Wal-Mart's fiscal first-quarter earnings declined 5 percent as severe winter weather kept shoppers away from its stores and pushed operating expenses higher than expected.
Its performance missed Wall Street's expectations, and the world's biggest retailer gave a second-quarter earnings from continuing operations forecast that also fell short of analysts' estimates.
Wal-Mart's stock fell more than 3 percent in premarket trading Thursday.
The chain's results give insight into shopper behavior during the U.S. economic recovery. It's considered an economic bellwether because it accounts for nearly 10 percent of nonautomotive retail spending in the U.S.
For the period ended April 30, the Bentonville, Arkansas, company earned $3.59 billion, or $1.11 per share. That compares with $3.78 billion, or $1.14 per share, a year ago.
Wal-Mart Stores Inc. said that bad weather hurt earnings by about 3 cents per share. Its performance was also dinged by a higher-than-expected tax rate.
Income from continuing operations was $1.10 per share.
Analysts, on average, expected earnings of $1.15 per share, according to a FactSet survey.
" 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," President and CEO Doug McMillon said in a statement. He reassured that the chain's underlying business in solid.
Total revenue rose 1 percent to $114.96 billion. Wall Street was calling for higher revenue of $116.43 billion.
McMillon said in a prerecorded call that U.S. sales rose during the back half of the quarter, but that Sam's Club had lower-than-expected sales. While membership income climbed, McMillon said it was mostly because of a fee increase implemented last year.
Wal-Mart International's sales rose 3.4 percent in the quarter, on a constant currency basis.
The company has 10,994 stores in 27 countries.
Sales at U.S. stores open at least a year dipped 0.2 percent in the quarter. The performance was the same when excluding fuel's impact. Wal-Mart said that customer traffic fell 1.4 percent as the average receipt climbed 1.3 percent. Online sales gave an approximately 0.3 percent boost to results.
For the second quarter, Wal-Mart anticipates earnings from continuing operations in a range of $1.15 to $1.25 per share. Analysts predict earnings of $1.28 per share.
Wal-Mart will hold its annual shareholders meeting on June 6.
The company's shares declined $2.52, or 3.2 percent, to $76.22 in premarket trading about 1½ hours before the market open.