Shares of Wal-Mart Stores Inc. (WMT) reached a 52-week high of $81.00 on Nov 27, after the supermarket chain announced several lucrative offers and discounts for the holiday season last week. These promotional efforts are expected to provide a boost to the top line, which has been sluggish since the past few quarters.
Shares of this giant retailer eventually closed at $80.93, reflecting a year-to-date return of 16.88%. The company’s long-term estimated earnings per share growth rate is 9.0%. Average volume of shares traded over the last three months came in at approximately 6,059K.
As the holiday season from Thanksgiving Day to Christmas has six fewer days compared to the previous year, retailers are gearing up their sales offering to make up for the shortened shopping period. Wal-Mart started a pre-Black Friday savings event in stores and online from Nov 22, a week ahead of the traditional start.
Einhorn’s FOF Re-positions Portfolio, Makes New Seed Investment In Year Marked By “Speculative Exuberance”
It has not just been rough year for David Einhorn's own fund. Einhorn's Greenlight Masters fund of hedge funds was down 3% net for the first half of 2020, matching the S&P 500's return for those six months. In his August letter to investors, which was reviewed by ValueWalk, the Greenlight Masters team noted that Read More
In order to remain competitive in this tough retail environment, Wal-Mart extended its Christmas Ad Match to its online customers, which was earlier offered only in its stores. Under this offer, Wal-Mart agrees to give a gift card to its store and online customers if they find a cheaper price at a competitor’s store. The offer is valid for items purchased between Nov 1 and Dec 24, excluding Thanksgiving Day (Nov 28) and Black Friday (Nov 29).
Wal-mart also opened its stores three hours earlier than previous year at 6:00 pm on Thanksgiving Day. The supermarket chain offered wristbands or tickets to shoppers to reserve popular items like Beats headphones and H-Plaptops.
It also announced that it will guarantee 21 of its doorbuster items, which is seven times greater than the items guaranteed last year. By guaranteeing a doorbuster item, Wal-Mart ensures its shoppers that if they cannot buy these goods during the Black Friday store hours, they’ll receive it by Christmas at the latest.
Sam’s Club, a leading membership warehouse club and a division of Wal-Mart, announced the extension of holiday savings a week beyond Cyber Monday with exclusive values and free shipping to its online customers from Nov 30 through Dec 8.
As the National Retail Federation cautioned that consumers tighten their spending budget this year due to the ongoing macroeconomic headwinds, retailers are working hard to get people to spend by bigger-than-life advertising. Although this aggressive advertsing/promotion may pressurize margins they could lead to high sales during the holiday season.
Earlier this month, Wal-Mart announced third-quarter fiscal 2014 results. The consumer giant beat the Zacks Consensus Estimate for earnings but missed the same for revenues due to a gloomy consumer spending environment globally. Walmart also narrowed its earnings expectations for the fiscal year 2014. The latest move by Walmart to kick off its holiday shopping season is expected to prove beneficial for the company.
Other Stocks to Consider
Wal-mart carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the retail sector include Harris Teeter Inc. (ABTL), Marks & Spencer Inc. (MAKSY) and Kroger Company (DSW). All these stocks carry a Zacks Rank #2 (Buy).