Wal-Mart Stores Inc. (Bentonville, AR, U.S.) said its December sales would likely reach only the lower end of its forecast as more people delayed holiday shopping or bought plastic gift cards, sending its stock down as much as 2 percent.
The retailer, which sells household and personal appliances, said the number of shoppers at its stores during the same time last year has declined, which it attributed to a trend toward later holiday sales.
Wal-Mart now expects sales at stores open at least a year to reach only the lower end of its forecast for 3 percent to 5 percent growth this month. The outlook prompted some Wall Street analysts to trim their sales estimates and heightened concerns about fourth-quarter earnings prospects.
U.S. consumers, accustomed to last-minute bargains, have been waiting until just before Christmas to finish holiday shopping. The day after Thanksgiving used to be the biggest shopping day of the year, but in recent years the Saturday before Christmas has earned that designation.
The popularity of gift cards, which may be redeemed for merchandise, has added to the last-minute trend and skewed retailers' results because they do not record the revenues until the cards are used.
Many cards are redeemed in January, and some analysts expect that to boost after-Christmas sales.
However, Wal-Mart has tried repeatedly to dampen expectations for a blockbuster holiday season, noting that its customers were still buying the lowest-priced items available and holding off on nonessential purchases. (Reuters)
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