Wal Mart Stores Inc. is scheduled to report its first quarter fiscal year 2015 earnings on Tuesday May 19. The Retail Giant to Roll out Alipay In China, takes on Amazon prime by free shipping.
Wal-Mart Stores Inc. the largest retailer o the world is all set to announce its first quarter earnings result on Tuesday May 19. The retail company is most likely to report decline in profit by 5.9% in the quarter ended on March 31; looking to roll out 2 new services in 2015, including mobile payment service in China, together with free shipment service in United States to compete with its arch rival Amazon prime service.
Wal-Mart has faced difficulties to gain grip in China, is joining hands with China’s Alipay, a 3rd party mobile payment service platform of Alibaba Group. This association will make mobile payment available in 25 Wal-Mart stores located in Shenzhen.
Alipay is more like Google Wallet and Apple Pay, which accounts for approximately 50% on online payments market in China, as per Chinese research firm, iResearch for the quarter covering from January to March 2015, the analysts expect the company to post $3.38 billion in net income equals to $1.05 a share on $116.3 billion of revenue. the company reported $3.59 billion in profits on $114.96 billion of revenue in the first quarter of fiscal year 2014.
In the United States, critics raised finger to company’s plunging store traffic as a biggest weakness, while analysts believe that the retailer has equalize it with increase in sales in its surging e-commerce business, which the company believes will go up by 21% by the end of this year. however, Wal-Mart has enhanced its e commerce business, that enhancement comes with price competition, lower margins and higher cost of shopping, making it more complex for the company to compete with its biggest competitor Amazon Inc.
Senior Vice President of Estimize -a research firm, Christine Short said, “Wal-Mart just hasn’t been able to execute as well as Amazon,” Amazon emphasize on placing warehouses and locating it in different regions in order to enjoy the cost saving from shipping, whereas, the retail giant is not able to achieve the same level.
The Street hold neutral view in Wal-Mart. almost 35 analysts covered the retailer stock, out of which 10 assigned Buy rating, while 21 gave Hold. The twelve month stock price target stood at $84.78.