Wal-Mart offers bleaker outlook for sales and profit growth

Wal-Mart Stores Inc., facing a retail slump and a decline in traffic to big-box chains, cut its annual sales forecast and predicted slower profit growth over the next three years.

Sales will rise 2% to 3% this fiscal year, the Bentonville, Ark., company said Wednesday at its annual meeting with analysts. Wal-Mart had previously projected growth of 3% to 5%, though it indicated in February that it expected to come in at the low end of that forecast.

The bleaker outlook sent Wal-Mart’s shares down $2.78, or 3.6%, to $75.20, their biggest one-day decline in almost two years. The broader stock market also fell sharply.

Chief Executive Doug McMillon is trying to reignite growth at a company hampered by shaky retail spending and slow shopper foot traffic. Wal-Mart’s same-store sales — an industry benchmark of health — haven’t risen in six quarters. To bounce back, the company is opening fewer big-box locations, focusing instead on smaller neighborhood stores and its e-commerce site.

“We need to develop a more seamless relationship with our customers,” McMillon said in a statement. “We won’t just be a store on the street. We’ll support our customers’ lives, with them in the driver’s seat, to save them money and time.”

The 47-year-old executive, who took charge of the company in February, said he sees plenty of room for improvement when visiting Wal-Mart stores on surprise visits. McMillon said stores need to boost in-stock levels — a measure of the merchandise available on shelves for customers to buy. They also should address long checkout lines and improve staffing by increasing the number of worker hours.