Shares of the retailer dropped more than 9 per cent in midday trading – one of its biggest single-day declines – as executives revealed their targets during a meeting with financial analysts in New York.
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“We continue to navigate a steady course through the worst storm in retail history, despite another challenging quarter”, he said at the time.
“Fiscal 2017 will represent our heaviest investment period”, said Holley, estimating that operating income would be affected by approximately $1.5 billion from the second phase of previously announced investments in wages and training.
Wal-Mart shares have not had a great year.
Under McMillon, Wal-Mart has accelerated the openings of smaller stores, which tend to be more conveniently located and let customers get in and out faster. Wal-Mart is expecting earnings per share (EPS) to increase by 5-10 percent for the year. In February, Wal-Mart announced plans to lift hourly pay for its US employees to at least $10 an hour by next year, well above the current federal minimum hourly wage of $7.25.
While Wall Street responded as though Walmart had taken a catastrophic hit – analysts were expecting a four percent gain in profits – the company’s message remained upbeat, according to Bloomberg. If you strip out higher wages, Wal-Mart has other issues.
Mike van Dulken at Accendo Markets said: “US markets closed lower after the Wal-Mart profit warnings dented sentiment”.
In an attempt to compete, Wal-Mart recently unveiled plans to improve the overall shopping experience by raising employee wages and investing in its e-commerce sector. He said the company will close a few stores internationally “that should be closed”, but “we don’t believe in shedding assets in a hurry for less than they are worth”.
Foran is now spearheading a huge overhaul of the U.S. division that accounts for more than 60% of the total business of the company. This includes the basics such as making the stores cleaner & well stocked. There are more than 18,000 people who work at the headquarters in Bentonville, Arkansas. That would contribute to an earnings per share decline between 6 and 12 percent in the next fiscal year, CFO Charles Holley said.
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(WMT) said Wednesday that its board of directors have authorized a new $20 billion share repurchase program that will be implemented over the next two years.
