Do you need any more proof about the global recession we are currently experiencing, despite the propaganda spewed by the MSM, politicians, central bankers, and Wall Street hucksters?
Wal-Mart has annual sales of just under $500 BILLION.
There are only 26 countries in the world with a higher GDP than Wal-Mart’s sales.
They are worldwide. Their results are tanking. They cater to the middle and lower classes. Only the .1% are experiencing a boom. The willfully ignorant masses are experiencing an ongoing recession.
Walmart Stock Slides After EPS Miss, Profits Tumble, Full Year Guidance Slashed
Submitted by Tyler Durden on 08/18/2015 07:27 -0400
It may not rely on such tech bubble (ver 1.0 and 2.0) buzzwords as eyeballs, clicks, “story”, “sharing”, “hyperxxxx, “non-GAAP” and so on, in fact with 2.2 million worldwide employees Wal-Mart is as old-school as it gets, which is why the fact that what was once the world’s most valuable retailer (until Amazon dethroned it a month ago) just reported not only a miss, on tumbling operating earnings, but slashed its guidance by 7%, should be very troubling to anyone who still looks as such trivial things as “fundamentals” and how these reflect the even more trivial “economy.”
This is what happened:
- Despite reporting revenue of $120.2 billion, or virtually unchanged from a year ago, and above the $119.7 billion expected, WMT reported EPS of $1.08, below the exp. $1.12. WMT promptly blamed exchange rates as the culprit for the $0.04 miss. Needless to say, when the dollar is weak no company ever says “EPS beat by $X.XX because of a favorable exchange rate.”
- The first problem emerged when looking at operating income, which dropped by -10.0% consolidated, and tumbled by a whopping -14.2% in the firm’s international stores.
- What was even more problematic is that while Wal-Mart reported a 4.8% increase in Net Sales in the US, rising to $74 billion, domestic Operating Income also tumbled by 8.2% to $4.8 suggesting there is a significant margin compression going on. Expect mass layoffs next as the company realizes that boosting minimum wages always has a profit trade off.
- Then there was the most important factor: free cash flow. “Free cash flow was $5.1 billion for the six months ended July 31, 2015, compared to $6.8 billion in the prior year. The decrease in free cash flow was due to lower income from continuing operations and the timing of payments.“
- But the worst news for WMT shareholders, and the reason why the stock is down 3% pre-market is because the company slashed its guidance as follows: Walmart updated full year EPS guidance to a range of $4.40 to $4.70, from a previous range of $4.70 to $5.05. This range includes Q3 EPS guidance of $0.93 to $1.05.
But at least stock was being repurchased: The company paid $1.6 billion in dividends and repurchased approximately 14 million shares for $1.0 billion. Even if it means a few thousand less greeters…
Oh well, time to brush such old-economy behemoths as WMT aside, and focus on the “new economy” stalwarts such as AMZN, which may have a fraction of WMT’s sales and profit, but at least it has a greater market cap. At least until investors realize that the secular decline in the US and Global economy as demonstrated by WMT is for real, and “stories” and “hype” can only carry you so far.
Full breakdown of WMT results:
The ignorance of the public would change in a heartbeat if the government couldn’t borrow a trillion dollars a year. The day will when our credit cards no longer work. Then we will probably enter a new dark age.
C’mon Jim, it’s because we’ve had such an awesome summer worldwide* that everyone’s at the beach and doesn’t have time to shop. Look for Q3 to come roaring back with that dynamic back-to-school shopping spree.
(*Yeah, worldwide, winter in the southern hemisphere is still summer for beach time! (offer not valid in NZ, TAZ, Argent.))
Penn head , how do you know this ? Your academia credentials don’t qualify you to make this judgment. Penn head , I read most of what you post but sometimes you get really weird.I guess it’s a good thing.
@Pb, it’s so cool that you’re my personal fan club. As for academic credentials to make the above statements, I have certificates in beach-ology and laidback-ness (that one with high honors), along with my degree in geoscience. Time was you didn’t need a B.S. to know that the southern hemisphere had seasons opposite of ours, or that parts of New Zealand and Argentina are far enough south to be cold, but I keep reading about “schools these days” and am glad I was able to rise above the flat-earth teachings of public school. (That would be public school in the US meaning, not in the rather different UK meaning.)
I only go to Walmart if I have to, for something only they sell (like Ibuprofen PM), or because the item is cheaper. Often Walmart isn’t. Free shipping on Ebay trips my trigger every time if the price is same/lower.