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Wal-Mart On Pace For Worst Day In Years Amid Downbeat Forecast, $20 Billion Share Repurchase

Wal-Mart On Pace For Worst Day In Years Amid Downbeat Forecast, $20 Billion Share Repurchase
  • Wal-Mart shares are on pace for their worst one-day loss in 17 years.
  • The company announced a lowered EPS forecast and a $20 billion share repurchase program.
  • The retail sector and broader markets were also dropping.
  • Wal-Mart Stores, Inc. (NASDAQ: WMT) shares plummeted more than 8 percent Wednesday morning amid the company's 22nd annual meeting for the investment community.

    The retailer said it expects full year 2017 EPS to decline between 6 and 12 percent, but said it's looking at an increase between 5-10 percent in 2019 "compared to the prior year."

    CFO Charles Holley said, "Our sales growth over the next three years is estimated to range between 3 to 4 percent annually, which will add approximately $45 to $60 billion in sales. Within the last year, we have experienced traffic and comp sales improvements in our Walmart U.S. business, and our plan reflects that positive momentum continuing."

    Holley continued, "Fiscal year 2017 will represent our heaviest investment period. Operating income is expected to be impacted by approximately $1.5 billion from the second phase of our previously announced investments in wages and training as well as our commitment to further developing a seamless customer experience."

    Wal-Mart also announced a new $20 billion share repurchase program and "retired the $8.6 billion remaining on its 2013 authorization."

    As of 11:09 a.m. ET, shares were down 8.5 percent on the day to $61.01.

    Bespoke Investment Group tweeted that Wal-Mart is "Wal-Mart now on pace for biggest one-day decline since April 2000."

    Noted retail analyst Brian Sozzi was tweeting from the annual meeting and noted, "Wal-Mart CEO just said it's "evaluating its portfolio", suggests it may exit more markets/businesses."

    This drop caused a big shakedown in the retail sector. The SPDR S&P Retail (ETF) (NYSE: XRT) was down about 1 percent at $45.04. According to Benzinga Pro:

    • Costco Wholesale Corp (NASDAQ: COST) shares were down 1.29 percent to $150.03.
    • Dollar General Corp. (NYSE: DG) was down 2.68 percent to $66.18.
    • Sears Holdings Corp (NASDAQ: SHLD) was down 1.87 percent to $24.36.

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