Stagnant Walmart Earnings Stretch Retail's Losing Streak
The biggest of all retail earnings reports failed to reverse a stream of negative news in the sector, with Walmart announcing a dip in revenue and profit. Total revenue was down 0.1%, to $114.8B, in the quarter that ended April 30 compared to the same period in the prior year. Analysts had expected $116.3B in revenue. Earnings per share slid to $1.03 from $1.10 in 2014. And operating income tumbled 8.3%, to $5.7B.
Walmart pegged declining income on its investments in employee wages. This was the company's first earnings report since it announced that 40% of its workforce would receive raises to levels above the federal minimum wage. The report also added to the seemingly endless refrain that US consumers simply refuse to put money saved on cheaper gas toward retail purchases and, for once, have used those savings to pay down debt. Retailers had hoped that after a brutal winter across much of the country that shoppers would belatedly return to the stores.
Maybe they drove to Home Depot, TJ Maxx and Marshall's instead of Walmart. Profit at Home Depot jumped 14%, to $1.6B, while TJX (the parent company of TJ Maxx and Marshall's) reported a 4.5% uptick, to $475 in profit.