posted February 03, 2014 11:58 PM            

By Chris Isidore @CNNMoney January 31, 2014: 9:33 AM ET

NEW YORK (CNNMoney)
Wal-Mart Stores warned Friday that cuts to the nation's food stamps program late last year will hurt its bottom line.

The cut in food stamps went into effect Nov. 1. Food stamps had been increased during the height of the recession, but that expansion expired without Congressional action.

The expiration of the program saved the government $5 billion.

More cuts in food stamp funding could be on the way. A bipartisan deal on a new farm bill reached earlier this week could trim $90 a month in benefits for 850,000 food stamp recipients, saving the government nearly $1 billion a year.

The nation's largest retailer also said bad weather was affecting its financial performance. Additionally, the company said it will also have to take a charge related to previously-announced plans to cut 2,300 jobs and close some of its Sam's Club wholesale stores. The warnings mean the company will report a drop in earnings in the quarter that ends Friday.

A year ago, the company reported it was hit by the expiration of a temporary cut in payroll taxes, which it said caused sales to fall in the first quarter. http://money.cnn.com/2014/01/31/news/companies/walmart-food-stamps/

Walmart Lowers 4Q Outlook Amid Cuts to Food Stamps

By Matthew Rocco
Published January 31, 2014
FOXBusiness

Wal-Mart Stores (WMT) lowered its fourth-quarter outlook on Friday, as severe winter weather and government cutbacks to food stamps created headwinds during the holiday period.

The world’s largest retailer cautioned that its profit will match or fall “slightly below” the low end of its previous guidance for $1.60 to $1.70 a share. Walmart gave the same prediction for full-year earnings, which were expected to hit $5.11 to $5.21 a share.

Bentonville, Ark.-based Walmart also said same-store sales at Walmart U.S. and Sam’s Club, excluding fuel, to be slightly negative compared to the company’s prior outlook. In November, Walmart projected comparable sales to be relatively flat at its namesake U.S. stores, while Sam’s Club expected results to be between flat and 2% growth.

Chief financial officer Charles Holley said Walmart saw a greater-than-expected negative impact from reductions in the Supplemental Nutrition Assistance Program, or food stamps. The cuts went into effect on Nov. 1.

Holley added that eight winter storms resulted in store closures and impacted traffic throughout the fourth quarter.

Shares fell 55 cents to $74.20 in pre-market trading. Walmart has struggled to keep up with the broader market over the last six months, slipping 4% over that period. http://www.foxbusiness.com/industries/2014/01/31/wal-mart-sees-4q-adjusted-profits-at-or-below-low-end/