Walmart Inc. (NYSE: WMT) earnings for the most recently reported quarter were fine. Its forecast for its fiscal year and the current quarter were weak, and the share price dropped almost 7%. That wiped out about $40 billion of its market cap.
24/7 Wall St. Key Points:
-
A weak forecast weighed on Walmart Inc. (NYSE WMT) shares.
-
The founder’s three richest children each lost over $6 billion on the news.
-
Take this quiz to see if you’re on track to retire. (sponsored)
Last quarter, Walmart revenue rose 4% to $178.9 billion, but per-share earnings dropped 4% to $0.65. Each figure was better than expected. However, the full-year forecast was for a 3% to 4% improvement at the top line. Management wrote, “Additionally, the Company’s guidance assumes a generally stable consumer and continued pressure from its mix of products and formats globally.” In other words, next year could be a tough one. “Wallets are still stretched,” CFO John David Rainey pointed out.
Each of founder Sam Walton’s three richest children lost over $6 billion yesterday on the news. Yet, according to the Bloomberg Billionaire Index, Jim, Robert, and Alice Walton are still worth about $119 billion each. The family still owns 45% of Walmart’s stock.
Sam Walton, who died in 1992, started Walmart in 1962. Today, it has over 10,000 locations worldwide and employs 2.1 million people. It is the largest employer in the United States, with 1.2 million workers, and America’s largest company based on revenue. Last year, the global revenue total was $650 billion.
The company claims that in the United States, where it has over 4,000 stores, 90% of the population lives within 10 miles of a Walmart location.
Walmart’s shares have been good to the family. They are up 145% in the past five years and 66% in the past year. Its current market cap is $785 billion.
Interestingly, Amazon.com Inc. (NASDAQ: AMZN) was supposed to put Walmart out of business. Two decades ago, many people viewed e-commerce as superior to brick-and-mortar retail. Amazon received the blame for the demise of Sears, Kmart, and J.C. Penney.
Walmart used its size, created its own e-commerce business, and built a model where people can order online and pick up at stores to compete with Amazon. (Amazon’s shares are up only 33% in the past year.)
You Won’t Believe These Eight Stores Secretly Offering Better Prices Than Walmart
Are You Still Paying With a Debit Card?
The average American spends $17,274 on debit cards a year, and it’s a HUGE mistake. First, debit cards don’t have the same fraud protections as credit cards. Once your money is gone, it’s gone. But more importantly you can actually get something back from this spending every time you swipe.
Issuers are handing out wild bonuses right now. With some you can earn up to 5% back on every purchase. That’s like getting a 5% discount on everything you buy!
Our top pick is kind of hard to imagine. Not only does it pay up to 5% back, it also includes a $200 cash back reward in the first six months, a 0% intro APR, and…. $0 annual fee. It’s quite literally free money for any one that uses a card regularly. Click here to learn more!
Flywheel Publishing has partnered with CardRatings to provide coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.