Wal-Mart's Lobbying Charges - Analyst Blog

Retail giant Wal-Mart Stores Inc. ( WMT ) reported that it spent $1.49 million during the third quarter of 2011 on issues related to food, nutrition and taxes. Besides, lobbying charges increased by $1.19 million from the third quarter of 2010, while it remained same in the prior quarter.

According to a filing with the House clerk's office on October 20, Wal-Mart lobbied the Congress, U.S. Department of Commerce, Environmental Protection Agency, U.S. Department of Agriculture, Department of Labor, and the Federal Trade Commission.

The company has lobbied on trade bills related to Panama/Colombia Free Trade Agreement, while providing more supply chain security. In addition, Wal-Mart remains concerned on the health-care reform issues, as the new regulations might hurt the company's profitability.

During July to September, Wal-Mart also scrutinized the consumer payment protection and product safety. The company also lobbied on tax reforms and food safety related to proper labeling of products.

Wal-Mart also delivered better-than-expected third-quarter 2012 results of 97 cents per share in mid-November, surpassing the prior-year earnings of 90 cents a share. However, the results were in-line with the Zacks Consensus Estimate and within the company's guidance range of 95 cents to $1.00 per share.

Based on the strong results of the third quarter and the economic environment in the United States and around the world, management provided an estimate that fourth -quarter 2012 earnings per share from continuing operations will be in the range of $1.42 to $1.48 compared with last year's reported EPS of $1.41 per share, including a tax benefit of approximately 7 cents per share.

For the fiscal year 2012, Wal-Mart expects its EPS guidance in the range of $4.45 to $4.51 compared with last year's full-year EPS of $4.18, which included approximately 11 cents per share for certain items.

In October, 2011, Wal-Mart announced its fiscal 2012 global capital expenditure program of $13 to $14 billion, including acquisition-related expenditures. Further, it expects fiscal 2013 capital expenditures to be flat with updated fiscal 2012 guidance.

In addition, new stores will add between 45 and 49 million square feet worldwide next fiscal year. Wal-Mart also plans to grow next year's sales by 5% to 7%. In addition, Wal-Mart will leverage operating expenses for fiscal 2012 while reducing the same as a percentage of sales by more than 100 basis points over the next five years.

Wal-Mart, which faces stiff competition from Target Corp. ( TGT ) and Costco Wholesale Corporation ( COST ), currently, has a Zacks #3 Rank, implying a short-term Hold recommendation. Over the long-term, we recommend a Neutral rating on the stock.

COSTCO WHOLE CP ( COST ): Free Stock Analysis Report

TARGET CORP ( TGT ): Free Stock Analysis Report

WAL-MART STORES ( WMT ): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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