|Bid||199.50 x 1200|
|Ask||201.44 x 2200|
|Day's Range||199.09 - 201.34|
|52 Week Range||150.00 - 201.35|
|PE Ratio (TTM)||29.75|
|Earnings Date||May 31, 2018|
|Forward Dividend & Yield||2.28 (1.14%)|
|1y Target Est||210.13|
Sales at Walmart’s (WMT) Sam’s Club fell 4.1% (ex-fuel) to $12.4 billion. The closure of 63 Sam’s Clubs and the decision to remove tobacco from certain clubs negatively impacted the top line for Sam’s Club. However, comps remained strong and grew 3.8%, reflecting strong traffic in the fresh category. The club pickup and the direct-to-home business continued to drive sales and premium membership rates. E-commerce sales improved 25.0% during the first quarter.
It spent nearly two years carving support at the 200-day exponential moving average (EMA) in the $30s, finally turning higher in November 2017, and has now posted a higher low at the 50-day EMA. This bullish action sets the stage for testing at major resistance between $49 and $52. Rallies failed at the bottom of that resistance zone in 2015, 2016 and January 2018, so bears are likely to force another reversal, using weakness near the round number $50 and the 2015 high at $51.25 to reload positions.
Walmart’s (WMT) US business sustained its sales momentum in the first quarter and reported healthy growth. Including the first quarter, Walmart’s US business has now recorded 15 consecutive quarters wherein comps marked a YoY (year-over-year) improvement. During fiscal Q1 2019, Walmart’s US segment sales increased 3.1% to $77.7 billion, reflecting a 2.1% increase in comps.
Walmart (WMT) reported net sales of $122.7 billion in fiscal Q1 2019, which exceeded analysts’ expectations of $120.5 billion and increased 4.4% YoY (year-over-year). Continued strength in its US business and healthy sales in the international segment drove the top-line growth in the first quarter. Walmart’s value pricing and acceleration in e-commerce sales continue to support its top line.
Walmart’s (WMT) e-commerce sales were the key catalyst behind its stellar stock performance in 2017, which is why investors dumped Walmart stock soon after the company reported a deceleration in its digital sales in fiscal Q4 2018. Walmart’s e-commerce sales jumped 33.0% in fiscal Q1 2019, reflecting strong sequential growth. Walmart stood by its earlier guidance and expects its e-commerce business to record 40.0% growth in fiscal 2019.
Walmart (WMT) sustained the growth momentum in its EPS and reported better-than-expected bottom-line results. Walmart’s first quarter adjusted EPS of $1.14 came in ahead of analyst expectations of $1.12 and saw YoY (year-over-year) growth of 14.0%. The graph below shows that Walmart exceeded analysts’ expectations in the past five quarters despite significant pressure on profitability from investments in growth initiatives.
Walmart (WMT) reported better-than-expected fiscal Q1 2019 results (the quarter ended April 30, 2018) on May 17. Walmart’s top-line and bottom-line results came in ahead of analysts’ expectations and saw YoY (year-over-year) improvement. The company saw continued strength in its US business, its largest business segment by sales and profitability.
Costco Wholesale Corporation (NASDAQ:COST) is known for the kind of price cuts consumers love to shop for. Now and with COST stock breaking out to fresh all-time highs, that narrative of fear has been replaced by more cheerful sales data pointing to a company not so easily torpedoed by Amazon’s ever-growing reach and dominant market position. Will the good times for Costco investors continue?
Ahead of today's trading session, WallStEquities.com scans Big Lots Inc. (NYSE: BIG), Burlington Stores Inc. (NYSE: BURL), Costco Wholesale Corp. (NASDAQ: COST), and Dollar General Corp. (NYSE: DG). On Thursday, shares in Columbus, Ohio headquartered Big Lots Inc. recorded a trading volume of 897,235 shares.
