Wal-Mart Stores, Inc. WMT came out with worse than expected quarterly results on Tuesday morning. The company missed Wall Street’s expectations on both the top-line and bottom-line. While analysts were expecting EPS of $1.05 on revenue of $116.23 billion, the company declared EPS of $1.03 on revenue of $114.88 billion.
Budd Bugatch from Raymond James was on CNBC post the results to discuss why Wal-Mart’s earnings are not as bad as they seem when currency headwinds are taken into account.
FX Impacted Significantly
“I think the Wal-Mart numbers were impacted significantly by FX,” Bugatch said. “That was about $0.03 in the quarter and I think $0.02 from the wage and training impact and also $0.02 from their e-commerce investments, so, about $0.07 there."
He continued, “I think without FX and those items that would have beaten on both the top-line and the bottom-line. We also have a lot of other moving parts for Wal-Mart and Wal-Mart International and that was a little bit of a challenge also on the FX line and I think Sam’s Club was a disappointment in the quarter.”
Positive Comps
Bugatch was asked if he is happy with the 1.1 percent growth in same store sales that Wal-mart posted. He replied, “Well we are never happy…we don’t get overly excited about it, Wal-Mart is a very big, big business.1.1 percent is in fact the third consecutive quarter of positive comps and they did have positive traffic.”
He continued, “Also neighborhood market was up, I think, the comp will prove out to be there about 7.9 percent in neighborhood market and even in the mature neighborhood market stores were positive.”
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