Li & Fung Falls After Wal-Mart Predicts Earnings DropBy
Wal-Mart sees annual loss; analysts had predicted a gain
Wal-Mart CEO seeing `some pressure' on China consumer spending
The Hong Kong-based company plunged as much as 7 percent to HK$5.86, the biggest intraday loss since May 26. The city’s Hang Seng Index gained 0.9 percent. Wal-Mart shares tumbled 10 percent at the close in New York Wednesday, the biggest one-day drop since January 1988.
Earnings will decrease 6 percent to 12 percent in fiscal 2017, which ends in January of that year, the Bentonville, Arkansas-based company said at its investor day on Wednesday. Analysts had estimated a gain of 4 percent on average, according to data compiled by Bloomberg.
The dour outlook follows a protracted sales slump at Wal-Mart’s U.S. stores and mounting concern that the chain is losing ground to online competition such as Amazon.com Inc.
The world’s largest retailer is seeing “some pressure” on consumer spending in China, Chief Executive Officer Doug McMillon said in an interview with Bloomberg Television.
Global Brands, a spinoff of Li & Fung and which relies on the U.S. market for majority of sales, fell 1.2 percent at HK$1.62 in Hong Kong as of 10:07 a.m.
(An earlier story was corrected to say Wal-Mart predicted annual decline.)