Wal-Mart Stores, Inc. (WMT) is the world's largest retailer. They are engaged in the operation of mass merchandising stores, which serve their customers primarily through the operation of three segments, which are the Wal-Mart Stores segment, the SAM'S Club segment and the International segment.
The company made news last week by announcing plans to raise wages for full-time workers to a minimum of $10/hour by February, 2016. According to the company, with the increases to starting pay and across-the-board raises, average hourly wages for full-time employees will increase to @$13/hour.
CEO Doug McMillon noted that the company's reputation for poor labor practices had hurt WalMart and claimed that "we’re strengthening investments in our people to engage and inspire them to deliver superior customer experiences.”
The company has been under pressure from politicians, customers, media, and workers due to its low wages, the use of public assistance by employees, scheduling practices, etc. The changes to the company pay scale are expected to cost the company @$1 billion/year.
It will take a while to figure out the effect of the increased wages on the bottom line, but analysts note that the company already had to increase wages in many stores because they were paying below the minimum wage of $7.25/hour as set by the federal government.
VALUENGINE RECOMMENDATION: ValuEngine continues its HOLD recommendation on WAL-MART STORES for 2015-02-23. Based on the information we have gathered and our resulting research, we feel that WAL-MART STORES has the probability to ROUGHLY MATCH average market performance for the next year. The company exhibits ATTRACTIVE Company Size but UNATTRACTIVE Earnings Growth Rate.
Below is recent data on WMT:
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