Walmart Inc. (NYSE: WMT)
On Tuesday February 20th, 2018, Walmart released their fourth quarter earnings before the market opened for trading. Hours before the market opened on the New York Stock Exchange, shares of Walmart had already begun their rapid descent, culminating in a drop of of nearly 10 % before the market even opened.
The company, which had not missed on quarterly earnings In 10 previous quarters surprised many analysts and investors. The shares dropped by the biggest percent on a daily basis since the company went public.
Shares were down 10.17% or $10.65 closing at $94.11 when the session closed for trading at 4 pm. Even the Hefty dividend of 2.02 percent annually could not save the shares from dropping like a rock. The after-hours session show little or no interest in buying shares as they were only up 24 cents as of 8 p.m.
The Numbers
The adjusted earning numbers look like this: After adjustments, the company earned $1.33 per share which is well below the $1.37 that analysts had been expecting. Some comments from followers of the company suggested that their competition with Amazon in their online segment is what weighed heavily on their profit margins.
The company also reportedly showed an interest in focusing more on items in the $10 and above range. Historically, many Walmart shoppers are bargain hunters who generally look to spend much less if they can.
Company Comments
Chief Executive Doug McMillon had this to say on the conference call
“A smaller portion of the slowdown was unexpected, as we experienced some operational challenges that negatively impacted growth. Overall, we finished the year with e-commerce sales growth of more than 40%. So, we feel better about the year than the quarter.”
The Charts
The above chart shows Walmart on the daily price history going back to about October of last year. You will note the oval shaded area which illustrates and open gap that will likely be filled in the days or weeks to come now that the poor earnings have been announced.
The above price chart shows Walmart trading in the pre-market session on the left and the regular trading session in black on the right on a 5 minute basis. You can see how shares began their drop and steady decline once the earnings were announced hours before the market opened.
Company Profile
Walmart Inc. operates retail stores in various formats worldwide. It operates through three segments: Walmart U.S., Walmart International, and Sam’s Club.
The company operates discount stores, supermarkets, supercenters, hypermarkets, warehouse clubs, cash and carry stores, home improvement stores, specialty electronics stores, apparel stores, drug stores, convenience stores, and membership-only warehouse clubs; and retail Websites, such as walmart.com and samsclub.com, as well as mobile commerce applications.
It offers grocery products, including meat, produce, natural and organics, deli and bakery, dairy, frozen foods, alcoholic and nonalcoholic beverages, floral and dry grocery, as well as consumables, such as health and beauty aids, baby products, household chemicals, paper goods, and pet supplies; and health and wellness products.
The company also provides electronics, cameras and supplies, photo processing services, cellular phones, cellular service plan contracts and prepaid service, movies, music, video games, and books; stationery, automotive, hardware and paint, sporting goods, and outdoor living and horticulture, as well as fabrics, crafts, and seasonal merchandise; apparel for women, girls, men, boys, and infants, as well as shoes, jewelry, and accessories; and home furnishings, housewares and small appliances, bedding, home decor, and toys.
In addition, it offers fuel and financial services and related products, including money orders, prepaid cards, wire and money transfers, check cashing, and bill payment. Further, the company provides brand name merchandise, including hardgoods, softgoods, and selected private-label items, such as Member’s Mark.
It operates 11,593 stores under 63 banners in 28 countries and e-commerce Websites in 11 countries. The company was formerly known as Wal-Mart Stores, Inc. and changed its name to Walmart Inc. in February 2018. Walmart Inc. was founded in 1945 and is headquartered in Bentonville, Arkansas.-YahooFinance
