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    1 Response to "A Retail Giant Positioning for Future Profit Growth"

    • John
      August 21, 2015

      As the popularity of online shopping grows, the perception of Amazon’s threat to Wal-Mart grows too… and so does the perception of Wal-Mart’s threat to Amazon.

      Impact of labor cost increase announced by WMT last February to WMT’s bottom line…Announced $1B spend for FY or about $660 million after tax (~$0.20/shr). At $166B IC, that equates to about a 0.4% drop in ROIC. Still keeps them above DG, even if DG makes no similar cost increase.

      However, if you look at the ROICs of some of the retailers (HD/TGT/KR), they are in an uptrend (they’re finding their way in an improving US economy) whereas WMT is still working on it. Still, agree WMT a good value proposition if they can get that comp sales trending a little stronger…but then again that’s maybe why they can be bought on the cheap now with the risk being when they can strengthen that trend.

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