NEW YORK: Wal-Mart is facing tough competition on multiple fronts, from the quick expansion of online leader Amazon.com to a stronger dollar, which has been eating into its international sales.
On Wednesday, the company’s share value fell more than 10 percent, the worst one-day decline in 25 years since it was listed. Analysts the biggest challenge for Wal-Mart is that more consumers are choosing to buy online. That’s why Wal-Mart decided to take several moves in the following years to recover lost territories with e-commerce companies.
These moves include raising wages, cutting prices and a US$20 billion share buyback. Wal-Mart Chief Executive Doug McMillon was trying to convince investors that the company will regain its steam within a few years.
Under these moves, Wal-Mart forecast its earnings per share would drop to US$4.4 to US$4.7, while 2017’s EPS would continue to drop by 6 to 12 percent. But it added that the company’s EPS would likely grow 5 to 10 percent in the fiscal year ending January 2019.
