Wal-Mart (WMT) will give a half-million employees pay raises, the discount retail giant said Thursday as it announced a mixed quarterly earnings report.
Hourly workers will earn at least $1.75 above the current federal minimum wage, or $9 per hour, in April. By next February, it will rise to at least $10 per hour. Some jurisdictions already have a minimum wage at or above $9 per hour, including California, Connecticut, District of Columbia, Massachusetts, Oregon, Washington state, Vermont and Rhode Island.
"I think it actually is good news," Deutsche Bank analyst Paul Trussell said about the wage move. "Frankly part of Wal-Mart's problem has been concerns around inventories being out of stock, been about bad customer service, long lines at the checkout counters. There's been a lot of disgruntled workers, and frankly this does sound like the new CEO both of the U.S. Wal-Mart team and Doug McMillon at the helm taking a step to perhaps correct those past evils." A White House spokesperson called the news "another example of businesses along with cities and states taking action on their own to raise wages for their workers, recognizing that doing so can raise productivity, reduce turnover and improve morale." For the holiday quarter, the retailer delivered mixed results with earnings that beat estimates and revenue that fell short. It reported adjusted earnings of $1.61 per share, compared to $1.60 a share last year. Revenue rose to $131.57 billion from $129.71 billion a year ago. Analysts forecast Wal-Mart (WMT) would report earnings of $1.53 per share on revenue of $132.36 billion, according to a consensus estimate from Thomson Reuters. Wal-Mart stock was down more than 2 percent in morning trading. (Click here to track the latest price.) (WMT) Last quarter, Wal-Mart posted its first positive comp in its U.S. business in seven quarters, reflecting a consumer that remains pressured despite the recovering economy.
It continued the momentum during the fourth quarter, delivering a 1.2 percent rise in total U.S. comparable store sales.
The retail behemoth's same-store sales were expected to tick up just 0.7 percent including gas and a foreign exchange impact, according to an estimate from Consensus Metrix estimate.