For the year ending in January, Wal-Mart lowered its earnings-per-share forecast to a range of $4.40 to $4.70 from its outlook of $4.70 to $5.05 in February.
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“We’re pleased that the investments we’ve made are helping to improve our business”, Wal-Mart chief executive Doug McMillon.
Furthermore, “We believe that the stepped-up investments are an outgrowth of that complexity and prior over-engineering”.
Urban Outfitters, a youth-oriented apparel retailer, fell 2.1 percent as second-quarter net income slipped about one percent to $66.8 million. Miller has a 6.9% average return when recommending WMT, and is ranked #985 out of 3738 analysts.
By keeping smaller amounts of a wider variety of goods at distribution centers, Wal-Mart can make products available to customers without having to stock the items in every store, said Kevin O’Marah, head of research for supply chain talent development firm SCM World.
Those raises are part of a $1 billion investment in its workforce that also includes improved training.
Wal-Mart isn’t alone in facing some pain as it aims to deliver cleaner stores and faster and friendlier service to increasingly demanding shoppers who are shifting their spending to dollar stores or online. Analysts on average had expected $1.12 per share, according to Thomson Reuters I/B/E/S.
Wal-Mart (NYSE:WMT) reported second quarter and H1 results today, beating estimates on the top line but missing the consensus earnings per share estimate (here’s the earnings report).
Shares of Wal-Mart Stores Inc. appreciated by 0.6% during the last five trading days but lost 1.35% on a 4-week basis.
Wal-Mart’s U.S. division, which accounts for 60 percent of the company’s total sales, is undergoing a major overhaul under new U.S. CEO Greg Foran.
Wal-Mart Stores (NYSE:WMT) traded down 2.96% on Friday, hitting $69.78.
The significant cut to the forecast, even as Wal-Mart logged a 1.5 percent increase in comparable sales at U.S. stores open at least a year, highlighted a growing problem with controlling costs, said Edward Jones analyst Brian Yarbrough.
While worldwide sales were a factor decreasing revenue growth for the quarter, sales growth in the U.S. also struggled slightly.
The latest numbers underscore the struggles faced by Wal-Mart, once an unstoppable retail behemoth, as it tries to put a period of a prolonged decline in sales and market price behind it.
Bond prices fell. The yield on the 10-year US Treasury rose to 2.20 percent from 2.17 percent Monday, while the 30-year advanced to 2.86 percent from 2.82 percent. Freeport McMoRan (FCX) fell 3.1 percent to $9.92. The company also expects headwinds in its U.S. businesses from reduced pharmacy reimbursements rates, which are negatively impacting gross margins, and shift in the mix of cash versus insurance transactions.
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Shares of Home Depot rose on better-than-expected results, as well as solid US housing data.
