Walmart Stores lowered their forecast for annual sales after a strong USA dollar weighed on the revenue value overseas, bringing yet one more hurdle to a retailer trying to return from a slowdown in the U.S.
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The results, part of the retail giant’s fourth-quarter earnings report released Thursday, suggest progress in a major initiative Wal-Mart started a year ago to gain better control of a sprawling supply chain that’s been pressured by growing globalization and the rapid expansion of e-commerce sales.
Walmart U.S. comparable-store sales were up 0.6% for the quarter ended January 31, the sixth straight quarter of growth.
Currency fluctuations are expected to negatively impact net sales by approximately $12 billion for fiscal year 2017, the company projected.
In the final quarter of the fiscal year, net income fell 7.9 percent, to $4.57 billion, and revenue slipped 1.4 percent, to $129.7 billion.
CHIPPING IN: Nvidia, a company that makes graphics chips and processors for phones and tablets, rose after it reported a stronger quarter than analysts had expected. Wal-Mart also faces increasing competition from online leader Amazon.com, dollar stores and traditional grocers like Kroger, all of which are pushing lower prices and convenience.
“We are seeing momentum in our Wal-Mart U.S. business”, Chief Executive Doug McMillon said Thursday. The ratio improved, as 106 funds sold all Wal-Mart Stores, Inc. shares owned while 518 reduced positions. “They continue to struggle to drive traffic and sales”. It also changed policies on scheduling and paid time off. Those changes cost the company an additional $1.2 billion last year, and will cost it an additional $1.5 billion in the current fiscal year.
But with the retailer set to spend more than $1.1 billion this year on e-commerce, some analysts wonder about results.
About 3.77 million shares traded hands. The company has raised pay in an effort to attract and retain better workers, implemented a new system to stock its shelves, and increased staff at the register. Analysts had predicted US$130.6 billion.
“The company beat earnings due to a lower-than-anticipated tax rate, which is kind of low quality”, he said. Excluding the impact of currency and store closures, Wal-Mart said its sales growth guidance would have remained at 3% to 4%. “They are engaged in the operation of mass merchandising stores, which serve their customers primarily through the operation of three segments, which are the Wal-Mart Stores segment, the SAM’S Club segment and the worldwide segment”.
Wal-Mart faces pressure on all fronts. He added that the company is pleased with the “fundamental trends” improving its stores. Wal-Mart Stores, Inc. The stock has a market cap of $207.03 billion and a price-to-earnings ratio of 13.84.
US DATA: The Federal Reserve said USA factories cranked out more autos, furniture and food last month, boosting production by the most since July.
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Shares of the world’s largest retailer slumped 4.4% in pre-market trading Thursday as sales in the USA missed estimates and execs reiterated expectations for a steep profit decline for 2016.
