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WalMart Carnage: Stock Plummets Most In 17 Years After Slashing Earnings Guidance, Blames Wage Hikes
Do you see what happens Larry when Wal-mart succumbs to "progressive" pressure and hikes wages? This:
- WMT CFO: NEW HIRES TO START AT $10 PER HOUR NEXT YEAR
- WMT CFO: 2017 RISE IN WAGES TO COST $1.5B
- WMT PLANS REDUCTION IN CAPITAL EXPENDITURES THROUGH FY19
- WAL-MART SEES FY2017 EPS DECREASING 6-12% VS FY2016
More from Reuters:
- Company says strong dollar expected to hurt full-year revenue by $15 bln
- Company says full-year net sales growth expected to be "relatively flat", mainly due to strong dollar; Walmart had earlier forecast 1-2 pct growth
- Says expects fiscal 2017 earnings per share to fall by 6-12 pct due to higher wages and training costs
- Company's $20 bln share buyback shrugged off in another sign that allure of buybacks is fading
- Up to Tuesday's close, stock had fallen about 22 pct this year
The summary from WSJ:
Wal-Mart, which is hosting a meeting with analysts today, also said it projects per-share earnings to decline by 6% to 12% in its next business year. Analysts, according to Thomson Reuters, have anticipated $4.73 in per-share profit for fiscal 2017, higher than the $4.54 expected for 2016.
“Fiscal year 2017 will represent our heaviest investment period,” said Charles Holley, Wal-Mart’s Chief Financial Officer. Operating income will be affected by previously announced investments, Mr. Holley said. Those investments include about $1.1 billion in e-commerce and digital initiatives.
By fiscal 2019, Wal-Mart said it expects earnings per share to rise 5% to 10%. Separately on Wednesday, Wal-Mart said its board approved a new $20 billion share repurchase program, replacing the $8.6 billion remaining on its program authorized in 2013.
In August, the retailer warned its profits would suffer this year as it steps up spending amid increasing competition. The company’s investments on behalf of customers have crimped profits but helped reverse a sales slump: Sales at U.S. stores open for at least a year rose 1.5% in the most recent quarter, the fourth quarterly increase after a long period of decline.
Yes, the company just slashed its 2017 earnings forecast by up to a whopping 12%... but at least the workers are happy, if not so much the market as WMT stock plunges the most since Lehman February 2000 September 1998, and has lost more market cap than Twitter.
Carnage:
The news spread quickly, in the process blowing up WMT's bid/ask spread (chart courtesy of nanex)
Sending the dividend yield to record highs...
Dropping WMT below $200bn market cap (and AMZN now $56bn larger)...
We are sure these analysts will be explaining how the market has it all wrong...
Not even the company announcing a just as surprising $20 billion stock buyback is helping it.
Oh and speaking of "happy workers", now that WMT has just become an activist target, and eliminate any growth CapEx for the next 4 years, expect the company to proceed with the logical next step after it hikes wages: massive layoffs.
Congratulations American workers: you lose again!
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What corporation gives guidance of more than one year ahead? Political move? The Waltons have lost touch with their customers as they obviously believe in a broken system
Somewhat on-topis.
I've heard from multiple sources that theft has skyrocketed in retail, across the board. People are literally just walking out of supermarkets right under store security folks' noses with steaks, custom bakery cakes, 5 lb. pork loins etc.
Just wait 'til the economy takes a shit, it'll be a free-for-all.
Several retailers around here have beefed up security with personnel from security agencies. I've seen them with their "SECURITY" shirts following families around stores (probably a tactic some people use, bring the whole family along to steal stuff).
This is why you prep. When when the shtf you don't have to go to the store and can go buy more ammo instead.
Speaking of the free shit army...
http://time.com/4069935/thief-study/
A new study tracking teens and young adults finds that stealing is quite common: about 1 in 6 report having swiped something in the past year.
The study, published in the Journal of Economic Behavior & Organization, found that for most of these young thieves stealing is just a temporary phase, likely because they decide the risks outweigh the benefits.
