Earnings Watch: Wal-Mart Reports Q4 After Announcing Plans To Close 269 Stores

Wal-Mart Stores (WMT) is scheduled to report fourth quarter earnings before the market open on Thursday, February 18, with a conference call scheduled for 7:00 am ET. Wal-Mart, a member of the Dow Jones Industrial Average, operates retail stores in various formats under 69 different banners in 27 countries with its “everyday low price” philosophy.

EXPECTATIONS: Analysts are looking for earnings per share of $1.43 on revenue of $130.65B, according to First Call. The consensus range for EPS is $1.20-$1.51 on revenue of $127.05B-$133.71B. In its last earnings report, Wal-Mart forecast Q4 EPS of $1.40-$1.55 with Q4 same store sales growth of about 1%.

LAST QUARTER: Wal-Mart reported third quarter EPS of $1.03, beating analysts’ estimate of 98c, on revenue of $117.41B, narrowly missing analysts’ estimate of $117.79B. The company said currency negatively impacted EPS by approximately 4c. Comp sales at Walmart U.S. increased 1.5%, driven by traffic of 1.7%, and Neighborhood Market comps increased approximately 8%. E-commerce sales and GMV globally increased approximately 10% on a constant currency basis, the company said. Looking ahead, Wal-Mart narrowed its fiscal year 2016 EPS view to $4.50-$4.65 from $4.40-$4.70 against estimates at that time for $4.51 and said it expected “relatively flat” total sales growth for the year.

NEWS: During the quarter, Wal-Mart said it would close 269 stores in the U.S. and globally, including all 102 of its Walmart Express stores. Of the closures, 154 locations will shutter in the U.S. and 115 outside the U.S. The action follows a review of Walmart’s nearly 11,600 worldwide stores that took into account a number of factors, including financial performance as well as strategic alignment with long-term plans. In total, the company said that the impacted stores represent less than 1% of both global square footage and revenue. About 16,000 associates will be impacted by the decision, about 10,000 of them in the U.S. Wal-Mart said in January that over 1.2M Walmart U.S. and Sam’s Club associates will receive a pay increase under the second phase of the company’s two-year, $2.7B investment in workers, effective February 20. When these changes go into effect, Walmart’s average full-time hourly wage will be $13.38/hour, the company said. In December, Bloomberg said Wal-Mart appointed Tony Rogers as its U.S. Chief Marketing Officer to replace Stephen Quinn.