Profit fell at the world's largest retailer. As Fred Katayama reports, rising sales was weaker than expected, pressuring Wal-Mart's stock.
Higher wages and rising expenses for technology investment biting into Wal-Mart's results, lowering quarterly profit more than 8 percent. Sales at existing stores rose. But that was weaker than expected as unusually warm weather and falling food prices bit into the top line. Wal-Mart's CFO said food deflation continues to be "challenging." Shares of the world largest retailer, which have risen nearly 12 percent this year, dropped sharply at the start of trading. One bright spot: a jump in digital sales, just like archrival Target. Helping Wal-Mart on that front: its acquisition of startup Jet.com in August. Cowen analyst Oliver Chen said, "We were pleased to see E-commerce growth accelerate to 20.6 percent from 11.8 percent last quarter." Like Target, Wal-Mart was optimistic about its outlook ahead of the holiday season, lifting the the low-end of its profit forecast for the fiscal year.