retailers report horrible sales for February. Blame it on the expiration of the payroll tax
(Reuters) - Shares of Wal-Mart Stores Inc (WMT.N) fell 2.1 percent on Friday after Bloomberg quoted a mid-level executive's email as saying the world's largest retailer had the worst sales start to any month in seven years in February.
Wal-Mart executives blamed the poor sales performance on increased payroll taxes as well as delayed tax returns, Bloomberg said.
Higher payroll taxes this year are seen as a potential problem for Wal-Mart and other discount retailers that try to attract lower-income customers who have less disposable income.
"In case you haven't seen a sales report these days, February (month-to-date) sales are a total disaster," Jerry Murray, a Wal-Mart vice president who works on finance in the U.S. logistics division, said in a February 12 email to other executives, Bloomberg reported. "The worst start to a month I have seen in my (about) 7 years with the company."
The weak February sales start came after a disappointing January, according to an email from Cameron Geiger, senior vice president of Wal-Mart U.S. Replenishment. Geiger's email was also quoted by Bloomberg. The replenishment department works on moving products from distribution centers to stores.
"Have you ever had one of those weeks where your best- prepared plans weren't good enough to accomplish everything you set out to do?" Geiger asked in a February 1 email to company executives. "Well, we just had one of those weeks here at Walmart U.S. Where are all the customers? And where's their money?"
Wal-Mart is scheduled to report fourth-quarter earnings on Thursday and has not pre-reported any sales figures.
Analysts on average expect fourth-quarter sales at Walmart U.S. discount stores open at least a year to rise 1.7 percent, excluding gasoline sales, according to Thomson Reuters I/B/E/S.
Asked for a comment on the Bloomberg report, Wal-Mart spokesman David Tovar said in a statement: "As with any organization, we often see internal communications that are not entirely accurate, that lack the proper context and represent individual opinions."
Wal-Mart shares closed down 2.1 percent at $69.30 on the New York Stock Exchange on Friday.
(Reporting by Brad Dorfman in Chicago and Lisa Baertlein in Los Angeles; editing by John Wallace and Matthew Lewis)