The Walton heirs have lost a staggering $33.7 billion in the last two days as shares of their family’s retailing giant, WalmartWMT, continue to be pummeled.
The reason for the carnage? The company said on Tuesday that its profits had been slammed by higher costs on everything from products to shipping to labor. As a result, net income for the quarter through April fell 25% from a year ago, with earnings per share coming in below analyst estimates.
Investors reacted badly, causing the stock to slide 11.4% yesterday, the worst single-day decline for the company since 1987. The wipeout didn’t end there, with shares falling nearly 7% on Wednesday. While the market was down broadly on Wednesday, that was steeper than the 4% loss suffered by the S&P 500.
“Our first-quarter performance is a disappointment to us, and we're going to put it behind us and have a strong year,” said Walmart CEO Doug McMillon on the company’s earnings call.
The brunt of the decline was born by Jim, Rob and Alice Walton, children of founder Sam Walton, who saw $9 billion apiece wiped from their fortunes in the last two days. The fortune of their sister-in-law Christy Walton, wife of deceased brother John, contracted by more than $1 billion. Her son Lukas, who received a larger share of his father's estate, saw his net work knocked down by over $2 billion.
Ann Walton Kroenke and sister Nancy Walton Laurie, who inherited a stake in the company from their father Bud Walton (brother to Sam), also lost over $1 billion each.
The Waltons, who together own about half of Walmart’s stock, are still plenty rich, with a cumulative fortune of $212 billion as of late Wednesday, Forbes estimates. Jim remains the world’s 19th richest person in the world with a net worth of $59 billion, followed by sister Alice (No. 20 with $58.1 billion) and brother Rob (No. 21 with $57.9 billion).
The Walton trio have garnered more than $45 billion in total from stock sales and dividends over the years, per Bloomberg. Together with other relatives, they own more than 1.25 billion shares, or more than 45% of the company — a stake valued at over $220 billion.
A media representative for Walmart pointed to a 2015 statement from Walton Enterprises that said the Walton family expects to sell shares from time to time in order to help offset possible increases in its ownership percentage due to the company's stock buyback programs, and to help fund charitable contributions.
Jim Walton, Alice Walton, and Rob Walton are the top three individual shareholders of Walmart. Walmart's largest institutional investors include the John T. Walton Estate Trust, Vanguard Group, and BlackRock.
With a combined net worth of $226.3 billion, the three Waltons are collectively wealthier than Tesla CEO Elon Musk's $209.8 billion, according to Forbes as of Monday. When joined by the rest of the Walton clan, that wealth balloons to about $267 billion — far more than the next wealthiest family, the Mars candy heirs.
They're just like any other working Americans running a family business, except for the part where they earn US$100 million every single day. Sam Walton founded Walmart, a multinational retail corporation, in 1962 and his heirs have since helped transform it into a multi-billion revenue-churning machine.
The Walton family owns about 45% of Walmart's outstanding shares through the trust and their main investment vehicle, Walton Enterprises, data compiled by Bloomberg show. Alice, Jim and Rob Walton have a combined fortune of $274 billion, according to the Bloomberg Billionaires Index.
The bears believe Walmart's stock is historically expensive now -- it traded at less than 20 times earnings throughout most of the 2010s, and it's pricier than most of its industry peers.
The Walton Family is the richest family in the world. It owes its wealth to the Walmart company started by brothers Sam & Bud Walton in Northwest Arkansas more than six decades ago.
While Wal-Mart Stores as a corporate legal name is rarely used in public-facing materials or in stores themselves, CEO Doug McMillon said in a statement that he felt the name change was needed to be “consistent with the idea that you can shop us however you like as a customer.”
A 2015 statement from the Walton family said that its members will sell shares from “time to time” to curb increases in its ownership of the retail giant. The Waltons set up the trust that same year and told Walmart that it had no set timetable for sales of company stock.
Lowes Inc. is a publicly-traded company without a majority shareholder, and Walmart owns no shares in the company. Walmart does, however, own several other discount chains and brands across the US and beyond.
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