Profit and online sales growth dive over holiday period at Wal-Mart
- Author: Zachary Reyes Feb 21, 2018,
Feb 21, 2018, 22:46
Walmart's adjusted earnings amounted to $1.33 a share in the fiscal fourth quarter, which ended January 31. Arguably those shoppers did not have to visit Walmart - but many did, and from our data, Walmart increased its share of shoppers over the final quarter.
Walmart recently asked vendors to supply more merchandise priced at $10 and higher in a push to turn an online profit.
Fourth quarter sales and comps outperformed expectations while profit lagged. That's more money than the GDP of Belgium (and a lot of other countries, too).
Shares of Walmart were down over 10% on Tuesday and helped to pull down numerous other retail stocks with it. Still, Walmart finished the year with more than 40 percent growth in online sales in the US, and it expects that online sales will be revived this year to hit that same pace. On a two-year stack, comp sales growth was 4.4%. While Walmart execs insist they're looking at 40% online growth this year, CEO Doug McMillon was on the back foot when talking with analysts yesterday.
The company is betting on online grocery delivery to help it reach 40% sales growth again in e-commerce for the 2019 fiscal year.
Soon, Walmart.com will also feature the "smart cart" technology made famous on Jet.com.
Ouch! Walmart just had its worst ever days on Wall Street after committing the new cardinal sin of coming in under part on its e-commerce revenue. The decision will temporarily slow sales growth at Jet.com.
The company's online sales grew by 23% during the holiday season quarter, but its biggest competitor, Amazon, outpaced it by increasing sales at the same time by 38%. The results underscore the company's challenges in a fiercely competitive retail landscape. McMillon expects e-commerce losses this year to be "about the same" as last year.
"We're making real progress putting our unique assets to work to serve customers in all the ways they want to shop", McMillon said. There will be some disappointment that growth slowed from the 50% increase posted last quarter - however, much of this is down to the fact the acquisition of Jet.com annualized over the period.
"They're doing well", Yarbrough said.
Shares fell $9.86 to $94.91.
Sam's Club comparable sales increased 2.4% during the quarter. "Our stores are executing better, we're innovating more, and customers are responding with higher sales and traffic", he said in an earnings call with investors yesterday.
Since buying Jet.com for more than $3 billion a year and a half ago, Walmart has added online services, acquired brands like Bonobos and ModCloth and vastly expanded the number of items available online. All told, nine of Walmart's 11 markets reported positive comp sales, including its four largest markets.
For the year, total revenue was $500.9 billion, an increase of $15.1 billion, or 3.1%, excluding currency. The biggest driver of the top line increase was Walmart U.S., which saw sales increase 3.4% to $86.6 billion. For now, the company is recording a provisional benefit of $207 million for the fourth quarter and full year.
In the U.S., the titanic struggle in ecommerce is between the twin titans of Walmart and Amazon.