Pre-earnings report: What to expect from Walmart in fiscal 4Q16
Walmart (WMT), the world’s largest retailer, is scheduled to report its results for fiscal 4Q16 and fiscal 2016 on February 18. It’s been a mixed year for Walmart. The company’s US segments have benefited from positive US economic trends since the United States is Walmart’s largest market. However, currency factors and economic growth concerns in some of its biggest overseas markets have taken their toll on the company’s revenue and earnings.
Walmart also stepped up its digital growth investments, which are expected to affect its earnings in the near term. To cap off the year, Walmart announced 269 store closures last month, including some in the United States. These closures are expected to impact the retailer’s (XRT) results in fiscal 2016. We’ll analyze these factors in greater detail in this series.
How are rivals doing?
International headwinds have been less of an issue for rivals Kroger (KR), Target (TGT), and Costco (COST). TGT and KR operate stores only in the United States while Costco has significantly lower overseas exposure than Walmart. Currency headwinds notwithstanding, Costco’s international operations are a key growth driver for the world’s second-largest retailer.
Target and Kroger are scheduled to report their fiscal 2016 results on February 24 and March 3, respectively. Costco is slated to release its fiscal 2Q16 results on March 2.
Walmart, Costco, and Kroger together constitute 11.9% of the Consumer Staples Select Sector SPDR Fund (XLP). The three stocks are also S&P 500 Index components, making up 1.2% of the SPDR S&P 500 ETF (SPY).
Let’s take a quick look at Walmart’s performance in the first three quarters of fiscal 2016 in the next part of this series.