Shares of Walmart have plunged to an all time recent low on Wednesday, dipping to 9 percent – the worst it has been in 15 years.
Walmart lost over $20 billion in one day, with over 30 million shares being traded before noon.
Cnbc.com reports:
Wal-Mart now on pace for biggest one-day decline since April 2000. Cue up rollback prices comments. $WMT
— Bespoke (@bespokeinvest) October 14, 2015
Wal-Mart pinned the rise in expenses on recent wage hikes, which it said will increase costs by $1.2 billion this year. Wal-Mart expects earnings per share to decline between 6 and 12 percent next fiscal year, driven by pay increases and investment.
The retailer noted that it would funnel about $1.1 billion next year into e-commerce and digital platforms. The investment boost comes as Wal-Mart tries to combat sluggish sales.
“What’s clear is [Wal-Mart is] embracing digital investments to become more and more seamless in omni-channel; this is the right thing to do for the very long term, in our view, but again it contributes to lower operating profit dollar confidence for the next few years,” said Stifel Nicolaus in a research note.
Wal-Mart anticipates an earnings recovery by fiscal year 2019, when it projects profit will climb 5 to 10 percent from the year before. Net sales are expected to grow 3 to 4 percent annually over the next three years, the company said.
Wal-Mart’s market cap losses Wednesday topped the market value of retailer Macy’s and was roughly equal to the value of Kohl’s and Ralph Lauren combined.