Earnings roundup: Wal-Mart cuts profit outlook

Wal-Mart Stores Inc. cut its profit outlook for the year, saying Tuesday during its second-quarter earnings announcement that consumer spending has slowed in the U.S. and abroad.

Analysts said Wal-Mart still has not overcome merchandising difficulties and thus is less poised than its discount competitors, such as Target Corp., to build sales among penny-pinching consumers.

The world’s largest retailer has put a new focus on price cuts, moving away from its attempts to get more well-to-do grocery shoppers to walk over to the general merchandise aisles.

The company said that for the full year, earnings per share from continuing operations is now estimated to be between $3.05 per share and $3.13 per share. The company’s initial forecast was in the range of $3.15 per share and $3.23 per share.

For its second quarter, the Bentonville-based retailer reported a net income of $3.10 billion, or 76 cents per share. That compared with $2.08 billion, or 50 cents per share in the year-ago period.

Analysts polled by Thomson Financial expected 76 cents per share.

“TJX Cos. on Tuesday said its second-quarter profit was cut by more than a half as the discount store operator recorded a $118 million charge because of costs from a massive breach of customer data, mostly to build up a reserve to cover estimated future expenses.

The owner of about 2,500 stores including T.J. Maxx and Marshalls also expects to record future breach-related charges of an additional $21 million — costs that analysts said are easily manageable for a firm posting strong sales despite the data theft and tough times for retailers.

Framingham-based TJX also slightly raised its earnings expectations for the year.

TJX reported net income of $59 million for the May-July period, or 13 cents per share, down from $138.2 million, or 29 cents per share, in the same period a year ago.

“The Home Depot Inc. reported Tuesday a 14.8 percent drop in second-quarter profit. The results beat Wall Street expectations, but its shares fell after executives made comments that suggested to investors that the sale of the company’s wholesale distribution business may not be a lock.

Chief Financial Officer Carol Tome said during an investor conference call that the world’s largest home improvement store chain would have to cut by nearly half the size of its plan to repurchase up to $22.5 billion in company stock if the sale of its HD Supply unit falls through.

Home Depot disclosed last week that it might not get as much money as originally thought for the supply unit. Speaking publicly about ramifications of a failure to sell appeared to be enough to spook investors.

For the three months ended July 29, Home Depot said it earned $1.59 billion, or 81 cents a share, compared to a profit of $1.86 billion, or 90 cents a share, for the same period a year earlier.

The Atlanta-based company said earnings from continuing operations totaled $1.52 billion, or 77 cents a share, in the second quarter.

Revenue in the second quarter fell 1.8 percent to $22.18 billion, compared to $22.59 billion recorded in the same period a year earlier.