Wal-Mart (WMT) Shares Lower after Earnings Miss, Guidance Cut
Shares of Wal-Mart Stores Inc. (WMT) were trading down -2.31 or -3.21 percent to $69.60 per share in this morning's premarket after the company released weaker than expected second quarter earnings and lowered its guidance for the full year early today. Wal-Mart stock closed at $71.91, off -0.47 or -0.65 percent in Monday's regular trading session.
Bentonville, Arkansas based Wal-Mart Stores Inc. also known as Walmart, was founded by Sam Walton in 1962 and incorporated in 1969.
For the company's second quarter ended July 31st, Walmart reported a profit of +$3.48 billion or $1.08 per diluted share compared to $1.21 per share in the same period one year ago. Walmart earnings were negatively impacted by $0.04 due to currency exchange rates. Analysts expected the company to report a profit of $1.12 per share.
Revenue came to $120.2 billion or $124.5 billion on a constant currency basis. Walmart reported a +1.5 percent increase in comparable store sales in the U.S., driven by traffic of +1.3 percent with neighborhood market comp sales increasing by +7.3 percent due to strong sales from new stores.
Doug McMillon, President and Chief Executive Officer of the company said in a press release that, "We're pleased that the investments we've made are helping to improve our business. Even if it's not as fast as we would like, the fundamentals of serving our customers are consistently improving, and it's rein our comps and revenue growth. In this case, our desired changes require investments, which are pressuring earnings this year. We're confident that our strategic plan will create robust sustainable growth for shareholder returns over time."
Walmart downwardly revised its earnings guidance for the full year to a range of $4.40 to $4.70 per share from a range of $4.70 to $5.05, which included third quarter guidance of $0.93 to $1.05. Analysts expected full year earnings of $4.77.
In addition to pressure from foreign operations caused by the strong U.S. Dollar, the company said profits were weighed down by the company's decision to increase hours for workers in stocking positions and at the front of the store in its effort to improve customer service. Walmart stock has been under considerable pressure, having begun the year trading over $90 per share, the stock continues to reflect the company's slowdown. This morning's action will have the stock open at a new yearly low.
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