Wal-Mart (WMT) Stock Retreats Ahead of Quarterly Earnings Report
NEW YORK (TheStreet) -- Wal-Mart Stores (WMT) - Get Report shares are decreasing 0.3% to $56.78 on Friday ahead of the retail giant's third quarter fiscal 2016 earnings results due out on Tuesday before the market opens.
Both profits and sales are projected to fall year-over-year.
For the latest quarter, analysts are expecting the company to earn 98 cents a share on revenue of $117.79 billion.
In the same period a year ago, the company earned $1.15 a share on revenue of $119 million.
Additionally, the company announced new Black Friday shopping strategies. Instead of making the event last over five days like it did last year, Wal-Mart is offering all the discounts and deals at one time.
Online deals will be offered at 3:01 a.m. Eastern time on Thanksgiving. Then at 6 p.m. Eastern time on that same day, deals will be offered in stores.
Based in Bentonville, AR, Wal-Mart operates retail stores in various formats worldwide. The company operates through three segments: Walmart U.S., Walmart Int'l., and Sam¿s Club.
Separately, TheStreet Ratings team rates WAL-MART STORES INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
We rate WAL-MART STORES INC (WMT) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and weak operating cash flow.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- WMT's revenue growth has slightly outpaced the industry average of 3.5%. Since the same quarter one year prior, revenues slightly increased by 0.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.62, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.17 is very weak and demonstrates a lack of ability to pay short-term obligations.
- Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, WMT has underperformed the S&P 500 Index, declining 24.57% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The change in net income from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Food & Staples Retailing industry average. The net income has decreased by 15.1% when compared to the same quarter one year ago, dropping from $4,093.00 million to $3,475.00 million.
- You can view the full analysis from the report here: WMT