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Wal-Mart earnings suggest that the US payroll tax hike wasn’t such a great idea

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The numbers: Weak. Total revenues rose just 1% to $114.19 billion in Wal-Mart’s first quarter. Profit at the world’s largest retailer increased 1.1% to $3.78 billion. Total US same-store sales fell 1.2%. The company profit forecast for the second quarter disappointed Wall Street; shares fell in pre-market trading.

The takeaway: Wal-Mart’s results, often watched as a barometer of lower-end US consumer sentiment, suggest that the payroll tax increases that went into effect earlier this year are pinching less affluent consumers.

What’s interesting: There’s another possible explanation: Walmart’s competitors are eating its lunch. That’s something we won’t know until Family Dollar Stores and Dollar General report comparable quarterly results later this month.

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