Very true. I am forever in Home Despot as I own a manufacturing business and hate to keep inventory on hand. Never the less, there was a spate of time this summer where everytime I went there, there was cop car outside (I even witness two black yoots run out of the store with stolen power tools with a waiting LaWaterLaMellon waiting outside in a car), anyway, when I talked to the check out girl at customer service, she said they had apprehended 10 shoplifters in the last 2 weeks. The self check out is a thief's dream for stealing breaker switches and any high priced small items.
Wal Mart also mentioned in their 2015 annual meeting that theft was a serious problem.
At this point you might be thinking that we all pay for theft. No, we do not. With market conditions as they are, retailer can't raise prices, or folks will switch to a competitor. So they just have to absorb loses. Straight from a regional district managers mouth of a large grocery store chain (he rents a property of mine).
Last 2x I've shopped at HD, I used the self-checkout. Noticed there's now a camera facing directly at the person using it, with a screen showing the customer using the checkout.
Homo Despot is the worlds largest supporter of sodomites, bulldykes, and other assorted human garbage.
The fact that they are extremely understaffed and force consumers to use "self checkout" should be a wake up call every time you set foot in HD.
Wal-Mart is a reflection of the middle of the economy.
Soon the Fed banksters offer vast helcopter money.
More debt and money printing when everyone is already saturated.
Schemes from the criminals that should have been jailed.
What do you think barry? Where's the $15 per hour minimum wage?
Better stick you big fat fucking communist beak into Walmart's business barry, especially after they donated to your fucking ass in 2012 in exchange for Walmart locating super stores in Chicago.
Walmart's owners have their schnozes so far up Barry's ass it's amazing they get any oxygen to the brain.
Why else would they stop selling "assault rifles" in their stores unless it was to please their political master.
I asked a store associate why they no longer carried AR's and he said it was because the Walton family was afraid of all the blow back from the shootings.
I told him it was because Obama's Justice department threatened them with retaliation.
Fed has us screwed to the floor. Audit and abolish; prosecute and execute.
FUCK I'm hungry for some unicorn meats!
Check out Arbys...they have the meats
They are not succumbing to "progressive wage pressure". They have to raise the wages because they can't attract enough employees at lower rates. Please.
"They have to raise the wages because they can't attract enough employees at lower rates."
That in itself is an interesting metric that no-one else here has broached. They don't have wage competition from their competitors, they have to pay better than the F$A (Free $hit Army) "entitlements".
"Oh and speaking of "happy workers", now that WMT has just become an activist target, and eliminate any growth CapEx for the next 4 years, expect the company to proceed with the logical next step after it hikes wages: massive layoffs.
Congratulations American workers: you lose again!"
Zionist money grubbing BS! Jobs at any cost, even if it pays nothing and destroys the fabric of your local comunity, total BS! America did just fine without Walmart jobs. The idea that any job is a "good job" is fucked up. You could level every Walmart today, and McDonalds for that matter, and we would be missing NOTHING!
Perhaps the WMT/AMZN death cross is the one that actually matters.
So paying uneducated unskilled labores more than their market value is detrimental to a company's health, who could've guessed
"I double-dog dare the Fed to raise rates!"
- Peter Schiff
LOL, the 12 Federal Reserve PhD numbskulls look even more foolish.
The ultra-left media will cover for these educated idiots.
God bless America, the minimum wage and don't forget the soup kitchen and food banks. USA USA USA! lol
Some of the stores I've been into look like entire aisles haven't been cleaned for 10 years..And whatever you do,don't look down at the floor (Is that brown splotch from Copenhaigen,or did somebody actually take a dump on the floor?)..As for the employees,pay them whatever they want,it keeps a lot of petty criminals off the street..
Yep, fat people wearing butt floss just doesn't work like it used to....
My only complaint with WM is they never have bricks of .22LR in stock -
But the 50 round boxes of Federal (aluminum case) under $10 / 9MM and $15 / .45 ACP are hard to beat for range ammo.
Walmart needs more corporate welfare so we taxpayers can subsidize their employee wages with welfare and food stamps (and they don't want corporate taxes to pay for those programs either)
I don't shop at Walmart and only have to when I want to punish myself but as a casual observer, their lines are very long and yet have all those lanes not open. Maybe if they open those lanes, they will actually sell more items. Just a thought.
By the way, these fattie mobiles is like watching Wall-E. And that took place 700 years into the future. The ones in Philly are so incredibly ghetto and I see nothing but fatties.
