US: Wal-Mart shares tumble as Q4 earnings slide
- Q4 earnings fall 21%
- Operating profit slides 3.1%
- Net sales edge up 1.4%
Severe weather in the US hit Wal-Mart profits
Wal-Mart saw its share price tumble this morning (20 February) after the retail giant posted a fall in fourth-quarter earnings and lowered its fiscal 2015 sales guidance.
In the three months to the end of January, net income amounted to US$4.4bn, a drop of 21% on last year. Earnings were affected by Brazil employment claim and tax contingencies, store closures in China and Brazil, costs related to the termination of its India joint-venture, and Sam's Club restructuring costs.
Severe weather in the US also affected profits, which Wal-Mart had warned in late January would hit its fourth-quarter.
Operating income fell 3.1% to $26.9bn, due to price investments, higher expenses, investments in e-commerce and soft sales.
Net sales, however, edged up 1.4% to $128.8bn. Currency negatively impacted revenues by around $5.1bn, but acquisitions added $0.7bn.
In the US, sales were up 2.4%, while comparable store sales declined 0.4%. International revenues grew 1.3%.
For fiscal 2015, Wal-Mart lowered its initial sales guidance. In October, the retailer forecast a 3-5% net sales increase. It now expects this to be toward the low end of the guidance.
"We expect economic factors to continue to weigh on our outlook," said CFO Charles Holley. "Some of the factors affecting our consumers include reductions in government benefits, higher taxes and tighter credit. Further, we have higher group health care costs in the US. These concerns, combined with investments in e-commerce, will make it difficult to achieve the goal we have of growing operating income at the same or faster rate than sales."
Separately, Wal-Mart said it would double its US small store expansion programme. The group now expects to add around 270 to 300 small stores during the fiscal, doubling its initial October forecast of 120 to 150.
Wal-Mart currently operates 346 Neighborhood Markets and 20 Walmart Express stores.
To fund this additional growth, the retailer has revised its capital expenditures forecast for the US segment to $6.4bn to $6.9bn, up from an initial range of $5.8bn to $6.3bn.
Wal-Mart's share price was down 1.55% to $73.62 at 10:48 ET.
Project Synopsis: MarketLine's Company Mergers & Acquisitions (M&A), Partnerships & Alliances and Investments reports offer a comprehensive breakdown of the organic and inorganic growth activity unde...
Wal-Mart Stores, Inc. (WMT) - Financial and Strategic SWOT Analysis Review provides you an in-depth strategic SWOT analysis of the company’s businesses and operations. The profile has been compiled by...
In 2008, the US-based multinational company Wal-Mart Stores acquired the Chilean hypermarket, supermarket and retail company D&S, which already owned more than 250 stores across the country. Every yea...
Wal-Mart de México SAB de CV is the leading and most influential chained grocery retailer in Mexico. The company’s strategy is based on offering a wide range of products at affordable prices. Conseque...
- Improved supplier capabilities benefit Next
- THE FLANARANT: Understand win-win or lose out
- China and Vietnam lead US apparel imports in July
- Retailers voice concerns on Scottish independence
- Next H1: What the analysts say
- H&M goes green with Conscious Denim
- TPP talks "make progress" but issues remain
- Adidas defends position despite investor unrest
- Brandix selects first "game-changing" innovations
- Ultrasonic execs disappear along with company cash
- Apparel Market in China to 2018 - Market Size, Trends, and Forecasts
- Wool in the 21st Century: new prospects for a familiar fibre
- Global market review of denim and jeanswear – forecasts to 2020
- Global Database of the Top 1000 Apparel Producers - Company Names, Financial Performance, Key Executives, and Contact Details
- Global Database of the Top 1000 Cut and Sew Apparel Producers - Company Names, Financial Performance, Key Executives, and Contact Details