Wal-Mart Stores, Inc. (WMT)’s Shares Tank on Tepid Sales Forecast

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The shares of Wal-Mart Stores, Inc. (NYSE:WMT) are trading lower after the company released its fourth-quarter and full-year 2016 financial results and fiscal 2017 guidance indicating a tepid sales growth.

The stock price of Wal-Mart was down 2.75% to $64.29 per share at the time of this writing around 1:54 in the afternoon in New York. The stock dropped as low as $62.35 per share earlier today.

Wal-Mart financial results

Wal-Mart reported adjusted earnings of $1.49 per share for the fourth quarter, higher than the $1.46 per share expected by Wall Street analysts based on data from Thomson Reuters I/B/E/S.

Including the impact of discrete items related to store closures and other charges, the retail giant’s earnings were $1.43 per share. Last month, Wal-Mart announced its decision to close 269 stores globally.

The retail giant posted $129.7 billion in revenue, down by 1.4% for the quarter. On constant currency basis, its revenue was $134.4 billion, up by 2.2%.

Wal-Mart U.S. posted its six consecutive quarters of positive comparable sales, up by 0.6%. Its Neighborhood Market comparable sales rose 7%. Walmart International generated $32.7 billion net sales.

For the full-year 2016, Wal-Mart generated adjusted earnings of $4.59 per share. Including certain discrete items, it earnings were $4.57 per share. The retail giant’s total revenue was $482.1 billion. On constant currency basis, its revenue was $499.4 billion, up by 2.8% for the year.

Wal-Mart fiscal 2017 guidance

For the first-quarter of its fiscal 2017, Wal-Mart estimated to achieve earnings in the range of $0.80 to $0.95 per share.  For the full-year, the retail giant expected to deliver earnings between $4.00 and $4.30 per share.

Wal-Mart expected its net sales growth for 2017 to be relatively flat. The retail giant previously estimated to achieve a sales growth of around 3% to 4% on a constant currency basis.

Brian Yarborough, an analyst at Edward Jones, expressed concern regarding the company’s lackluster sales forecast given its investments renovations and wages. He noted that some competitors are outperforming Wal-Mart in the grocery market.

“It’s the same old story. They continue to struggle to drive traffic and sales,” said Yarborough.

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Marie Cabural
Marie holds a Bachelors Degree in Mass Communication. She has an extensive experience in Journalism. Marie started in the industry in high school and her forte is news and editorial writing. She previously worked as a news writer and radio program producer at Nation Broadcasting Corporation (NBC) in the Philippines. She has also experience in advertising, events management, and marketing. She was a former Young Ambassador of Goodwill to the 26th Ship for Southeast Asian Youth Program (SSEAYP). She also writes for ICANNWiki, ValueWalk, and the The Motley Fool Blog Network. You can contact Marie [email protected]

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1 COMMENT

  1. It could be avoided. Time to wake up America. When the middle class can no longer afford Walmart it’s the sign the middle class has finally been squeezed to the “Dollar Store” level. All the tax breaks, tax avoidance opportunities, and new and expanded wealth in the nation has been sucked up through tax dodges and special interest favors by the rich and big corporate interests, leaving the middle class to pick up the bill and fall farther and farther down the economic ladder. If you think it’s immigrants or shipping jobs overseas that’s eating your lunch add up the tax breaks and tax avoidance scheme costs for the wealthy and big corporations you have to pay. $60 million jets, $5,000 to $25,000 lunches with $1,500 wines, NFL and other pro tickets, country club memberships, on and on and on, all written off, all paid by you. You need to fly a client or a Congressman to a plush Florida or Palm Springs golf resort in a $60 million dollar jet for a weekend of golf, a $7,000 dinner and $1,500 wine on the taxpayer? Why? Mr. Billionaire or Fortune 500 President you get to bribe your Congress person with unlimited millions of campaign contributions? Why? Mr. and Mrs. Middle class they are using your money for breaks and favors and shifting the tax burden to pay for them down to you. You are paying for your own trip to the poor house. Maybe that money would be better spent on lowering your taxes or sending your kids to college for just 2 alternative uses for you, not Mr. Big.

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