Wal-Mart Stores, Inc. (NYSE:WMT), long the world’s largest retailer, announced today that its profits would come in at the low end of analysts’ expectations for the year ending January 2015. The retailer stated that it expected profits per share to be $5.10 to $5.45. Bloomberg, in compiling analysts’ predictions, found the average of 28 estimates to be $5.55.

Slow economy slows growth

The retailer said that the U.S. economy has failed to make the recovery it needs and also cited cuts in benefits like food stamps for its disappointing profits.

Wal-Mart

The announcement is hardly the start that Chief Executive Office Doug McMillon would have asked for when he took over the position earlier this month. Chief Financial Officer Charles Holley said today that the economy and growing health care costs will hurt the retailer’s domestic business.

Chief Executive Officer Doug McMillon, who took the post earlier this month, is trying to revive Wal-Mart Stores, Inc. (NYSE:WMT)’s U.S. same- store sales growth after lower food-stamp payments, higher taxes and struggles to keep shelves fully stocked contributed to four straight quarterly declines. Chief Financial Officer Charles Holley said today that the economic trends, as well as higher health care costs, will continue to hurt the domestic business.

“They continue to be pressured by the low-income consumer,” said Brian Yarbrough an analyst at Edward Jones & Co. in St. Louis, in an interview with Bloomberg today “I don’t see that changing.” Despite this warning Yarbrough reiterated his Buy recommendation for Wal-Mart.

As of this writing, Wal-Mart Stores, Inc. (NYSE:WMT) shares were trading at $73.60, down $1.25 per share or 1.67% following the reduced guidance by the company.

Fourth-quarter net income fell 21 percent to $4.43 billion, or $1.36 a share, from $5.61 billion, or $1.67, year over year. Analysts, on average, had expected a more robust $1.59.  However, revenue saw an uptick and increased 1.5% to $129.7 billion for the quarter. This did not, however, meet expectations with analysts looking to see $130.2 billion.

The present quarter’s guidance was also cut by Wal-Mart Stores, Inc. (NYSE:WMT) today. The company is now predicting earnings per share of somewhere between $1.10 and $1.20 while the Street’s consensus estimate called for earnings per share of $1.24.

Winter storms are partially responsible for this drop given that the company was forced to close over 200 stores during the “polar vortex.” Wal-Mart Stores, Inc. (NYSE:WMT) U.S. CEO, Bill Simon also pointed out in the statement that company plans to speed up its expansion of its Neighborhood Market and Walmart Express stores with the company poised to open nearly 300 of the properties which will double the stores at present.

Wal-Mart overseas outlook

Internationally, things aren’t much better for the retailer, which given the declining dollar only saw an increase in sales for the quarter of 0.4%. Between Brazil and China the company also plans to close around 50 stores but will build an additional 110 stores in China in the next three years.

Additionally, the U.S. Department of Justice and the U.S. Securities and Exchange Commission have opened investigations to see if Wal-Mart was brazenly bribing Mexican officials to speed up store opening. Wal-Mart has announced that it was also opening internal investigations on bribery in Brazil, India, and China. Expenses from the probes and investigations are expected to cost Wal-Mart Stores, Inc. (NYSE:WMT) nearly a quarter billion dollars this year.