Wal-Mart Stores, Inc. (NYSE:WMT) reported disappointing second quarter earnings Thursday. The world’s largest retail chain’s CEO Mike Duke said in a statement that earnings were hampered by higher payroll taxes and costs related to violations of an anti-bribery law. Wal-Mart said that its earnings for the quarter ending July 26 rose 1.3%. Net income came at $1.24 per share or $4.07 billion from $1.18 a share or $4.02 billion in the same period last year. That fell short of the Bloomberg consensus estimate of $1.25 per share.

Wal-Mart Stores, Inc. (WMT) Same Store Sales Fall, Cuts Outlook

Wal-Mart misses analysts’ expectations

For the second quarter, Wal-Mart Stores, Inc. (NYSE:WMT) reported revenues of $116.9 billion, up 2.3% from $114.3 billion in the corresponding quarter a year ago. Though international sales were up 2.9% to $33 billion. Same store sales, i.e. sales at stores that have been open for at least 12 months, declined 0.3% during the quarter. Analysts polled by Thomson Reuters were expecting an increase of 0.9%.

Wal-Mart Stores, Inc. (NYSE:WMT) has been aggressively advertising its low prices to attract customers. High unemployment rate and the 2% hike in Social Security taxes forced shoppers to make fewer trips to stores. In November 2012, Wal-Mart reported that the company’s overseas affiliates are facing bribery investigations related to the violation of the Foreign Corrupt Practices Act. Initially, only its Mexican unit was under investigation, but now regulators are also checking into its Chinese, Brazilian and Indian operations. Wal-Mart is hiring a large number of temporary workers.

Wal-Mart cuts forecasts

After disappointing second quarter earnings, the company slashed its current quarter as well as full year forecasts. Wal-Mart Stores, Inc. (NYSE:WMT) now expects third quarter EPS between $1.11 and $1.16 per share. That’s below analysts’ projections of $1.17 per share. The poor results and forecasts at Wal-Mart are considered a bad omen for the overall economy.

For the full year ending January 2014, the company now expects earnings of $5.10 to $5.30 per share. Wal-Mart Stores, Inc. (NYSE:WMT) had earlier projected to earn $5.20 to $5.40 per share. Analysts expect the company to earn $5.29 per share in FY2014. The Bentonville, Arkansas-based company said it now expects full year sales to grow between 2% and 3%, compared to the previous forecast of 5% to 6% growth.

Wal-Mart Stores, Inc. (NYSE:WMT) shares plummeted 2.37% to $74.59 per share at 10:08 AM EDT.