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.
