Dividends and Walmart raises full-year sales, profit forecasts as holiday season starts strong

Every company tends to have a strong quarter than the other 3, ideally one would like to see consistent sales but reality is one quarter is traditionally stronger than the others. In the retail world the 4th quarter is the most important with the first quarter the least important or should have the lowest sales. For every company if the 1st quarter is very good then the year should be very good. If you own a retail company, your expectations start with what does the holiday season (the season from Black Friday sales to Christmas look like). If they are strong, then all is good with your stock.

In the case of Walmart, the biggest retailer in the US, in an article by Aishwarya Venugopal and Richa Naidu of Reuters. Walmart raised its annual sales and profit forecast because of strong demand for its goods.

Walmart as the biggest retailer and operates one of the best supply system for its stores, is not struggling with supply system. It had the ability to charter its own ships, ordering well in advance to go to warehouses in the US and rerouting ships to less crowded ports.

CEO Doug McMillon said we have the people, the products and the prices to deliver a great holiday season. (Walmart has hired more than 200,000 workers in the stores and supply chain system.) Mr. McMillan said with its constant desire to have lower prices, fighting inflation is in our DNA.

Walmart expects full year US same store sales to be 6% higher and adjusted profit to be around $6.40 as opposed to $6.25. Total revenue for Walmart should be in the $140.53 billion.

Linking to dividend paying stocks, as investors you are concerned about the dividend but understanding the normal revenue flows of the company can you. If the company you own has a flat quarter but it is expected that is ok, if it has a good quarter when it should have a good quarter that means you do not have to do anything but collect the dividend. If the quarter is off when it should be good, then it is time to seek alternatives. With dividend paying companies, as long as the company can make profits and pay dividends you do not have to do anything.

There are more questions than answers, till the next time – to raising questions.

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