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...
Canadean's "Delta Galil Industries Ltd. - Company Capsule" contains in depth information and data about the company and its operations. The profile contains a company overview, key facts, major produc...
Activists are ramping up the pressure on Italian fashion giant Benetton to pay into the Rana Plaza victims' compensation fund, claiming that nearly 1m people have signed a petition backing their campa...
Footwear business New Balance has hit back at rival Converse in a continuing row about the design of the latter's Chuck Taylor All-Star sneakers....
- Global supply chain trends at Sourcing at MAGIC
- Why voters don’t want more global supply chains
- Denim and athleisure top picks for back-to-school
- What's 3D-printing doing for apparel and footwear?
- Labelling – The importance of the fine print
- H&M takes action over Myanmar child labour breach
- Vietnam garment industry calls for strategy update
- Nike and Apollo create supply chain partnership
- US Q2 in brief - Express, The Buckle, Stein Mart
- Li & Fung joins FTA in sustainable sourcing pledge
- Too Many Standards
- Southeast Asia strategic sourcing review – a focus on Cambodia, Vietnam and Myanmar
- Under Armour, Inc. (UA) - Financial and Strategic SWOT Analysis Review
- Central America strategic sourcing review - a focus on Guatemala, El Salvador and Honduras
- THE GAP, INC.: Retailing - Company Profile, SWOT & Financial Analysis