(NYSE:WMT) are trading down considerably in the pre-market this morning after the company reported their fourth quarter earnings and provided an outlook for the quarters ahead. Wall Street analysts were expecting the company to earn $1.46 per share on revenue of $131 billion.
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Shares of the world’s largest retailer have gained almost 8% this year compared to the 5%-plus drop in the S&P 500 (SPY) and the Dow Jones Industrial Average.
Yes, times might seem tough for Wal-Mart Stores, Inc.-and WMT stock might seem like a boring pick to own-but there is a lot for investors to like about a stock like this one.
There may have to be more fundamental shifts to Wal-Mart’s approach in order for higher-income households to abandon Target and Amazon in favor of Wal-Mart, experts say. (SSE) reported that its financial and operational results for the 2015 full year and fourth quarter.
Revenues, however, missed our consensus estimate of $130.4 billion. The satellite TV provider also had to surrender wireless spectrum licenses that weren’t eligible to receive small business discounts. Growth was pressured primarily by challenges in key global markets.
The move follows several improvements meant to increase worker retention and performance: Wage increases that will bring the base rate up to $10 an hour, for example, and a new training system for helping workers advance into higher-level positions. While the company already operates the gas stations outsides its Sam’s Club locations and some of its other stores in the U.S., Murphy operates majority of them – around 1100 in number. USA same-store sales in the quarter were up 0.6%, the sixth straight quarter of growth and the fifth straight quarter of increased traffic. Neighborhood Market comps increased approximately 7%. Company price to sale ratio is 1.43 and has 0.30% insider ownership. During the same quarter in the prior year, the company posted $1.15 EPS.
For the current year EPS is projected to decline to $4.13 down from estimated profits per share of $4.57 in 2016. However, it declined 9.5% from the year-ago earnings from continuing operations of $5.07 per share. On constant currency basis, its revenue was $134.4 billion, up by 2.2%. Annual operating income fell 11.2 percent, to just $24.1 billion from the previous year’s $27.1 billion. Currency is expected to negatively impact earnings by 3 cents. But Wal-Mart has warned that those efforts will weigh on profit this fiscal year. “Excluding the impact of the recently announced store closures and the continuing impact of a strengthening USA dollar, our fiscal 2017 sales growth guidance would have remained in that same range”, said CFO Brett Biggs.
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Walmart is now expecting its growth in net sales will be flat in 2016, compared to a forecast released previously for up to a 4% increase. But Wal-Mart sales were hurting. Now, the company (which has spent billions of dollars growing its ecommerce business) says it is focusing on building a digital relationship with customers, scaling its online assortment, and expanding online grocery. Watch out for the force behind Wal-Mart Stores Inc. bullish run in this report?
