Walmart will remain in business after the company said on Wednesday that its profit growth was slowing, according to analysts.
Walmart said the company’s stock dropped by about 7% in after-hours trading after the analysts’ report.
The company said it expected its net income to be $1.45 billion for the year ending June 30.
Wal-Mart Stores Inc., the world’s largest retailer, said it had reached a milestone in its expansion strategy, with about 2 million U.S. stores opening this year, the company reported.
The company also said it was expanding into other categories such as food and consumer goods.
The news comes as the stock fell sharply after it reported the first loss in five quarters.
Shares of Walmart fell as much as 3.4% to $52.40 in after hours trading, in line with a more than 1% decline from Tuesday’s close.
Analysts said the loss was more likely a reflection of Walmart’s plan to boost spending on retail.
The stock will also face pressure from a federal investigation into its labor practices, which are tied to the deaths of workers at its stores.
Walter Pincus, a professor at the Wharton School at the University of Pennsylvania, said Walmart should be more concerned about slowing profits.
He said the stock has historically been a better bet than other companies in the same sector, which is why investors have been betting on it.
He said the lack of a profit-sharing agreement with workers could help Walmart’s bottom line, but he also questioned whether the company has enough cash to pay its workers.