Holding and may add, but at much lower prices.
Wal-Mart Sales Expected to Rise -- Earnings Preview
DOW JONES & COMPANY, INC. 12:57 PM ET 8/16/2017
Symbol Last Price Change
WMT 80.82down +0.05 (+0.06%)
QUOTES AS OF 03:55:46 PM ET 08/16/2017
Wal-Mart Stores Inc. (WMT) is scheduled to report its second-quarter financial results before the market opens on Thursday. Here is what you need to know:
EARNINGS FORECAST: Analysts are expecting earnings per share of $1.07, according to Thomson Reuters, roughly flat with Wal-Mart's(WMT) year-ago adjusted earnings of $1.07 per share, which excluded the sale of its Yihaodian website in China.
REVENUE FORECAST: Analysts forecast $122.84 billion in revenue, up from $120.85 billion a year ago.
WHAT TO WATCH:
STORES AND SALES: Investors are expecting Wal-Mart(WMT) to report another increase in sales and foot traffic, signs that the retailer is succeeding in a competitive sector. In May, Wal-Mart(WMT) said it expected sales in its existing stores to rise 1.5% to 2% in the second quarter. It has already done some of the hard work that rivals like Target Corp. are undertaking, such as investing in store improvements and digital initiatives.
GROWING COMPETITION: Wal-Mart's(WMT) efforts to compete with Amazon.com Inc. and a growing number of discount grocers and dollar stores has just started. In June, Amazon said it would buy Whole Foods Market Inc., taking aim at Wal-Mart's(WMT) grocery business, and European discount chains Lidl and Aldi are both in the midst of U.S. expansion efforts. Meanwhile, Dollar General plans to open thousands of stores in the coming years. Wal-Mart(WMT) is relatively well-positioned to take on rivals like Amazon, since the family of Wal-Mart's(WMT) founder, Sam Walton, owns more than half of the company's stock, giving it more flexibility to execute long-term plans.
E-COMMERCE: Wal-Mart's(WMT) U.S. online sales jumped last quarter, up 63% with the help of a series of digital acquisitions made since Jet.com founder Marc Lore took the e-commerce helm last September. But Amazon is far ahead of Wal-Mart(WMT) when it comes to attracting online shoppers. Mr. Lore has pushed Wal-Mart(WMT) to speed delivery times, redesign its website to make it easier to quickly reorder past purchases, and use its 4,700 U.S. stores to its advantage by offering a discount on some in-store pickups.
PROFIT PRESSURE: As Wal-Mart puts money into e-commerce and stores, many analysts aren't expecting big increases in profit. Still, Wal-Mart(WMT) executives say they are focused on cost-cutting. Over the last year, the company has used automation to cut some store jobs and laid off over 1,000 corporate employees. It has pressured suppliers to cut their prices, increased the fees suppliers pay to pass inventory through warehouses and narrowed the shipping window suppliers must hit to avoid fines. Consumer product manufacturers and Wal-Mart(WMT) employees are watching for signs of more cost- cutting or revenue-producing efforts.
Write to Sarah Nassauer at sarah.nassauer@wsj.com
