Wal-Mart, Spending to Fend off Amazon, Posts Earnings Decline as Revenue Grows
February 21 2017 - 7:57AM
Dow Jones News
By Joshua Jamerson
Wal-Mart Stores Inc.'s profit fell 18% in the fourth quarter as
it continues to boost spending to thwart competition from online
retailers like Amazon, as revenue was boosted by e-commerce
sales.
Same-store sales in the U.S. rose 1.8% for the quarter, the 10th
straight quarterly increase, and foot traffic rose 1.4%. Meanwhile,
e-commerce sales were up 29%, boosted by the purchase of online
retailer Jet.com in September as well as online grocery.
Wal-Mart has been investing heavily -- in e-commerce as well as
driving investment into its stores -- to fend off Amazon.com Inc.'s
play for a bigger slice of the retail. The company has benefited
recently from improved store operations and lower prices, but after
rocky holiday-sales figures from Macy's Inc., Kohl's Corp. and
Target Corp., investors were watching to see if Wal-Mart fared
better than they did against Amazon.com Inc.
Wal-Mart also on Tuesday announced a 2% dividend increase to
$2.04 a share annually. The company's stock rose 2.2% to $70.90 in
premarket trading.
Over all for the period that ended in January, Wal-Mart reported
a profit of $3.76 billion, or $1.22 a share, compared with $4.57
billion, or $1.43 a share, in the year-ago quarter. Excluding
certain items Wal-Mart said it earned $1.30 a share.
Revenue rose 1% to $130.94 billion. Excluding currency headwinds
the company said revenue would've climbed to $133.6 billion.
Analysts, polled by Thomson Reuters, expected per-share earnings of
$1.29 on $131.22 billion in revenue.
Wal-Mart said operating, selling, general and administrative
expenses rose 3.7% in the fourth quarter. Cost of sales edged up
0.8%.
For its year that ends in January 2018, Wal-Mart expects to earn
between $4.20 and $4.40 Analysts, polled by Thomson Reuters,
expected $4.33 a share.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
February 21, 2017 07:42 ET (12:42 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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