NEW YORK — Walmart expects its profit to take a hit as the world’s biggest retailer works to fend off intensifying competition by perking up customer service and adapting to changing shopping habits.
The company that is known for its low prices and sprawling supercenters also forecast sales for its full fiscal year to be flat, hurt by unfavorable currency exchange rates.
Walmart had previously forecast sales growth of 1 percent to 2 percent. For its next fiscal year, it said profit could fall by as much as 12 percent. Its shares tumbled 10 percent to $60.03.
The disappointing guidance comes as Walmart works to fix its U.S. business amid pressure from rivals such as traditional grocers, dollar stores and .
At its annual meeting Wednesday in New York City, CEO Doug McMillon sought to reassure investors that the company is transforming to keep up with a rapidly changing retail landscape.
“We all know that retail has changed and will continue to change at an accelerating pace,” said McMillon, who took the job in February 2014.
Under McMillon, Walmart has accelerated the openings of smaller stores, which tend to be more conveniently located and let customers get in and out faster. The company is also stepping up its e-commerce efforts. On Wednesday, it said it was expanding its online grocery with free pickup to 10 additional markets, making the service available in a total of 20 markets in the U.S.
Such moves, along with a push to improve the cleanliness of its U.S. stores, are expected to help attract more higher-income customers than in the past, McMillon said. But he noted the company would also remain focused on shoppers who are driven by value.
For its fiscal 2017, Walmart expects earnings per share to be down 6 percent to 12 percent. It attributed a big portion of the decline to its investment in raising wages and providing more training for workers, which Walmart is hoping will lead to improved service.
