Shares of Wal-Mart Stores Inc. fell 3 per cent on Friday after Bloomberg quoted a mid-level executive's e-mail 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 Feb. 12 e-mail to other executives, Bloomberg reported. "The worst start to a month I have seen in my (about) seven years with the company."
The weak February sales start came after a disappointing January, according to an e-mail from Cameron Geiger, senior vice-president of Wal-Mart U.S. Replenishment, that was also quoted by Bloomberg. The replenishment department works on moving products from distribution centres 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?" Mr. Geiger asked in a Feb. 1 e-mail to company executives. "Well, we just had one of those weeks here at Wal-Mart 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.
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 recovered some losses, closing down $1.52 at $69.30 Friday on the New York Stock Exchange.