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BUSINESS A25
Wal-Mart’s 4 Q results test investor patience
A. D’INNOCENZIO
AP Retail Writer
NEW YORK (AP) — Wal-Mart
is spending billions of dol-
lars to pay its hourly work-
ers more and spruce up its
stores and online services.
But its fourth-quarter results Reusable shopping bags are offered for sale at a Wal-Mart Neighborhood Market, in the China-
show that it’ll take time to
fix its business.
The world’s largest retailer’s com, dollar stores and tra-
adjusted fourth-quarter
results beat Wall Street
estimates. But profit fell 8
percent as the company
faces higher costs.
Wal-Mart also reported a
revenue shortfall for the
quarter and lowered its
annual sales forecast be-
cause of the negative im-
pact of a strong U.S. dollar
and the company’s move
to close some stores glob-
ally. And even though
Wal-Mart reported its sixth
straight increase in sales
at established stores in the
U.S., that pace marked a
slowdown from the third-
quarter. Even online sales
have been losing steam.
During the fourth-quarter,
global e-commerce rose
8 percent, well below the
20 percent pace just a few
years ago.
The results sent Wal-Mart
shares down more than 4
percent.
“Overall, the results were
somewhat underwhelming,
and suggest the road to
improvement for Wal-Mart
is going be drawn out,”
Michael Lasser, analyst at
UBS, wrote in a report pub-
lished Thursday.
Wal-Mart faces pressure
Apple Pay e-payment launches in China
BEIJING (AP) — Apple Inc.
on Thursday launched its
smartphone-based pay-
ment system in China,
where the electronic pay-
ments market is already
dominated by an arm of e-
commerce giant Alibaba.
Apple said Apple Pay
could be used with cards
from 19 banks and “nu-
merous merchants.” The
merchants include super-
market Carrefour, fast food
outlets McDonald’s and
KFC, and convenience
store 7-Eleven, according
to a news release Wednes-
day from China UnionPay,
the country’s state-owned
on all fronts. Its low-income
shoppers remain cautious.
Wal-Mart also faces in-
creasing competition from
online leader Amazon.
town district of Los Angeles. On Thursday, Feb. 18, 2016, Wal-Mart reported financial results. 1.5 percent increase in the
ditional grocers like Kroger,
all of which are pushing
lower prices and conve-
nience.
Wal-Mart says shoppers are
benefiting from lower gas
prices, but it’s now battling
deflation in key areas like
meat and dairy products.
And delays in tax refund
checks from the U.S. Inter-
nal Revenue Service hurt-
business late in the fourth
quarter.
Wal-Mart is making lots of
credit card processor with
which Apple is working.
Apple’s electronic pay-
ment system started in
the United States in Oc-
tober 2014 and has since
spread to Britain, Canada
and Australia. Hong Kong,
Singapore and Spain are
coming this year.
Apple Pay is a late arrival in stores via Apple iPhones
a Chinese electronic pay-
ments market that offers
smartphone users not just
online shopping but also
the option to order taxis,
send money to friends, pay
bills and invest in wealth
management funds.
The market is dominated
changes that it says will
help it stay competitive in a
changing retail landscape.
It’s spending $2.7 billion on
higher wages and other
investments for its hourly
workers over a two-year
period.
It has also stepped up its in- of the company’s over-
vestment online and in the
stores. It’s better stocking
shelves and is improving
the fresh areas of its stores,
which are crucial to driving
traffic. And it’s expanding
online grocery shopping
to more than 150 locations
across more than 20 mar-
kets in the U.S.
But those moves have
squeezed profits. Annual
by Alipay, an arm of the e-
commerce giant Alibaba
Group. WeChat Payment,
operated by social net-
working and gaming com-
pany Tencent Holdings Ltd,
is also popular.
Apple’s system will allow
UnionPay cardholders to
make payments at retail
and Apple Watches. The
service also enables in-app
payments on iPhones and
iPads.
Apple has declined to say
how the company and
UnionPay would divide the
costs and revenues of their
venture.q
profits this year are expect-
ed to fall as much as 12
percent.
The company is also prun-
ing its global foot print.
Last month, Wal-Mart an-
nounced it was closing 269
stores, including 154 in the
U.S. The closings are part
all review of its operations
Friday 19 February 2016
to make it more nimble to
better compete with rivals.
Wal-Mart said revenue at
stores opened at least a
year for its Wal-Mart U.S.
division rose 0.6 percent,
its sixth straight increase,
but that pace slowed from
third quarter. Customer
counts are up for the fifth
straight quarterly period.
During the holiday season,
Wal-Mart made a concert-
ed effort to pull back on
temporary promotions and
focus on its “everyday low
prices,” its bedrock price
strategy.
“We are seeing momentum
in our Wal-Mart U.S. busi-
ness,” said Doug McMillon,
president and CEO of Wal-
Mart in a statement. But he
added, “We’ve still got a
lot of work to do.”
Wal-Mart, based in Ben-
tonville, Arkansas, earned
$4.57 billion, or $1.43 per
share in the three-month
period ended Jan. 31. That
compares with $4.97 billion,
or $1.53 per share, in the
year ago period.
On an adjusted basis, the
figure was $1.49, higher
than the $1.46 per share es-
timated by FactSet. q