Walmart is sweetening the pot for shareholders before its annual meeting, using the oldest trick in the book.
The retailer on Tuesday morning announced that it had authorized up to $20 billion in stock buybacks over the next two years. That’s a massive amount of capital to be allocated for repurchases, which are frequently used by companies to boost shares during times devoid of other positive catalysts.
Not that Walmart will need to fall back on that tactic quite yet. In Tuesday’s release, the company also reaffirmed its earnings guidance for 2018, an encouraging sign given mounting pressures in an industry operating increasingly at the whim of Amazon.
Retailers have announced more than 6,400 store closings this year, yet Walmart has emerged relatively unscathed. The same can be said about the company’s stock, which is up almost 17% in 2017, beating the benchmark S&P 500.
Walmart also provided an early look at the 2019 fiscal year, forecasting sales growth of roughly 3% and saying it also expected to add 1,000 online grocery locations during that period. The move is not-so-discreetly aimed at Amazon, which barged its way into the grocery industry earlier this year with its $13.7 acquisition of Whole Foods.
In another anti-Amazon initiative, the company also announced on Monday a new process for in-store returns designed to make it easier to return merchandise purchased online. As Business Insider’s Dennis Green points out, Walmart is finding new ways to leverage its substantial existing brick-and-mortar footprint to better compete with the online juggernaut.
The company has long been viewed as the old-school retailer best positioned to fend off the looming retail apocalypse, and its actions this week have done nothing to dispel that notion.
And investors seem to like what they’re seeing out of Walmart. Its stock rose as much as 4.4% on Tuesday, after climbing nearly 2% on Monday’s announcement.
- Markets Insider