Sunday, 18 November, 2018

Disappointing Walmart results weigh on Wall Street

Weak Walmart results weigh on US stocks Disappointing Walmart results weigh on Wall Street
Nellie Chapman | 21 February, 2018, 12:02

Walmart said the operational blame goes to inventory replenishment and out-of-stocks, which have plagued the retailer for years and are especially damaging to sales during key shopping periods.

Home Depot (HD.N) edged down 0.14 percent after the largest US home improvement chain's quarterly profit beat market estimates in an improving housing market.

Walmart is building fewer big stores and focusing on investments in its online business while beefing up benefits for its workers.

It has also been expanding into new markets, forming a partnership to deliver groceries with Rakuten, the e-commerce giant in Japan, and pushing into new digital products, such as e-readers and audiobooks.

Other large retailers also declined following the disappointment over Walmart's results, with Target losing 3.8% and Costco Wholesale down 1.8%.

Furthermore, Walmart plans to revamp its website this year, with a focus on fashion and home goods, in line with its recently launched apparel brands.

Walmart forecast earnings of $4.75 to $5 per share for the current fiscal year on a 2 per cent increase in US same-store sales.

While still near four-year highs, yields have leveled off somewhat of late, as benchmark 10-year Treasury notes last fell 5/32 in price to yield 2.895 percent, from 2.877 percent late on Friday.

Walmart Inc. earned $2.17 billion, or 73 cents per share, in the three-month period ended January 31, versus $3.76 billion, or $1.22 per share, a year earlier. (WMT) reported fourth-quarter adjusted profit per share of $1.33 compared to $1.30, prior year.

February has been one Wall Street's most volatile months in recent memory.

E-commerce accounted for $11.5 billion of Walmart's U.S. sales past year, less than four percent of total revenues for the business.

For fiscal year 2019, Walmart forecasts an EPS of $4.75 to $5.00 on an estimated same store sales growth of 2 percent in U.S. Walmart locations. Over in Hong Kong, the Hang Seng Index rose 0.42% in early trade.

"We have good momentum in the business with solid sales growth across Walmart U.S., Sam's Club and worldwide".

The company said Tuesday that its federal corporate tax rate for the current year will be between 24 and 26 percent due to the new tax reform.

Most notably, sales slowed down significantly from previous quarters.

Fourth-quarter consolidated net income attributable to Walmart declined 42.1% year-over-year to $2.18 billion. Shares of Walmart were down almost 10 percent in early trading.