Wal-Mart (WMT) Shares Lower After Soft U.S. Comparable Store Sales

Shares of Wal-Mart Stores Inc. (WMT) were trading down -3.11 or -4.70 percent to $63.00 per share in Thursday’s premarket after the company reported its results for its fiscal fourth quarter early this morning. Wal-Mart Stores stock closed at $66.11, up +0.21 or +0.32 percent in Wednesday’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.
The company runs a total of 11,535 stores under 72 banners in 28 countries with e-commerce sites in 11 countries. Walmart is the largest company in the world by revenue and the world’s largest private employer, with more than 2.2 million employees. The company is half owned by the Walton Family, which retains ownership of 50 percent of the company through the Walton Enterprises holding company. As of 2009, the company is the largest grocery dealer in the United States with 51 percent of its U.S. sales from its grocery business. Wal-mart had revenue of $482.1 billion in its fiscal 2016 year.

Wal-Mart reported earnings per share from continuing operations of $1.43, with adjusted earnings per share of $1.49. Revenue came to $129.7 billion or $134.4 billion on a constant currency basis, up +2.2 percent from the same period one year ago. Analysts expected the company to report earnings per share of $1.46 on revenue of $130.5 billion.

International sales came to $32.7 billion, a decline of -9.7 percent year on year, with operating income of $1.7 billion, a drop of -19 percent. Same store sales increased +0.6 percent from the same period one year ago. The analyst consensus was for international sales of $33.29 billion and a same store sales increase of +0.9%.

Doug McMillon, President and Chief Executive Officer of Wal-Mart Stores stated in the company’s press release that, “We had a solid fourth quarter to close out our fiscal year, with adjusted EPS of $1.49. We are seeing momentum in our Walmart U.S. business as we continue to lap positive comps, and our international business is healthy and growing. We are pleased with fundamental trends that are allowing us to improve our stores, add critical capabilities and deepen our digital relationships with customers. Our initiatives are making it simpler and more convenient for customers to shop at Walmart.”

Wal-Mart reported e-commerce sales had increased +8 percent in the quarter, which was less than a third of the +26 percent increase reported by Amazon.com (AMZN) for roughly the same period. The figure is also lower than what is expected from Target for the year end quarter.

For the company’s full 2017 fiscal year, Wal-Mart is looking at relatively flat revenue growth and earnings per share of $4.00 - $4.37. For the first quarter, the company issued guidance of $0.80 - $0.95 per share compared to a consensus of $0.90 per share. In addition to the earnings news, the company increased its yearly dividend from $1.96 per share to $2.00 per share.

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Published on Feb 18, 2016
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2020. Content published with author's permission.

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