I loeve it when Obama comes up with some way to force business to do some stupid idea he has. Nice to see Walmart could show him how succesful his ideas can be.
You're reading the playbook backwards. The USSA will have to nationalize WalMart on national security grounds to ensure distribution of EBT food and supplies.
Actually this is more an indication that the helicopters are warming up, filled with money for John Q Welfare, most of whom are too poor to buy at Walmart anymore.
WS knows this and is crushing WalMart in advance of riding it up right after the Helicopters drop the money on John Q Welfare and he/she waddles down to WalMart to buy a flat of SPAM...
Bought a car battery there the other day. Most miserable fucking workers in the world. Just plain pissy and broke. I'd rather be working at a Kroger than a fucking Wal-Fart.
well u r supporting the place by buying from it
I guess so? Yeah, a car battery. Wasn't going to wait 13 hours for some mechanic to over-charge me to install it when I'm at home with a 15 month old child and need a car in case of an emergency. But, yeah I supported them. They served a once in a 5 year need.
The top six execs at Walmart receive just under $80M is annual salary. I don't know how many minimum wage employees they have but surely they could halve those salaries and dole out the savings to their workers without taking a big hit in the bottom line.
Winning, losing, bigger pie, smaller pie, more slices...when market mechanisms are short-circuited we all lose.
Walmart just proved that nothing happens in a vacuum.
For each action, there is an equal and opposite reaction.
WMT was headed for a shit the bed moment for 2 years.
Here we see "never letting a perfectly good crisis go to waste" opportunity for political grandstanding.
If we lay off some of the Walmart Assoicaties the the unemployment rate will go down right? I love it when a plan comes together and it is nice to take our largest employer and bring then down. Governmnet at its best but at least we raised the pay before we get rid of them.
I reinterate all those nasty things I've been saying: The depression is already here, hiding in plain sight, in the empty aisles of WalMex. When our struggling desert cities CA WMT store, adjacent to the already-closed Sam's Club, is also closed, the failure of the big-box retail model will start to come into clearer focus for both investors and customers. We'll be gearing up to add grocery-buying to our existing AMZN ordering. Maybe the deserted shopping center can be converted into an airport.
Or maybe a nice camp of some sort...;)
Question is; why needed wages to be raised in the first place?!
Americans have finally become completely grossed out about WalMart. What a fucking store.
"Company says strong dollar expected to hurt full-year revenue by $15 bln"
Walmart imports more than 90% of its products and offshores the bulk of its systems development. How does the stronger dollar hurt revenues?
Buy WMT on the dip. Dividend aristocrat and cash cow; even still. All these bashers must have oatmeal in their heads and no cash to deploy for days like today.
MUST
BUY
MORE
CHINESE
GARBAGE!
This news is fine for the progressives who pushed this as there's less money going to the stock holders (you know those evil rich folks) and the workers get more. Wealth redistribution under another flavor is all.
Walmart screws taxpayers for $7.8 billion per year in federal subsidies and tax breaks.
http://www.msnbc.com/msnbc/walmart-government-subsidies-study
The report estimates that Walmart and the Walton family—which co-founded the company and still owns a majority share—collectively profit from nearly $7.8 billion per year in federal subsidies and tax breaks.
Link to report: http://www.americansfortaxfairness.org/files/Walmart-on-Tax-Day-American...
Blaming strong dollar!!!!!!!
They're an importer of Chinese junk, a stronger dollar makes things cheaper, so increased margins. All else is piss poor management.
strong dollar costs 15 bil. and is the real cause of flat revenue. internet investment is a one time/one year cost two years away and labor costs get blamed for it all?!?!?
c'mon, this is bullshit. if you are going to blame labor then make an attempt at a case. upping labor costs will impact profits but not by 6-12%. it is more like 1% if that. the cost of labor per sale is a tiny increase.
Blame the slaves, lol.
slavery is good, slavery works
transfer Walmart sales to smaller margin Dollarstore, Dollartree, Familydollar, Dollarama, Giant Tiger, the squeeze is on
Strong dollar my ass.
As I type this there is a 10,000 TEU vessel almost to Vancouver BC. This vessel is unusual as it is almost carrying exclusive Wal Shit cargo from China. This is 1000's of 40'HC of Chicom trash for sheepeople's "Christmas" in interior MeriKa.
