Walmart (WMT) Beats on Earnings and Revenue, Improves Guidance

Shares of Walmart Stores Inc. (WMT) were trading up +2.22 or +3.04 percent to $75.15 per share in Thursday’s premarket after the company released earnings for its fiscal second quarter of 2017 early this morning. The company beat analyst forecasts for both earnings and revenue in the quarter and improved its full year and third quarter guidance. Wal-Mart Stores stock closed at $72.93 per share, up +0.04 or +0.05 percent in Wednesday’s regular trading session.

Stock Analysis

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 11,539 stores under 63 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 2.3 million employees worldwide. The company is half owned by the Walton Family, which retains ownership of 50 percent of the company through the Walton Enterprises holding company.
Walmart (WMT) Beats on Earnings and Revenue, Improves Guidance
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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.

For the company’s fiscal 2017 second quarter, Walmart reported diluted earnings per share of $1.21, which was negatively impacted by $0.03 on currency translation. On an adjusted basis, Walmart reported earnings per share of $1.07. Total revenue came to $120.9 billion, an increase of five percent over last year.

On a constant currency basis revenue was $123.6 billion, up +2.8 percent over the same period one year ago. The analyst consensus was for the company to report earnings of $1.02 per share on revenue of $120.1 billion

Walmart reported its seventh consecutive quarter of positive traffic, up +1.2 percent, which led to a +1.6 percent rise in positive comparable store sales, its eighth consecutive quarterly increase. The company’s Neighborhood Market segment reported its comparable store sales had increased +6.5 percent in the quarter.

The company reported net sales for Walmart International were $28.6 billion. With the exclusion of currency impacts, net sales came to $31.3 billion in the quarter, an increase of +2.2 percent over last year’s second quarter.

In the company’s press release, Wal-Mart President and Chief Executive Officer Doug McMillon stated that, “We’re pleased with the positive momentum in our business. Our strategy in the U.S. is working as we delivered an eighth consecutive quarter of positive comps, and international also performed well. We remain focused on building e-commerce capabilities globally and executing our omni-channel plan, as evidenced by our recent alliance with in China and agreement to acquire in the U.S. Walmart is uniquely positioned to provide customers with a seamless shopping experience where we save them time and money.”

Walmart’s consolidated operating income saw an increase of +1.6 percent in the quarter, which included a $535 million gain for the sale of Yihaodian. Excluding the Yihaodian gain, operating income declined -7.2 percent. The decline was attributed to the company’s investments in people and technology in addition to the negative impact of currency fluctuations.

The company upwardly revised its guidance for the full 2017 year and now is estimating adjusted earnings per share of $4.15 to $4.35 or GAAP earnings per share of $4.29 to $4.49. Both estimates include an estimated dilutive impact of about -$0.05 per share, mostly in the fourth quarter. The nickel loss is expected as part of operating losses and the company’s planned takeover of

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Published on Aug 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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