Wal-Mart Stores Q3 Profit Tops Estimates; Updates FY16 Outlook

Ahead of Tuesday’s quarterly report, there is little reason to think shares of the world’s largest retailer are poised for a swift rebound.

Shares of Wal-Mart have gained 1% to $57 at 11:03 a.m. this morning. The company noted that the ongoing headwinds from currency will impact earnings per share by $0.16, compared to $0.15 from last quarter’s guidance. Third-quarter EPS from continuing operations benefited by approximately $0.04 from an adjustment for certain leases. In 3QFY14, the company reported $1.08 in EPS. Strong traffic and our fifth consecutive quarter of positive comps in Walmart USA stores show we are taking the right steps to win with customers. We expect a total sales inc. of 1.3%, as softness at Sam’s Club persists and FX pressures continue to weigh on the global segment’s top line…

Walmart CEO and president Doug McMillon commented: “We are pleased with the continued sales growth in Walmart USA and in our global business”. Although we still have work to do, we are positioning for sustainable growth through investments in people and technology to deliver a seamless shopping experience at scale. It previously projected annual earnings of $4.40-$4.70 per share.

Barclays cut their target price on shares of Wal-Mart Stores from $73.00 to $59.00 and set an “equal weight” rating on the stock in a research note on Thursday, October 15th. It seems that the company may have succeeded in resetting expectations.

Its shares edged up more than 2 percent in premarket trading Tuesday.