Wal-Mart Stores, Inc. is closing 269 stores worldwide after thoroughly reviewing the performance of its 11,600 stores worldwide. The 269 stores only represent nearly one percent of both Wal-Mart’s global square footage and revenue.
Wal-Mart CEO Doug McMillon expressed, “Actively managing our portfolio of assets is essential to maintaining a healthy business… Closing stores is never an easy decision, but it is necessary to keep the company strong and positioned for the future. It’s important to remember that we’ll open more than 300 stores around the world next year. So we are committed to growing, but we are being disciplined about growing.”
Presently, there are 4,500 Wal-Mart stores in the USA, 154 of which are to be closed. 102 of these stores are Wal-Mart Express branches, the smallest format store that was launched in 2011. 23 Neighborhood Markets, 12 Supercenters, 6 Discount Centers, and 4 Sam’s Clubs are being shut down in the USA.
With the move, about 16,000 Wal-Mart employees will be affected, 10,000 of whom are situated in the USA. However, Wal-Mart seeks to transfer most of these workers to other store locations. Stores in Anson, Haskell, Merkel, and Winters will all be put down.
On the other hand, Wal-Mart hopes to open about 200 stores outside the USA. Moreover, it hopes to have opened nearly 170 stores in the USA by early 2017. On Friday, the company’s stock declined 1.79 percent or 1.13 points, ending the session at $61.55. During the session, Wal-Mart hit an intraday high of $62.47 and an intraday low of $61.26.
Wal-Mart is down by 2.53 percent on a weekly basis, by 5.23 percent on a monthly basis, and by 28.64 percent on a 12-month basis. However, over the past three months, the retail company is up by 5.26 percent. Its year-to-date stock performance is at 1.03 percent. Wal-Mart has underperformed the S&P 500 by 0.37 percent over the week, but has outperformed it by 12.24 percent over the past month.
The company has a current market cap of $198.29 million and a price to earnings (P/E) ratio of 13.26. Wal-Mart has a 12-month high of $90.97, which was recorded on January 13, 2015, and a 12-month low of $56.30, which was recorded on November 13, 2015. It has a 50-day moving average price of $60.87 and a 200-day moving average price of $64.46.
Several research firms evaluated Wal-Mart’s stock performance. Barclays gave it a rating of ‘equal weight’ and a target price of $61, while Macquarie gave it a rating of ‘neutral’ and a target price of $67. On the other hand, Morgan Stanley gave it a rating of ‘equal weight’ and set a target price of $68 and Deutsche Bank gave it a rating of ‘hold’ and a target price of $70. Meanwhile, Vetr gave it a rating of ‘strong buy’ and a target price of $71.64, while Bank of America (BOA) gave it a rating of ‘outperform’. MKM Partners gave the stock a rating of ‘hold’.
Currently, Wal-Mart has an average rating of ‘hold’ and a consensus target price of $65.15.