NEW YORK: Walmart Stores reported an 8 percent decline in fourth-quarter earnings as the world’s largest retailer prunes its global footprint.
The adjusted results beat analysts’ expectations, but shares fell 4 percent in premarket trading as Walmart posted a revenue shortfall for the quarter and lowered its annual sale forecast for the year.
The retailer now says that total revenue will be unchanged compared with an earlier forecast for a three to four percent increase.
Walmart results come as it faces pressure on all fronts. Its low-income shoppers remain cautious in a still recovering economy. Even lower gas prices haven’t made shoppers splurge — they’re either using the windfall to save more or to pay down debt.
Walmart Stores Inc. is also facing increasing competition from the likes of online leader Amazon.com, dollar stores and traditional grocers like Kroger, which are pushing lower prices.
To stay competitive, Walmart is spending $2.7 billion to raise wages of its hourly workers over a two-year period and has stepped up its investment online and in the stores. But those moves have squeezed profits.
The company is also pruning its global foot print. Last month, Walmart announced it was closing 269 stores, including 154 in the US that includes all of its locations under its smallest-format concept store called Walmart Express. The other big chunk is in its challenging Brazilian market.
The closings are part of the company’s overall review of its operations to make it more nimble to better compete with rivals.
At its US stores, the company has been working to better stock its shelves and it has said that customer experience is better. That helped improve sales and traffic.
Walmart said that revenue at stores opened at least a year rose 0.6 percent, its sixth straight increase. And customer counts are up for the fifth straight quarterly period.
“We are seeing momentum in our Walmart US business,” said Doug McMillon, president and CEO of Walmart in a statement. But he added, “We’ve still got a lot of work to do.”
Walmart, based in Bentonville, Arkansas, earned $4.57 billion, or $1.43 per share in the three-month period ended Jan. 31. That compares with $4.97 billion, or $1.53 per share, in the year ago period.
On an adjusted basis, the figure was $1.49, higher than the $1.46 per share estimated by FactSet.
The company’s revenue of $128.6 billion is short of the $130.5 billion that Wall Street was looking for, according to FactSet, and shares tumbled 5 percent before the opening bell.
Wal-Mart says it earned $4.57 billion, or $1.43 per share in the three-month period ended Jan. 31. That compares with $4.97 billion, or $1.53 per share, in the year ago period.
On an adjusted basis, the figure was $1.49, higher than the $1.46 per share estimated by FactSet.
Net revenue was $128.6 billion. That’s slightly lower than the expected $130.5 billion, according to FactSet.
Shares fell $2.63, or 4 percent, to $63.48 in premarket trading about an hour before the market open.
Shares have been up around 8 percent so far this year, after falling nearly 30 percent last year.
Walmart’s adjusted Q4 profits beat Wall Street estimates
Walmart’s adjusted Q4 profits beat Wall Street estimates
India and US release a framework for an interim trade agreement to reduce Trump tariffs
- Under the deal, tariffs on goods from India would be lowered to 18 percent, from 25 percent, after Indian Prime Minister Narendra Modi agreed to stop buying Russian oil, Trump had said.
NEW DELHI: India and the United States released a framework for an interim trade agreement to lower tariffs on Indian goods, which Indian opposition accused of favoring Washington.
The joint statement, released Friday, came after US President Donald Trump announced his plan last week to reduce import tariffs on the South Asian country, six months after imposing steep taxes to press New Delhi to cut its reliance on cheap Russian crude.
Under the deal, tariffs on goods from India would be lowered to 18 percent, from 25 percent, after Indian Prime Minister Narendra Modi agreed to stop buying Russian oil, Trump had said.
The two countries called the agreement “reciprocal and mutually beneficial” and expressed commitment to work toward a broader trade deal that “will include additional market access commitments and support more resilient supply chains.” The framework said that more negotiations will be needed to formalize the agreement.
India would also “eliminate or reduce tariffs” on all US industrial goods and a wide range of food and agricultural products, Friday’s statement said.
The US president had said that India would start to reduce its import taxes on US goods to zero and buy $500 billion worth of American products over five years, part of the Trump administration’s bid to seek greater market access and zero tariffs on almost all American exports.
Trump also signed an executive order on Friday to revoke a separate 25 percent tariff on Indian goods he imposed last year.
Indian Prime Minister Narendra Modi thanked Trump “for his personal commitment to robust ties.”
“This framework reflects the growing depth, trust and dynamism of our partnership,” Modi said on social media, adding it will “further deepen investment and technology partnerships between us.”
India’s opposition political parties have largely criticized the deal, saying it heavily favors the US and negatively impacts sensitive sectors such as agriculture. In the past, New Delhi had opposed tariffs on sectors such as agriculture and dairy, which employ the bulk of the country’s population.
Meanwhile, Piyush Goyal, Indian Trade Minister, said the deal protects “sensitive agricultural and dairy products” including maize, wheat, rice, ethanol, tobacco, and some vegetables.
“This (agreement) will open a $30 trillion market for Indian exporters,” Goyal said in a social media post, referring to the US annual GDP. He said the increase in exports was likely to create hundreds of thousands of new job opportunities.
Goyal also said tariffs will go down to zero on a wide range of Indian goods exported to the US, including generic pharmaceuticals, gems and diamonds, and aircraft parts, further enhancing the country’s export competitiveness.
India and the European Union recently reached a free trade agreement that could affect as many as 2 billion people after nearly two decades of negotiations. That deal would enable free trade on almost all goods between the EU’s 27 members and India, covering everything from textiles to medicines, and bringing down high import taxes for European wine and cars.
India also signed a comprehensive economic partnership agreement with Oman in December and concluded talks for a free trade deal with New Zealand.