Also today is the trade summit in Washington, led by China Vice Premier Liu He and Treasury Secretary Mnuchin, as they look for an agreement over tariffs. TheStreet's Jim Cramer asks: "Is there any value to a homebuilder in a rising rate environment? It's almost as if it is one-for-one, every 100 basis points rise in the ten year's interest rate is a couple of percentage point fall in the stock prices of these companies," says Cramer.
Rising U.S. gasoline prices and rising interest rates seem poised to sap consumer disposable income, meaning that many Americans will soon have to look for ways to stretch their budgets. The company has also been gaining consumer wallet share in a big way over the past several months. For example, same-store sales rose 7.9% year over year during April alone (excluding the impact of foreign exchange and rising gas prices).
Target (TGT) is set to announce its fiscal first-quarter earnings on May 23. Analysts expect Target’s adjusted earnings to return to growth and register an increase of 14.9% on a YoY basis. Notably, Target registered a YoY decline in its EPS in the past several quarters, as you can see in the following graph.
As we discussed previously, mass merchandisers’ margins remained subdued due to their investments in growth measures. Target (TGT), Walmart (WMT), and Costco (COST) saw their margins decline. Investments in price to drive shoppers and costs associated with digital fulfillment are taking a toll on companies’ profitability.
Along with fast delivery and convenient shopping, another key advantage that Amazon (AMZN) holds over retailers is its low pricing. Amazon’s pricing advantage and scale have put many small retailers out of business. Large retailers are forced to invest in the price to drive traffic and stay relevant with consumers.
Shares of wholesale retailer Costco Wholesale Corporation (NASDAQ:COST), too, saw a nice lift on Wednesday — one that now has it flirting with a breakout on its charts. Active investors and traders could look to trade COST stock higher if it can overcome this well-defined line on the charts. As such, it is crucial to be aware when major retailers report their earnings reports as well as when the retail sales numbers for the group hits the news wires.
"It's hard not to own Amazon if you want exposure to retail," Randy Hare, director of equity research at Huntington Private Bank, tells Barron's, "but the benefit of owning it is greater than its retail [operations]." He cites Amazon Web Services, its cloud division, along with advertising, fast-growing parts of its business that "help fuel the pressure it can put on other retailers." The biggest worry for the stock is from Washington, but Hare doesn't see anything happening on that front near term. The move also provides some insulation if there are any pricing concerns with the post office or other transportation partners "who it does work well with." In addition, Hare notes that Amazon's willing to collect tax on third-party sales, and already collects sales tax on its own items in all 45 states that require it.
Target (TGT) has been witnessing an improving sales trend, which has led analysts to raise their target prices on the stock (see the graph below). Also, Target’s exclusive brand launches, store remodeling, and value pricing bode well with consumers and are expected to drive its sales in the coming quarters. Analysts are maintaining a price target of $75.87 on the stock, which represents an upside of 4.1% to its closing price of $72.90 on May 14.
A rough stretch for Walmart Inc (NYSE:WMT) has turned worse of late. A 3%+ drop following last week’s announcement that the company had acquired Indian e-commerce provider Flipkart sent Walmart stock to a seven-month low. The driver of the decline, which has almost totally wiped out a 40% run in Walmart stock that started last October, has been weakening sentiment toward the company’s e-commerce business.
Last week’s developments with Walmart Inc (NYSE:WMT) and Flipkart offer a large and tangible demonstration of an important point as we evaluate retail stocks in 2018. Walmart stock dropped almost 5% last Wednesday following news that it would be taking a majority stake in India’s Flipkart. Amazon.com, Inc. (NASDAQ:AMZN) was also said to be interested in bidding for a large stake in the company. Walmart is currently present in India with its Best Price stores.
Target (TGT) is expected to announce its fiscal 1Q18 results on Wednesday, May 23. Target’s top line is expected to benefit from its merchandising initiatives, including the launch of exclusive Only-at-Target brands. Store remodeling and value pricing should further support sales growth.
Here’s a quick wrap up of other headlines making news today.
Starbucks has big plans for China. Yahoo Finance’s Alexis Christoforous, Melody Hahm, and Ethan Wolff-Mann discuss how the company will market coffee to a tea-loving country.