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.
UK supermarket brand George at Asda is on a journey to a more sustainable supply chain through its Responsible Retail programme. Lynne Tooms, senior director of quality and sourcing, explains why reta...
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...
Global Online Retail industry profile provides top-line qualitative and quantitative summary information including: market size (value 2008-12, and forecast to 2017). The profile also contains descrip...
Online Retail in the United States industry profile provides top-line qualitative and quantitative summary information including: market size (value 2008-12, and forecast to 2017). The profile also co...
Food and drink internet retailing posted outstanding growth in 2012 and 2013. Working females in urban centres with a busy lifestyle find it convenient and time saving to purchase groceries online. It...
- Myanmar - right time, right place, new challenges
- 3D printing gears up for fashion industry change
- Apparel working conditions linked to profit
- Cutting pollution saves China textile mills money
- Adidas worker hotline bridges communication gap
- China cotton imports to rise as Xinjiang cuts crop
- Crystal first China licensee of RevoLaze tech
- Thailand project to vertically integrate clothing
- Cambodia growth to slow on competition and cost
- Traceable label offers textile transparency