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The Finance Corner, 7/9/23
"15 Signs Walmart Is Falling Apart Before Our Eyes"
"Walmart's empire is quietly disintegrating as the United States heads toward another recession. When you're the biggest retailer in the world, even a 1% decline in sales can result in billions of dollars in losses. However, profits are down nearly a quarter from a year ago, indicating that the big-box retailer's problems are much worse than anyone could have anticipated. Walmart was the business rivals dreaded most for decades, but recent data indicates that the retailer has been slipping behind. Walmart has started to lose consumer favor, and significant gaps are beginning to appear in its revenue stream. Because the issues it faces differ globally, the company has largely kept its financial struggles out of the news, allowing the superstore chain to go unnoticed in the big picture.
Worse news is released. It turns out that Walmart's issues are not as serious as its "profits." The retailer spent $3.8 billion in the most recent quarter rather than producing any cash from operations. Walmart's free cash flow for the third quarter was a depressingly negative $7.3 billion after accounting for capital expenditures of $3.5 billion. According to historical data provided by S&P Global Market Intelligence, the company hadn't had negative cash from operations since Q3 1995, more than 25 years ago.
Additional monetary losses for Walmart may be on the way Earnings have actually decreased over the last three quarters by an average of 4.5%, according to the IBD Stock Checkup. This falls far short of the investors' desired 25% growth. The retail chain's monthly sales have increased on average by 10% over the last three years. Its predicted 4% sales growth for the last quarter of 2022 appears so unimpressive because of this. In other words, investors currently consider Walmart stock to be a no-buy.
Both domestically and internationally, the traditional Walmart business model continues to show signs of weakness. Walmart may be crushed by e-commerce competitors and pushed into the same downward spiral that so many other retailers have experienced in recent years if the retail behemoth fails to adapt to changing market trends. Will the scene's largest retailer fall prey to the relentless retail apocalypse? That is still up in the air. However, the outlook isn't good right now, and the most recent earnings report was a disaster that caused significant losses just after the retail chain went on a really bad losing streak. In the end, a company's failure is merely a reflection of a failing economy, and the setbacks Walmart, American consumers, and our entire economy have already experienced are just the beginning.
When we read between the lines, as Motley Fool's Travis Hoium observed, we can quickly identify a company in serious trouble and speculate that it may be the "latest in a long line of leading retailers to go from boom to bust in the blink of an eye." Since Walmart's best days are behind it, we've gathered a number of figures, statistics, and facts to support this claim in the video above."
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