Wal-Mart shares drop as company predicts lower profits
Shares in the world's biggest retailer, Wal-Mart, have plunged after it cut its profit forecast.
The company said it expected earnings per share to drop by between 6% and 12% in the next financial year. The announcement sent shares of the company tumbling by 8%, their biggest fall in six years. Wal-Mart said the lower profit forecast was because it was investing in e-commerce as well as increasing employee wages. The retailer's spending efforts are in part a reaction to slowing sales, and competition from online retailers like Amazon. It is also spending more to train and retain employees. In April, the company raised its base salary to $9 (£5.81) per hour and will increase it to $10 next year. 'Digital capabilities' In a statement chief executive Doug McMillon defended the strategy. "Our investments in our people, our stores, and our digital capabilities and e-commerce business are the right ones," he said. The company revised down earnings figures for this year as well, predicting growth would be flat, rather than the previously forecast growth of 1%-2%. Wal-Mart has blamed the fall in part on the strong dollar affecting overseas sales, something that has also affected other US retailers. Profits for the company dipped over the summer as sales in its UK supermarket chain, Asda, declined. The retailer also announced it would repurchase $20bn in shares from investors.