Everyday Low Guidance: Walmart Serves Up Disappointing Forecast

And now Walmart serves up disappointing guidance.

The market didn’t need another reason to fret about the outlook for America’s mightiest corporate titans on Tuesday after Apple said it would likely miss revenue guidance on coronavirus effects.

But when it rains, it pours. Walmart on Tuesday morning said it sees 2021 EPS of $5 to $5.15, lower than the estimated $5.22. The range from analysts was $5.10 to $5.34.

I’m no retail analyst, that’s for sure, but just looking at the numbers versus consensus doesn’t paint a particularly inspiring picture.

For example, Q4 revenue looks a bit short, Walmart-only US comps ex-gas were up 1.9%, well shy of the +2.4% estimate from two-dozen analysts, and Sam’s US comps ex-gas were up 0.8% for the period, also lower than expected.

Comp guidance for 2021 (2.5%) seems like it’s a bit low too (as far as I can tell, consensus there is 2.7%, although admittedly, I’m not used to checking these numbers).

If you’re wondering whether the guidance includes any effects from the virus, the answer is no.

“The company continues to monitor the events in Chile and the Coronavirus outbreak and has not included any potential financial effects in its assumptions”, a statement reads.

A simple read is that there’s room for these numbers to deteriorate going forward, although that is pure speculation on my part.

The shares initially dropped around 2% in the pre-market, but subsequently recovered.

Morgan Stanley doesn’t sound worried. Q4 was “respectable”, the bank said. “[The outlook] seems fine”.