Wal-Mart's Asda unit had a challenging first quarter and delivered operating profits below plan, Wal-Mart said today.
Wal-Mart said overall its first-quarter profit rose 13.6% but fell short of its own projections as sales were hurt by high gasoline prices. Wal-Mart said the net profit for the quarter to April 30 rose 13.6% year-on-year to $2.5 billion. The retailing giant did not give separate figures for Asda.
Britain's second largest food retailer has been faced with tough competition from Tesco and a fight back from Sainsburys.
Figures released earlier this month by research firm TNS showed that Asda's market share had fallen to 16.5% from 16.9% in the 12 weeks to April 24, while Tesco extended its lead to 29.8% from 29.5%.
Sainsburys has taken second place from Asda, but the US-owned group has launched a series of price cuts and is also investing in non-food outlets such as its standalone George clothing stores and its Asda Living general retail outlets. It has also moved into financial services, clocking up half a million customers in 18 months.
Asda accounts for around half of the sales of Wal-Mart's international division and 10% of group sales at the world's top retailer.