They will rail almost of these cans down thru the Rockies to DC's in the mid West. They will not get their dicks slammed in the door like last year.
But make no mistake this is 100% slave labor trash from China and WallMart is nothing more than a store front distribution outlet for cheap unneeded garbage from China.
They are gutting this country.
So tell us. How much MORE are YOU willing to pay for all your goods and services? 100%? 200%?
They will kick the can until the TPPis a done deal
to bad zerohedge cant crash and burn with the rest of the trash on this planet.................
80% of zerohedge folks are guns, gold, and ammo. Then, because they are emotionally crippled, the wife eventually divorces them and takes most of it.
Here let me get in a few zerohedge basics:
* Americans are fat and worthless
* I'm smart, your stupid
* I have a college degree so I must be smarter
* I use lotions, potions, and herbs so I will never get cancer
* My neighbors and fellow man and woman are parasites and I only care about me, myself, and I
* Etc etc.
Like Infowars, you check your common sense in at the door. I'm just here looking for trends and more information on various subjects that occasionally pops up.
For real non partisan economic understanding, I listen to Andy Gause's Secret World of Money. Sorry Jim Paplava, your "precious metals are not manipulated" stance made you loose all credibility with me years ago (right Doug Casey).
That is all.
The top financial sociopaths at WalMart are so over-leveraged that they couldn't take a few dollars less. So they let the value of their collateral fall off the cliff simply because the real workers needed a few more dollars to survive. No empathy nor conscience works both ways.
Strangely, they are blaming a strong dollar on their woes. It seems to me that if Wal-Mart were still an American corporation buying goods made overseas for sale to Americans, then a strong dollar would be good for Wal-Mart. Methinks Wal-Mart is now a global corporation, not an American one, and therefore they suffer as the world suffers from deflationary forces unleashed by our dollar being the best looking horse in the fiat currency glue factory.
Congratulations workers you just shot yourselves in the foot, again.
Stinking, traitorous, western corporate outsourcing hacks...
...just look where your 40+ years of "free trade"-justified insanity has brought us.
WE now reap what YOU sowed.
Cheapskate bastards.
Never, ever forget this people...or you'll repeat it again and again...
m
Why don't you go live in a country that DOESN'T have international trade and tries to be self sufficient? You know, like Cuba or North Korea...
Respectfully,
No one is talking about self-suffency here.
We're talking about rational trade policies that we didn't, and don't have, and the long term consequences for short term greed-based thinking.
Fatty foods may taste good today, but the long term cardiovascular risks make them foolish in excess.
Causes and conditions.
Can't escape them, regardless of the original pied piper rationale...
m
No WalMart on the Moon or Mars I guess.
Why do you peeps dislike Wal-Mart?
There is one Ninja Blender factory in the world.
NJ600 Ninja Professional Blender
Model Number NJ600
Wal-Mart price = $79.95
Macy’s price = $149.99
Save money. Live better.
Actual cost to make: $2.09
Oster Blender from 1973; still working after all these years.
Oh, heaven forbid, WalMart will make $14.5B instead of $16B next year because it's taking better care of workers. It's the market itself, the publcly traded stock and shareholders who demand ever increasing profits not matter the cost that is what's wrong here - not higher wages.
So, do YOU want your retirement savings invested in a company that doesn't make money? Or would you rather put your money into a fund or company that loses money?
What difference does that make, when your employer outsources your job, or can't afford to raise your wage to at least cover inflation, or health care costs, or cuts your job entirely...
...because the discretionary consumer income, on which it depends, dries up because those same consumers are downsized or outsourced out of a job too?
This is not chicken-and-the-egg stuff.
It is VERY clear cut.
Causes and conditions.
Only the long overdue accountability remains elusive--NOT the effects of the original madness.
http://m.youtube.com/watch?v=Rkgx1C_S6ls
m
This is what happens to a business that caters to the lowest common denominator and values quantity over quality. Mcdonalds is the same. The people with low time preference and high IQs have the money, they go elsewhere.
You mistake QUALITY for PRICE.
You will find many of the EXACT same products for sale at Walmart as at other "higher" priced stores. I even find the exact same products for sale at a dollar store that Walmart charges $4, and others charge even more.
