More retailers are on the way with their Q2 reports, and this time I will take a closer look at Wal-Mart Stores Inc. The stock peaked at an all-time high early last year, but slid. Now, the stock is on the way up again. To the top.
Wal-Mart Stores are changing and that`s fast. They are on the way to change to an e-commerce business from the traditional retail business. The firm has invested a lot of money in improving back and front-ends of the e-commerce business.
A couple of weeks ago, Wal-Mart acquired online retailer jet.com, for $3 billion. The company can feel the pressure from its biggest competitor Amazon, and their acquisition of jet.com will strengthen their e-commerce business.
Wal-Mart also sold its Chinese e-commerce business, Yihaodian. Everything was sold to the Chinese online retailer JD.com. All this is done to stay more focused on the international e-commerce presence.
CEO Doug McMillon said: «E-commerce growth here is too slow. The U.S number is better than the global number, but neither is as high as we
d like. We can see progress against several of the necessary capabilities we need to win in e-commerce, but were still working on a few others. We need them all to come together to see stronger growth.»
The company has increased its labor costs in addition to a stronger dollar, and that in turn has given them a negative YoY profit growth for the last 5 consecutive quarters. Stiff competition from Amazon has also turned Wal-Mart`s revenue negative in the last two quarters of fiscal 2016.
Store sales have come in positive for the last 7 quarters, despite the downturn on the top and bottom-line. The world`s largest retailer with its market cap of $225,42 billion, is guiding for US same store sales growth in the range of 1% – 3%, and Wal-Mart come out with a report on Thursday.
The Estimize consensus is looking for earnings per share of $1,04 on $120,39 billion in revenue. Compared to a year earlier this reflects a 4% decrease in earnings and flat sales.
Earnings estimates have increased 3% since the last quarterly report, with sales estimates unchanged.
Wal-Mart Stores Inc will report on 18th August, before the markets open.
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