On The Fly: What to watch in Wal-Mart earnings report

Wal-Mart (WMT) is scheduled to report results of its fourth fiscal quarter before the market open on Tuesday, February 21, with a conference call scheduled for 7:00 am EDT. What to watch for: 1. GUIDANCE: Wal-Mart is expected to update its guidance for the fiscal year. Wal-Mart previously boosted its fiscal year 2017 adjusted earnings per share view to $4.20-$4.35 from $4.15-$5.35, and forecast Q4 EPS $1.18-$1.33, at the low end of analysts' estimates. Cleveland Research analyst Scott Bender recently said Wal-Mart's sales appeared to have slowed further in January to finish Q4, and also belives sales slowed in December compared to the start of the quarter. 2. TRUMP EFFECT: Wal-Mart, as part of the Americans for Affordable Products, has increased pressure on President Donald Trump not to push his proposed border tax on imports. The group says the proposed 20% tariff on imports would "increase the cost of clothing, food, medicine, gas and other essential items that Americans rely on." Wal-Mart sent executives to Capitol Hill in January to warn that the proposed tax plan would have a dramatic impact on its business and that of other retailers, potentially leading to higher prices for shoppers. Oppenheimer analyst Rupesh Parikh told investors that President-elect Donald Trump's tax plan could be "quite beneficial" to grocers. Conversely, he believes the House plan using static assumptions could be only modestly positive or even detrimental for grocery names, depending on the mix of imported goods. The analyst noted that he would expect grocers to raise prices on imported products and/or try to source from the U.S. if possible to preserve profitability. Wells Fargo analyst Zachary Fadem said that border taxation is a key near-term risk. 3. JOB CREATION PLANS: Wal-Mart announced in January that it would create about 10,000 jobs in the U.S. this year by opening or remodeling stores and investing in its e-commerce business. Wal-Mart previously announced thousands of job cuts at its headquarters and in-store management to focus more resources on its in-store floor workers and bolster e-commerce. In January, President Trump thanked Wal-Mart "for starting the big jobs push back into the U.S.!" 4. ONLINE INITIATIVES: Wal-Mart recently said it would combine its buying for store products with buying for its website, reported Reuters, citing sources. The publication argued that the news represents a "significant move to stamp out duplicate efforts as it consolidates buying operations to better fight Amazon (AMZN)." Taking aim at Amazon, Wal-Mart scrapped a subscription program that gave members free two-day delivery in order to make the service available to all of its customers. The retailer previously offered free two-day shipping to customers who paid a $49 fee to participate in Shipping Pass. In February, Wal-Mart announced the acquisition of Moosejaw, an online outdoor retailer, for approximately $51M. 5. LEADERSHIP SHUFFLE: Wal-Mart shuffled its leadership after buying Jet.com, giving several top executives responsibility for both online and in-store operations, The Wall Street Journal said last month. According to an internal memo, Tony Rogers, Wal-Mart's chief marketing officer, will also lead online and digital marketing efforts. Jeremy King, head of the WalmartLabs engineering team, is being promoted to U.S. chief technology officer. Meanwhile, Michael Bender, COO for e-commerce, will leave the company. Earlier in the quarter, Wal-Mart announced that John Furner would succeed Rosalind Brewer as Sam's Club CEO.