Jim Cramer bashed Walmart Inc (NYSE:WMT) over poor execution on Tuesday after he was left stunned by the company's worse-than-expected earnings results.
What Happened: Walmart on Tuesday announced that its bottom-line results were unexpected, as inflation levels created more pressure on margins and operating costs. The company also cut its earnings guidance for the current quarter.
Cramer, who owns Walmart stock for his Charitable Trust, was deeply disappointed by management.
"The execution here is so poor that it's embarrassing," Cramer said Tuesday on CNBC. "This was a terrible quarter. Inventory is bad, sales are bad, execution terrible, really a sub-optimal situation."
He even went as far as saying Walmart needs to do some "soul-searching."
See Also: Walmart Struggles With Store Manager Crisis Despite Attractive Pay; Wants To Attract Job Seekers
Why It Matters: Cramer walked back those comments on Wednesday morning following Target Corp's (NYSE:TGT) poor quarterly results.
"I apologize to Walmart," he said. "I thought that Walmart was the only one that got it wrong."
Cramer acknowledged that there are bigger macro factors impacting these companies' results, but he still thinks they shouldn't have left shareholders in the dark. When the companies realized they were so far off from their expectations, they should have informed their shareholders, he said.
"It would have been a lot better to call analysts, issue a statement saying look we most likely will not make the expectations. That's the way it used to be done in the old days, and maybe I expected that," Cramer said.
If Walmart and Target would have come out with preannouncements, the retailers may have been able to break the news without tanking their stocks, he suggested.
"I think these are very honest companies, they certainly are not going to try to leak anything, that's just not their style. But at the same time, when you're off this much, I think it's incumbent upon you not to wait until your report date," Cramer said.
WMT, TGT Price Action: According to data from Benzinga Pro, Walmart was down 7.11% at $122.03 and Target was down 26.4% at $158.37 at press time.
Photo: Created with images from Mike Mozart and Scott Beale on Flickr
