projected somewhere between flat and a 2% increase.

Notably, this morning's earnings reports also announced a price increase in membership fees for Sam's Club, Walmart's big-box chain.

"As of May 15, Sam's Club increased its membership fee to $45 nationwide for both Advantage and Business base memberships, reflecting a $5 and $10 increase, respectively," the company announced. "The fee for Plus membership remains $100."

This is the first price increase for Sam's Club since 2006.

The report comes amid a troubled time for the retailer and its CEO, Mike Duke. The company is still dealing with the fallout from bribery scandals in Mexico and other international markets, and it notes in Thursday's release that legal expenses stemming from those issues are expected to cost the retailer between $65 million and $70 million.

Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.

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