Wal-Mart Stores Inc. fell the most in more than 15 years after predicting that profit will tumble during the next fiscal year.
Earnings will decrease 6 percent to 12 percent in fiscal 2017, which ends in January of that year, the Bentonville, Arkansas-based company said at its investor day on Wednesday. Analysts had estimated a gain of 4 percent on average, according to data compiled by Bloomberg. The retail chain also said its board has authorized $20 billion in stock buybacks and it’s actively reviewing its portfolio for ways to streamline the business.
Wal-Mart shares fell as much as 9.8 percent to $60.18 in New York, the biggest drop since February 2000. The stock was already down 22 percent this year before the decline.
Wal-Mart, the world’s largest retailer, is trying to win back customers by improving the shopping experience, expanding its online grocery pickup service, and opening more small-format stores, called Neighborhood Markets. It has also been spending $1 billion to improve its website and opening new distribution centers, aiming to speed the delivery of online orders. Investors, though, have been skeptical that the changes will reignite growth.
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