Wal-Mart's stock jumps after buyback announcement, profit and sales growth outlook

Shares of Wal-Mart Stores Inc. WMT, +1.94% rallied 2.1% in premarket trade Tuesday, after the discount retail giant announced a new $20 billion stock repurchase program and provided profit and sales guidance for the next fiscal year. Wal-Mart said the new buyback program replaces the existing program, and is expected to be utilized over a two-year period. The company affirmed its adjusted earnings-per-share outlook for the current fiscal 2018 of $4.30 to $4.40, and said it expects fiscal 2019 EPS growth of about 5%. The FactSet 2019 EPS consensus of $4.63 implies growth of 5.9% above the fiscal 2018 EPS consensus of $4.37. The company expects 2019 sales growth of 3%, while the FactSet consensus of $507.8 billion is 2.5% above the 2018 consensus of $495.6 billion. E-commerce sales growth at Walmart U.S. is expected to be about 40% in 2019. Wal-Mart expects to add 1,000 online grocery locations in Walmart U.S. stores in 2019. The effective tax rate is expected to be 32.5% next year. "We have good momentum in the business, we're executing our strategy and moving with speed to win with the customer, who is more connected than ever and embracing tools that will save them both time and money," said Chief Executive Doug McMillon. The stock has rallied 10% over the past three months, while the SPDR S&P Retail ETF XRT, -1.90% has climbed 5.5% and the Dow Jones Industrial Average DJIA, -0.06% has advanced 6.3%.

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