Wal-Mart Stores, Inc. (WMT)’s Shares Tank on Tepid Sales Forecast


The shares of Wal-Mart Stores, Inc. (NYSE:WMT) are trading lower after the company released its fourth-quarter and full-year 2016 financial results and fiscal 2017 guidance indicating a tepid sales growth.

The stock price of Wal-Mart was down 2.75% to $64.29 per share at the time of this writing around 1:54 in the afternoon in New York. The stock dropped as low as $62.35 per share earlier today.

Wal-Mart financial results

Wal-Mart reported adjusted earnings of $1.49 per share for the fourth quarter, higher than the $1.46 per share expected by Wall Street analysts based on data from Thomson Reuters I/B/E/S.

Including the impact of discrete items related to store closures and other charges, the retail giant’s earnings were $1.43 per share. Last month, Wal-Mart announced its decision to close 269 stores globally.

The retail giant posted $129.7 billion in revenue, down by 1.4% for the quarter. On constant currency basis, its revenue was $134.4 billion, up by 2.2%.

Wal-Mart U.S. posted its six consecutive quarters of positive comparable sales, up by 0.6%. Its Neighborhood Market comparable sales rose 7%. Walmart International generated $32.7 billion net sales.

For the full-year 2016, Wal-Mart generated adjusted earnings of $4.59 per share. Including certain discrete items, it earnings were $4.57 per share. The retail giant’s total revenue was $482.1 billion. On constant currency basis, its revenue was $499.4 billion, up by 2.8% for the year.

Wal-Mart fiscal 2017 guidance

For the first-quarter of its fiscal 2017, Wal-Mart estimated to achieve earnings in the range of $0.80 to $0.95 per share.  For the full-year, the retail giant expected to deliver earnings between $4.00 and $4.30 per share.

Wal-Mart expected its net sales growth for 2017 to be relatively flat. The retail giant previously estimated to achieve a sales growth of around 3% to 4% on a constant currency basis.

Brian Yarborough, an analyst at Edward Jones, expressed concern regarding the company’s lackluster sales forecast given its investments renovations and wages. He noted that some competitors are outperforming Wal-Mart in the grocery market.

“It’s the same old story. They continue to struggle to drive traffic and sales,” said Yarborough.