Wal-Mart feels winter chill on sales

• Walmart stores have been lagging behind its Sam%27s Club warehouse stores
• Cold%2C snowy weather in much of the country closed stores%2C slowed sales
• Cuts to food stamp program at start of quarter hit Wal-Mart hard

This winter's wrath put a chill on Wal-Mart Store's sales in the fourth quarter, leading to profit of $4.4 billion, a 21% drop, the company said Thursday.

Wal-Mart earned $1.36 a share, down 19% from $1.67 in the same quarter last year. For fiscal 2014 ended in January, the company earned $4.88 a share, a 2.8% decrease over fiscal 2013's earnings per share of $5.02.

Wal-Mart made a series of adjustments to earnings monitored by analysts. After those adjustments, Wal-Mart earned $1.60 a share for the quarter, topping the Wall Street estimate of $1.59 a share. For the year, adjusted earnings finished at $5.11 a share, beating the $5.10 a share estimate.

The numbers were in line with estimates when adjusted for one-time items, "so Q4 was fine," said Brian Yarbrough, a consumer research analyst at Edward Jones.

Wal-Mart shares closed the day down $1.33, or 1.8% to $73.52.

Wal-Mart CEO Doug McMillon emphasized that the company's global online sales, including acquisitions, topped $10 billion, a 30% increase over last year.

"We will continue to grow our global business by focusing on customers and serving them how they want to be served," said McMillon.

Improving store sales figures will be a priority, McMillon said, "and we'll focus on being even stronger item and category merchants, delivering value and improving our service levels. We'll remain focused on our expense structure, and innovate to improve productivity and aid our ability to deliver everyday low prices."

Also Thursday, Walmart doubled its plan to open small stores during fiscal year 2015 to 270 to 300 of its Neighborhood Market stores.

Wal-Mart also said its board approved a 2% increase in the annual cash dividend for fiscal year 2015 to $1.92 per share. The dividend will be paid in four quarterly installments of $0.48 per share.

Wal-Mart warned in late January that its fourth quarter would be hit hard by weather woes and reductions in food stamp benefits.

But the world's biggest retailer has other challenges. Walmart is losing market share to dollar stores and grocer Kroger, which tries to compete with Walmart on price, something not all chains have attempted, Yarbrough says. Walmart sales in grocery were negative again compared to some of its major competition, which have seen sales increases, Yarbrough said.

While sales in clothing and home products were good, "We believe they have some work to do on the grocery side of the business," Yarbrough said.

And dollar stores have other benefits, too, he says.

"Something tells me people are more into convenience right now," says Yarbrough. "You can get in and out of a dollar store in two to three minutes, about the time it takes to walk from your car into a Walmart."

Wal-Mart U.S. CEO Bill Simon acknowledged dollar store competition in an earnings call early Thursday.

The increase in planned openings of small stores, while tiny when compared to Walmart's mammoth overall footprint, helps the chain compete with dollar stores, Walmart said, especially in areas where consumers are especially sensitive to fuel prices. Besides, Walmart's small-store sales are also about four to seven times what dollar stores' are, said Simon.