Yeah I'm only referring to the general aura of the stores, the way a brand markets itself. You're right it's all the same garbage it's WHO you get to buy the garbage that keeps you afloat not how much of the cheapest garbage you can sell.
In Texas, a privately owned Grocery Chain, called HEB, has been delivering an ass-kicking to Wall-Mart.
Here is part of the story:
http://www.texasstandard.org/stories/who-will-win-the-grocery-war-h-e-b-or-walmart/
Whenever Wall-Mart puts up a store in Texas, HEB will put one nearby, or across the street.
HEB owns their own distribution systems, they own their truck fleets, and I understand they own large shares in the banks that have their money.
HEB owns manufacturing plants to then make profits on store items, so they are much more than just a merchandiser.
Lately, HEB has branched into Mega Stores (HEB plus) that are similar enough to Wall Mart to grab more of their business.
HEB buys real-estate and gets rental income from the strip malls/locations that it is present in.
WallMart and HEB have been fighting for Mexican retail business, and Wall Mart is making a strategic retreat. Wall Mart has told their staff to take it easy in Mexico, due to HEB’s lock on the business.
HEB invaded Wall Mart territory in Houston, the first time ever a competitor has taken it straight at Wall Mart. So far, HEB is also winning Houston.
Charlie Butt of HEB has been quoted, “We feel like we can compete with anybody – we welcome Wall Mart.”
Whenever I got to Wall-Mart (only when I have to), I yell out loudly as I cross the entry threshold - "I FEEL MY IQ LOWERING."
Generally, nobody in the store looks my way, or is offended.
Sheeple.
HEB rules. God I miss Texas.
WMT down 10%, soon headed lower to a 50 handle, not at all because of 'lipsticking' wage pressure explanations, but because of the mortally wounded consumer, and an emerging collapse that may soon and suddenly become visible to all. Broad indices starting their catch-up-decline here at 230pm, and Rick Ackerman's forecast of an overnight, sudden world financial collapse, any morning, days, weeks or months away, may best reflect the critical conditions business has been exposed to, thanks to Ben, Janet and the band of thieves:
http://usawatchdog.com/financial-collapse-to-wipe-away-all-the-lies-rick-ackerman/
Strange logic by Tyler: WalMart predicts 15 billion revenue drop from strong dollar; 1.5 billion cost of wage increase - therefore it is all, of course, due to the wage increase. If WalMart closes stores and makes huge layoffs, the competition will have more opportunities and may hire those laid off.
Walmart is the epitome of corporate welfare, but cunts like FOX News will never highlight this fact. Parasites like Walmart have no qualms when it comes to sucking the teats of the Tax-payer, yet Think-Tanks the Waltons part fund are hell bent against State welfare. Their hypocrisy knows no bounds.
In February of 2015(maybe even sooner), Obama began a series of phone calls to Wal-Mart's CEO to discuss raising wages at Walmart. The CEO forgot about the shareholders and yielded to Obama political pressure. The CEO should be immediately fired.
Valerie Jarrett confirmed that the phone calls happened.
I should also point out the McDonnalds also did what Obama wanted and they have almost destroyed the company.
So it has nothing to do with nuggets made of chicken butts then?
Couldn't be selling crappy stuff out of dirty stores. Naw, it's the employees fault.
New daily index lows here, and the WMT $59 handle ROLLBACK signs going up any minute:
http://www.investing.com/indices/us-30-futures-advanced-chart
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=wmt&insttype=Stock&freq=1&show=
12 cents on the dollar? Oh....the humanity
Why work? Just vote democrat...
they've lost it - http://www.huffingtonpost.com/entry/walmart-gun-oil-lube_561d2c78e4b028d...
They completey succeeded in placing everything you could possibly want or need under one roof and now are having problems. Crony capitalism and greed at its best. They deserve what they get.
$10 means different things, depending upon the location. over here the minimum wage is 9.47 or somesuch, so $10 is not a huge improvement. in states where the minimum is $7 or whatever, $10 is a bigger improvement...
Who the fekk even cares about EBT Mart anyways? let em burn
Here's the afterhours ROLLBACK to the new low $59 price handle for WMT:
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=wmt&insttype=Stock&freq=1&show=