Wal-Mart Stores, Inc. (WMT): Pressure Mounts Following The Stock Drop

walmartDiane Alter:  The Wal-Mart Stores, Inc. (NYSE:WMT) stock drop continued this morning (Thursday) as shares dipped another 1% to a 52-week low of $59.30.

That followed a punishing 10% Wal-Mart stock drop Wednesday amid growth and profit warnings for the next several years.

After falling as much as 12% intraday Wednesday,Wal-Mart Stores Inc. (NYSE: WMT) ended the session down 10% to $60.03. The company said growth over the next three years would be a lackluster 3% to 4%, sending shares lower. The company also said profit could drop up to 12% in its next fiscal year.

Wal-Mart leaders also said they expect sales growth for the current fiscal year (ending Jan. 31) to be relatively flat.

The Wal-Mart stock drop Wednesday was the sharpest decline for WMT stock in 25 years, according toReuters.

Shares are now down 30.1% year to date.

The Wal-Mart stock drop led to $21.5 billion in market cap being wiped out in one day. In 2015, the company has lost a total of $83 billion off its market cap.

And unfortunately for investors, the yearlong WMT stock drop may not be over…

Pressure Mounts Following Wal-Mart Stock Drop

Wal-Mart employs 2.2 million people globally. It is one of the largest private employers in the United States and Canada. In the U.S. alone Wal-Mart employs some 1.4 million people.

And that’s starting to have a huge impact on the company’s bottom line…

In April, the company raised the minimum hourly wage it pays employees to $9. In February, that will rise to $10 for most associates. The higher pay will add $1.2 billion in costs this year and another $1.5 billion in 2016, Wal-Mart detailed.

And wages aren’t the only drag on Wal-Mart’s profits…

The retailing behemoth is spending heavily to improve its spacious 11,500 brick and mortar stores across 28 countries. It’s also shelling out piles of cash to boost its online presence.

Wal-Mart said it is also expanding curbside pickup for groceries ordered online to 10 new markets, bringing the total to 23. It will add 20 more markets next year, escalating a service it believes will be a key driver of growth.

It’s also a service its chief rival Amazon.com Inc. (Nasdaq: AMZN) doesn’t offer.

Amazon surpassed Wal-Mart as the world’s biggest retailer on July 24 after the e-commerce giant reported a surprise jump in profit in the second quarter. Amazon reported income of $92 million, or $0.19 a share, in the three months ended June 30.

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