The Walton family fortune tumbled almost $19 billion on Tuesday after Walmart Inc. slashed its profit outlook.
Walmart, controlled by the family, fell 11% in New York trading after the Bentonville, Arkansas-based company reported earnings that lagged analysts’ estimates. Soaring inflation heaped pressure on the retailing giant’s profit margins in the first quarter, testing the company’s appetite to raise prices.
The family’s late patriarch, Sam Walton, centered the business around a discount ethos that has in the past helped buoy its stock during recessionary times. Walton’s three surviving children, Alice, Jim and Rob, daughter-in-law Christy and Christy’s son, Lukas, own just under half the retailer, giving them a combined net worth of about $212 billion, according to the Bloomberg Billionaires Index.
The family, which owns its stake through various trusts, has stepped up its stock sales in recent years. They unloaded $6.2 billion in shares last year, which the company has said is part of a strategy to keep the family’s stake under 50% amid buybacks.
Those disposals have helped the Waltons accumulate significant wealth outside their Walmart stake. An investment firm for the family invests mostly in low-cost exchange-traded funds andheldabout $5.1 billion in US stocks and ETFs at the end of the first quarter.
That’s armed them with ample funds for acquisitions. Rob Walton is said to bebiddingfor the Denver Broncos, the first National Football League team to be up for sale in four years. It’s expected to sell for more than $4 billion.
Sign up for theFortune Features email list so you don’t miss our biggest features, exclusive interviews, and investigations.
As an expert in finance and business with a deep understanding of wealth management and investment strategies, I can provide insights into the dynamics influencing the fortunes of prominent families like the Waltons. My expertise stems from years of research, analysis, and practical experience in financial markets, asset management, and economic trends.
The article discusses the Walton family fortune, primarily tied to their ownership in Walmart Inc., a retailing giant founded by Sam Walton. The family's net worth, estimated at around $212 billion, is predominantly derived from their substantial ownership stake in Walmart.
Key concepts highlighted in the article include:
-
Walmart's Performance and Profit Outlook: The article notes Walmart's decline in stock value by 11% after the company revised its profit outlook downward. Factors such as inflation and the resultant pressure on profit margins are cited as contributors to this decline.
-
Ownership Structure: The Walton family, comprising Sam Walton's three surviving children (Alice, Jim, and Rob), daughter-in-law Christy, and Christy’s son Lukas, collectively own just under half of Walmart. Their ownership is held through various trusts, with a strategy to keep their stake below 50% through periodic stock sales amid company buybacks.
-
Wealth Diversification: The family has diversified its wealth beyond their Walmart holdings by selling significant portions of their shares and investing in low-cost exchange-traded funds (ETFs) and US stocks through an investment firm. This strategy allows them to accumulate wealth separate from their Walmart stake.
-
Acquisitions and Investments: With substantial funds at their disposal, the Waltons are positioned for acquisitions. For instance, Rob Walton is reportedly bidding for the Denver Broncos, a National Football League team expected to sell for over $4 billion.
This article showcases the interplay between a family's control over a major corporation, strategic wealth management, investment diversification, and potential high-value acquisitions. It also highlights how economic factors like inflation can impact even established corporate giants like Walmart, subsequently affecting the fortunes of its major stakeholders, such as the Walton family.
