Talking Numbers

Wal-Mart's warning to the world

Talking Numbers

Wal-Mart's warning to the world

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Wal-Mart's warning to the world

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Are Wal-Mart's mixed earnings data a warning to the world?

The largest retail company on earth reported lower-than-expected revenues of $129.7 billion for its most recent quarter while its $1.60 per share earnings were at the bottom of it previous guidance's range. Same-store sales in the US were down 0.4%.

Wal-Mart also guided down expectations for 2014, saying it foresees this year's earnings as coming in between $5.10 and $5.45 per share versus Wall Street's previous estimate of $5.54 per share.

The company gave a few reasons for its results, including bad weather and reduced government assistance in the United States and store closings in India and Brazil. Foreign currency losses cost Wal-Mart an incredible $5.1 billion in the last quarter.  It also says higher taxes, higher health care costs, and tighter credit will also bit into its numbers this year.

(Read: Wal-Mart forecast disappoints as grocery business struggles)

CNBC contributor Gina Sanchez, founder of Chantico Global, Wal-Mart's quarterly data is saying something about the economy as a whole.

"Obviously, it's troubling that Wal-Mart showed weaker earnings and sales than they did post-[2008]," says Sanchez. "But, that's not surprising considering wages haven't really grown and it's going to affect the lower-end consumer far, far more."

Wal-Mart also has internal issues to contend with as well, according to Sanchez. "I'm not very excited about Wal-Mart," she says. "I think it's a difficult story right now. But, on the whole, I do think it's a little bit troubling for the economy and I think that we have to watch this."

Difficulties for the global consumer on the low-end are weighing on Wal-Mart's numbers, according to CNBC contributor Andrew Bush, editor and publisher of The Busch Update.

(Read: Wal-Mart's China syndrome a symptom of international woes)

"Wal-Mart's a good indication of the problem of income inequality not only in the United States but globally," says Busch, who predicts Wal-Mart will eventually support a higher minimum wage in the US. "That's some of the problems that are going on in the emerging markets."

Busch also has a dim outlook for Wal-Mart based on the stock's technicals. After bottoming out at around $49 in the summer of 2011, the stock moved along an uptrend line which broke in April 2013, according to Busch's charts. He sees the stock currently in a $12-wide slight uptrend channel. But, the bottom of that channel is roughly $71.80 per share, near where the stock was trading as of Friday.

"Overall, you're trending toward the bottom-end of that channel," says Busch. "I would sell Wal-Mart because of these issues that they have if you get a weekly close below $72."

"Watch these guys. Again, they're being hurt just as much as their consumers are being hurt … because their wages aren't really rising."

To see the rest of the discussion on Wal-Mart with Sanchez on the fundamentals and Busch on the technicals, watch the video above.

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