November 15, 2022
By Clark Schultz
...Heading into the earnings report, (click here) Walmart (WMT) is being widely viewed by analysts and investors as a trade-down beneficiary that should outperform on a relative basis in a recessionary environment. However, the trick is that shares of WMT have already outperformed in 2022 on a relative basis and valuation is somewhat stretched after investors took refuge in the defensive name.
For Q3, analyst expect Walmart (WMT) to report revenue of $146.8B and EPS of $1.32. The Bentonville-based company is also expected to post comparable sales growth of 4.8% for the quarter. Guidance from the retail giant on the status of its inventory level and transportation costs headwinds are seen as crucial in setting the post-earnings tone.
On Wall Street, Deutsche Bank recently named Walmart a top pick just ahead of the report....
I have no interest in what the note of the killer said. I can guess.
There is far too much pressure/stress on employees working for Wall Street corporations. Unions make a difference in these high stress environments because grievances are taken seriously. The union representative takes the grievance seriously, hence, the company does.
Americans expect justice. They go to work and do their level best and if that isn't good enough and requires superhuman effort a grievance can be filed for issues of fairness and expectations. Unions are more or less part of the justice department on a private scale. Unions maintain a safe and sane work environment. It is what unions do. They are in touch with employees of a corporation and when things are going off the rails it can be corrected before extremes are the outcomes.
These days, if Americans are dying of viruses, they have guns that can kill them or dying because they can't get an abortion. That is a high stress environment in and out of work. They feel they are under attack more frequently than not.
Since the pandemic the USA work force has been in flux. I do not see it as a bad thing. Not at all. I think Americans needed a break to restructure their lives to be more productive with a higher quality of life as a return for their efforts.
Wall Street corporations have a lot of fluidity as a rule. That means when the work force is tight they can survive by paying the highest prices to the available talent. Small businesses don't necessarily have that option and the workers are going to the highest bidder.
HOWEVER.
There is a price to be paid by the workforce when they are receiving far higher pay rates than they ever had before. The price they pay is higher demands on the product at the end of the corporate equation. I am not familiar with all the pressures Walmart employees have to endure. I do know in the past Walmart employees had to endure the embarrassment as "The Working Poor" with corporate offices giving advice to where and how to apply for Medicaid and Food Stamps. Basically, Walmart has been supplementing their stockholders with government monies and programs, not really profits.
All those stock returns are not necessarily well earned, so much as found money in sending employees to welfare programs on poor wages.
Now, the wages are better so they don't really qualify for those government subsidized benefits anymore.
To say corporations are driven to closing the gap between higher wages and prices for profit is an understatement. An example is McDonalds. The average customer doesn't know that while they are ordering their latest "App Offer" their car is being tracked by magnets of some kind under the paved drive through, sorry "Drive thru". Yes, indeed, consumers of McDonalds can enjoy being bombarded by McDonald's radar. Now, one might ask, "That can't be, there is no purpose to it."
But, Ahhhhhhh, there is.
Inside the McDonalds hard at work are very busy people that have no chairs to sit in even if they wanted to slow down. Each car enters the drive through, sorry "Drive Thru" and is tracked from the beginning of the entrance to the point where they leave with their purchase. The tracking appears on a computer screen at one or all cash registers to know how long each car is on the drive through, sorry "Drive Thru" property. Why is that important? Profits. See, there is a time threshold set for each and every car that enters the drive through, sorry "Drive Thru". The personnel preparing the food are to achieve compliance with the maximum time allowed for a car traversing the drive through, sorry "Drive Thru."
Got it?
No?
So, the personnel inside preparing the INDIVIDUAL order have to take the order, the money and deliver the food in the time allotted according to the car tracking device to ensure profits to the corporation. Got it now? See, employees can demand all sorts of pay rates, but, the profitability of the company must be maintained, so the product at the end of the pay rate has to exceed the costs to provide profits to the stockholders. In the case of Walmart, to deliver profits to the Walton Family.
To say I have a "thing" about corporations is an understatement. They are profit driven and as a result depersonalize the people that work for them. Believe me when I say corporations rather rely on drones and robots than people. That by the way is the actual goal for trucking companies and McDonalds. Trucking firms can use driverless trucks across the interstates and McDonalds can enact kiosks for self-serve while it dispenses exactly what the person ordered.
As a rule, people cause problems for Wall Street corporations as well as family owned businesses like Walmart in profitability.
So.
That said, people will never be machines nor should they be nor should they be asked to produce as a machine. People are highly valuable to the USA economy and when they are replaced by robots and drones, the USA economy will faulter.
So, the corporations that feel uncomfortable about a good paying wage and seek profits through unrealistic outcomes by human beings, then I strongly suggest their CEOs don't belong in the board room and the unions need to be in negotiations with them.
I know the gun people will side with Walmart and state the gunman had mental health problems. If that is true, then my only statement is, "Why?"
My sincerest sympathies to the friends and families of:
People from Chesapeake.
Fernando Chavez-Barron, 16
Brian Pendleton, 38
Kellie Pyle, 52
Lorenzo Gamble, 43
Randy Blevins, 70
Person from Portsmouth.
Tyneka Johnson, 22
