Walmart executives are navigating through rough waters after a leaked company email obtained by Bloomberg News on Friday showed the retailing giant's head honchos aren't so optimistic about the company's latest earnings.
"In case you haven't seen a sales report these days, February (month-to-date) sales are a total disaster," Jerry Murray, Wal-Mart's vice president of finance and logistics, wrote in an email to other Walmart executives, CNBC reports.
"The worst start to a month I have seen in my (about) 7 years with the company," he added.
Murray's leaked email led to a 2% dip in the company's stock on Friday and a 1.21% drop today to a closing price of 36.69. Walmart officials say the email doesn't paint an accurate picture of the company's financial health and that other facts should be taken into consideration when discussing company sales.
"As with any organization, we often see internal communications that are not entirely accurate, that lack the proper context, and represent individual opinions," Wal-Mart officials said.
The increase in payroll taxes that went into effect at the beginnng of the year is to blame for Walmart's slumping sales numbers, Murray says. Ironically, Murray says low income families are spending less because of lower paychecks. For years, labor groups have argued that Walmart, the largest global retailer, is under paying its employees.
Economists say while sales at Walmart might have had a bad quarter, that does not mean other retailers have similar problems or that the economic recovery is showing signs of slowing.
"You're looking at a very important company in a very important space but it doesn't always mean that as one company goes, so goes everyone else and so goes retail sales," Joseph LaVorgna, chief U.S. economist at Deutsche Bank, told CNBC.
Walmart fourth quarter earnings will be released next Thursday. Analysts expect earnings of $1.57 a share on revenue of $128.92 billion, according to Thomson Reuters.