Wal-Mart Stores, Inc. (WMT – Analyst Report) is a multinational retailer that runs large department stores and warehouse store chains. The company has more than 11,000 stores in 27 countries.
Wal-Mart’s earnings have started improving on the back of positive comps at Wal-Mart U.S. and improved performances in Sam’s Club and the international business, after several weak quarters in a row. This might be due to an improvement in the consumer spending environment. However, the company still faces several headwinds. Wal-Mart’s commitment to spend around $1 billion to raise wages, medical cost inflation and rising health care costs, and huge investments in the e-commerce business have significantly increased Wal-Mart’s expenses and will take a toll on the company’s profitability. Currency is also a major concern for Wal-Mart. Given these factors, investors were eagerly waiting for the company’s latest earnings report.
This is especially true given the recent earnings estimate revisions for WMT as the consensus estimate has been going downwards. Further, WMT has a mixed earnings history. WMT has delivered positive earnings surprise in two of the last four quarters, negative surprise in one quarter, and in-line estimates in another quarter, making for an average surprise of 1.37%.
Currently, WMT has a Zacks Rank #4 (Sell), but that could definitely change following Wal-Mart’s earnings report which was just released. We have highlighted some of the key stats from this just-revealed announcement below:
Earnings: WMT posted earnings of $1.03 per share, in-line with our consensus. Investors should note that these figures take out stock option expenses.
Revenue: WMT posted revenues of $114.8 billion. This missed our consensus estimate of $116.3 billion.
Key Stats to Note: Wal-Mart U.S. comparable store sales increased 1.1% in the first quarter, while it increased 0.4% at the Sam’s Club, without the impact of fuel.
