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Analyst not surprised by Wal-Mart's weak 1Q

NEW YORK (AP) -- An analyst said Friday that he's not surprised that Wal-Mart's first-quarter performance was weak, given conditions such as an increased payroll tax and unseasonably cool weather.

Thursday Wal-Mart Stores Inc. reported that its first-quarter profit edged up just slightly. The world's largest retailer, based in Bentonville, Ark., struggled with a sales slump in its namesake business during the three-month period. The discounter also offered a quarterly profit outlook that came below Wall Street's projections.

Wal-Mart blamed a number of factors affecting its budget-conscious customers, including the payroll tax increase, delayed tax refunds, job worries and bad weather. It is the latest in a string of big-name, consumer companies from McDonald's Corp. to Macy's Inc., to cite such hurdles in the first quarter of the year.

David Schick of Stifel Nicolaus said in a client note that of all of the companies he covers, Wal-Mart is one of the most affected by economic conditions due to its massive size, customer base and product categories.

The analyst said that Wal-Mart is working harder on its merchandising efforts in the U.S. and appears to be investing more in its international and overseas efforts.

Schick reaffirmed a "Buy" rating and $83 price target.

Shares of Wal-Mart fell 90 cents to $77.60 in midday trading. The stock hit an all-time high of $79.96 earlier this week.