Wal-Mart (WMT) Stock Higher on Earnings, Guidance
Shares of Wal-Mart Stores Inc. (WMT) were trading up +1.14 or +1.97 percent to $59.01 in Tuesday’s premarket after the company reported better than expected earnings and revenue for its fiscal third quarter of 2016. In addition, Walmart narrowed its guidance for the fourth quarter and full year. Wal-Mart stock closed at $57.87, up +1.45 or +2.57 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.
Walmart reported earnings per share of $1.03 including +$0.04 from certain lease adjustments, while the company had a negative currency impact of -$0.04. Total revenue came to $117.4 billion or $122.4 billion on a constant currency basis. This compares to earnings per share of $1.15 on $119 billion in revenue in the same period one year ago. The analyst consensus was for the company to report earnings of $0.98 on $117.8 billion in revenue.
Comparable store sales at the company’s U.S. stores were up +1.5 percent, its fifth consecutive quarterly increase, versus +0.5 in the same quarter last year, while traffic increased +1.7%. Neighborhood Market comparable store sales were up +8 percent with strong growth from new stores.
The company’s international net sales were $29.8 billion or $34.7 billion on a constant currency basis, while operating income fell -6.4 percent. Nevertheless, on a constant currency basis, operating income increased +8.5 percent.
Doug McMillon, President and Chief Executive Officer of the company said in a press release that, “We're pleased with the continued sales growth in Walmart U.S. and in our international business. Strong traffic and our fifth consecutive quarter of positive comps in Walmart U.S. stores show we are taking the right steps to win with customers. Although we still have work to do, we are positioning for sustainable growth through investments in people and technology to deliver a seamless shopping experience at scale.”
For the full year, Walmart narrowed its guidance for earnings per share from a range of $4.40 to $4.70 to a new range of $4.50 to $4.65. Analysts had expected full year earnings per share of $4.51. For the fourth quarter, the company forecast earnings of $1.40 to $1.55 compared to a previous range of $0.93 to $1.05, while expecting flat total sales growth. The new estimate includes a currency exchange negative headwind of $0.16 per share versus a previous forecast of $0.15 per share in the third quarter. Today’s earnings report could mark a turnaround for the company, especially if Walmart has a significantly better fourth quarter and holiday season.
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