Walmart Stock Surges as Other Retailers Crumble
While the stocks of other retailers have struggled this year, Walmart shares have soared. Weak consumer spending has not damaged all national retailers.
This year will be considered the “Year of Walmart.” The stocks of other retailers have struggled as Walmart Inc. (NYSE: WMT | WMT Price Prediction) shares have jumped 77% higher. It is a testament to its size, novel services, and clever senior management.
Leader of the Pack
So far this year, the shares of other large retailers have fallen. This included Target, Albertson’s, Walgreens, Dollar Tree, and Kohl’s. Target Corp. (NYSE: TGT) is an example of the industry’s troubles, despite its position as the number two big-box retailer beyond Walmart. Its revenue barely budged, up 1.1% to $26.7 billion, in the most recently reported quarter. Net income cratered 12% to $854 million. Its guidance worried investors even more. It forecast a lackluster holiday season. Its stock is down 7% this year, while the S&P 500 is 25% higher.
Kohl’s Corp. (NYSE: KSS) stock dropped 21% when it announced its most recent earnings and is now down nearly 50% for the year. It said net sales will be down as much as 7% for its fiscal year, which ends in January. That reflects pessimism about the holiday season. In its most recent quarter, revenue dropped almost 9% to $3.5 billion. Earnings fell from $0.52 per share in the same quarter a year ago to $0.20.
It would be easy to say that weak consumer spending damaged all national retailers. However, given Walmart’s size, that case is hard to make. In the most recent quarter, revenue rose almost 6% to $170 billion. Adjusted per-share earnings rose 14% to $.58. U.S. revenue rose 5% to $115 billion. Operating income for the region was higher by 9% to $5.4 billion.
Walmart is a good proxy for consumers nationwide. Ninety percent of the U.S. population lives within 10 miles of a Walmart store. It has over 4,700 locations in America. And its global e-commerce revenue was up 27%. To a large extent, this is because of the ability to order online and pick up items at stores.
Walmart’s stock is up so much that, despite its size, it is swimming against the tide.
The Retail Rollercoaster: Winners, Losers, and the Economic Red Flag
Contact [email protected] for any questions or corrections.
Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
